EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made and entered into as of this 1st day
of November, 2006, by and among Allied World Assurance Company Holdings, Ltd, a
Bermuda corporation ("Holdings"), Allied World Assurance Company, Ltd, a Bermuda
corporation ("AWAC" and together with Holdings, the "Company"), and [_____]
("Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee and to enter into an
agreement embodying the terms of such employment (this "Agreement") and Employee
desires to enter into this Agreement and to accept such employment, subject to
the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are mutually acknowledged, the Company and Employee hereby
agree as follows:
Section 1. DEFINITIONS.
(a) "Accrued Obligations" shall mean (i) all accrued but unpaid Base
Salary through the date of termination of Employee's employment; (ii) any unpaid
or unreimbursed expenses incurred in accordance with Company policy, including
amounts due under Section 7 hereof, to the extent incurred prior to termination
of employment; (iii) any benefits provided under the Company's employee benefit
plans upon a termination of employment, in accordance with the terms therein,
including rights to equity in the Company pursuant to any plan or grant and the
right to receive tax reimbursement payments accrued but unpaid for periods prior
to the date of termination; and (iv) rights to indemnification by virtue of
Employee's position as an officer or director of the Company or its subsidiaries
and the benefits under any directors' and officers' liability insurance policy
maintained by the Company, in accordance with its terms thereof.
(b) "Agreement" shall have the meaning set forth in the recitals
hereto.
(c) "Annual Bonus" shall have the meaning set forth in Section 4(c)
below.
(d) "AWAC" shall have the meaning set forth in the preamble hereto.
(e) "Base Salary" shall mean the salary provided for in Section 4(a)
or any increased salary granted to Employee pursuant to Section 4(a) below.
(f) "Board" shall mean the Board of Directors of Holdings.
(g) "Cause" shall mean (i) Employee's willful failure (except where
due to physical or mental incapacity), willful neglect or willful refusal to
substantially perform his duties; (ii) any willful or intentional act of
Employee with regard to the Company or its subsidiaries that has the effect of
injuring the reputation or business of the Company or its
subsidiaries in a material manner; (iii) Employee's conviction of, or plea of
guilty or nolo contendere to, the commission of a criminal act that would
constitute a felony in the United States; (iv) the commission by Employee of an
act of fraud, embezzlement or material dishonesty against the Company or its
subsidiaries (other than a good faith expense account dispute); or (v)
Employee's breach of any material provision of this Agreement.
(h) "Change in Control" shall mean and be deemed to occur if (i) any
"person" (as such term is defined in Section 3(a)(9) and as used in Sections
13(d) and 14(d) of the Exchange Act), excluding the Company or any or its
subsidiaries, a trustee or any fiduciary holding securities under an employee
benefit plan of the Company or any of its subsidiaries, an initial public
offering of Holdings' securities pursuant to an effective registration statement
filed with the Securities and Exchange Commission, an underwriter temporarily
holding securities pursuant to an offering of such securities or a corporation
owned, directly or indirectly, by shareholders of Holdings in substantially the
same proportion as their ownership of Holdings, is or becomes the "beneficial
owner" as defined in Rule 13d-3 under the Exchange Act, directly or indirectly,
of securities of Holdings representing 50% or more of the combined voting power
of Holdings' then outstanding securities ("Voting Securities"); (ii) during any
period of not more than two years, individuals who constitute the Board as of
the beginning of the period and any new director (other than a director
designated by a person who has entered into an agreement with Holding to effect
a transaction described in clause (i) or (iii) of this sentence) whose election
by the Board or nomination for election by Holdings' shareholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at such time or whose election or nomination for election
was previously so approved, cease for any reason to constitute a majority
thereof; (iii) the shareholders of Holdings approve a merger, consolidation,
amalgamation or reorganization or a court of competent jurisdiction approves a
scheme of arrangement of Holdings, other than a merger, consolidation,
amalgamation, reorganization or scheme of arrangement which would result in the
Voting Securities of Holdings outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 50% of the combined voting power of
the Voting Securities of Holdings or such surviving entity outstanding
immediately after such merger, consolidation, amalgamation, reorganization or
scheme of arrangement; or (iv) the shareholders of Holdings approve a plan of
complete liquidation of Holdings or any agreement for the sale or disposition by
Holdings of all or substantially all of its assets.
(i) "Commencement Date" shall mean November 1, 2006.
(j) "Company" except as otherwise expressly set forth herein, shall
have the meaning set forth in the preamble hereto.
(k) "Competitive Activities" shall mean any business activities in
which the Company or any of its subsidiaries are engaged, or have committed
plans to engage, during the Term of Employment.
(l) "Confidential Information" shall have the meaning set forth in
Section 9(a) below.
-2-
(m) "Developments" shall have the meaning set forth in Section 9(e)
below.
(n) "Disability" shall mean any physical or mental disability or
infirmity that has prevented the performance of Employee's duties in all
material respects for a period of one hundred eighty (180) consecutive calendar
days.
(o) "Employee" shall have the meaning set forth in the preamble
hereto.
(p) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(q) "Good Reason" shall mean, without Employee's written consent, (i)
an adverse change in Employee's employment title; (ii) a material diminution in
Employee's employment duties, responsibilities or authority, or the assignment
to Employee of duties that are materially inconsistent with his position; (iii)
any reduction in Base Salary or target Annual Bonus opportunity; (iv) a
relocation of Employee's principal place of employment to a location other than
Xxxxxxxx, Bermuda; or (v) any breach by the Company of any material provision of
this Agreement.
(r) "Holdings" shall have the meaning set forth in the preamble
hereto.
(s) "Interfering Activities" shall mean (i) encouraging, soliciting or
inducing, or in any manner attempting to encourage, solicit or induce, any
Person employed by, as agent of, or a service provider to, the Company or any
subsidiary thereof to terminate (or, in the case of an agent or service
provider, reduce) such Person's employment, agency or service, as the case may
be, with the Company or such subsidiary; provided, that the foregoing shall not
be violated by general advertising not targeted at employees of the Company nor
by serving as a reference upon an employee's request with regard to an entity
with which Employee is not affiliated; or (ii) encouraging, soliciting or
inducing, or in any manner attempting to encourage, solicit or induce any
customer, supplier (including insurance brokers), licensee or other business
relation of the Company or any subsidiary thereof to cease doing business with
or reduce the amount of business conducted with the Company or such subsidiary,
or in any way interfere with the relationship between any such customer,
supplier (including insurance brokers), licensee or business relation and the
Company or such subsidiary.
(t) "Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust (charitable or non-charitable), unincorporated organization or other form
of business entity.
(u) "Non-Interference Period" shall mean the period commencing on the
Commencement Date and ending on the twenty-four (24) month anniversary of the
date of such termination.
(v) "Non-Compete Period" shall mean the period commencing on the
Commencement Date and:
(i) in the case of Employee's termination of employment hereunder
by the Company for Cause, ending on the date of such termination;
-3-
(ii) in the case of Employee's termination of employment
hereunder by the Company without Cause or by Employee for Good Reason,
ending on the twenty-four (24) month anniversary of the date of such
termination; or
(iii) in the case of Employee's termination of employment
hereunder by the Employee without Good Reason or as a result of his
Disability, ending on the date of such termination; provided, however, that
the Company may elect to extend the Non-Compete Period up to an additional
twelve (12) months following the date of such termination by providing
Employee written notice of such election within five (5) business days
following such termination specifying the applicable period of extension,
in which case, the Company shall be required to continue, through the end
of the Non-Compete Period, as so extended, (A) to pay Employee his Base
Salary, in accordance with the Company's regular payroll practices, and (B)
to provide participation under the Company's health and other insurance
plans, or if such continued participation in is not permissible, provide
Employee with coverage that is economically equivalent to Employee through
alternative arrangements, or the cash value of such coverage, in a manner
that places the Employee in a net economic position that is at least
equivalent to the position in which the Employee would have been had such
alternative arrangements not been used by the Company.
(w) "Severance Multiplier" shall mean an amount equal to two (2);
provided, however, if Employee's termination occurs within the twelve (12) month
period following a Change in Control, the Severance Multiplier shall equal three
(3).
(x) "Severance Term" shall mean the period specified in Section
8(d)(iii) below.
(y) "Term of Employment" shall mean the period specified in Section 2
below.
Section 2. ACCEPTANCE AND TERM OF EMPLOYMENT.
The Company agrees to employ Employee and Employee agrees to serve the
Company on the terms and conditions set forth herein. The Term of Employment
shall commence on the Commencement Date and shall continue until Employee is
terminated as provided in Section 8 hereof.
Section 3. POSITION, DUTIES AND RESPONSIBILITIES; PLACE OF
PERFORMANCE.
(a) During the Term of Employment, Employee shall be employed and
serve as [__________] of both Holdings and AWAC (together with such other
position or positions consistent with Employee's title as the Board shall
specify from time to time) and shall have such duties typically associated with
such title. Subject to the foregoing, Employee also agrees to serve as an
officer and/or director of the Company or any parent or subsidiary of the
Company, in each case without additional compensation.
(b) Subject to the terms and conditions set forth in this Agreement,
Employee shall devote his full business time, attention and efforts to the
performance of his duties under
-4-
this Agreement and shall not engage in any other business or occupation during
the Term of Employment, including, without limitation, any activity that (x)
conflicts with the interests of the Company or its subsidiaries, (y) interferes
with the proper and efficient performance of his duties for the Company, or (z)
interferes with the exercise of his judgment in the Company's best interests.
Notwithstanding the foregoing, nothing herein shall preclude Employee from (i)
serving, with the prior written consent of the Board, as a member of the board
of directors or advisory boards (or their equivalents in the case of a
non-corporate entity) of non-competing businesses and charitable organizations,
(ii) engaging in charitable activities and community affairs, and (iii) subject
to the terms and conditions set forth in Section 9 hereof, managing his personal
investments and affairs; provided, however, that the activities set out in
clauses (i), (ii) and (iii) shall be limited by Employee so as not to materially
interfere, individually or in the aggregate, with the performance of his duties
and responsibilities hereunder.
(c) Employee's principal place of employment shall be at the Company's
corporate headquarters in Xxxxxxxx, Bermuda, although Employee understands and
agrees that he may be required to travel from time to time for business reasons.
Section 4. COMPENSATION.
During the Term of Employment, Employee shall be entitled to the
following compensation:
(a) Base Salary. Employee shall be paid an annualized Base Salary,
payable in accordance with the regular payroll practices of the Company, of not
less than $[_____], subject to increase, if any, as may be approved in writing
by the Board, but not to decrease from the then current Base Salary.
(b) Cost of Living Allowance. In addition to the Base Salary, Employee
shall also receive a monthly cost of living allowance based upon the amount of
Base Salary that would have been spent on a "basket" of goods and services had
Employee not relocated to Bermuda, and will be determined based upon Base
Salary, the size of Employee's family living in Bermuda and foreign exchange
rate fluctuations between the U.S. dollar and Bermuda dollar. The actual amount
of the cost of living allowance shall be determined by the Company in a manner
consistent with determination of cost of living allowances for other senior
executives of the Company.
(c) Annual Bonus. Employee shall be eligible for an annual incentive
bonus award determined by the Board in respect of each fiscal year during the
Term of Employment (the "Annual Bonus"). The Annual Bonus shall be earned and
payable in accordance with the terms of Holdings' annual bonus plan as in effect
from time to time.
(d) Change in Control Acceleration. Notwithstanding any contrary terms
of any Company equity plan or other agreement pursuant to which equity-based
awards have been granted to Employee, upon the occurrence of a Change in
Control, all such equity-based awards shall fully vest immediately prior to such
Change in Control.
-5-
Section 5. EMPLOYEE BENEFITS.
(a) General. During the Term of Employment, Employee shall be entitled
to participate in health, insurance, retirement and other perquisites and
benefits generally provided to other senior executives of the Company that are
made available from time to time, including, without limitation, participation
in the Company's home leave policy, relocation policy, tax return preparation
policy and repatriation policy, each as in effect from time to time. Employee
shall also be entitled to the same number of holidays, vacation and sick days as
are generally allowed to senior executives of the Company in accordance with the
Company policy in effect from time to time.
(b) Additional Benefits. During the Term of Employment, in addition to
any perquisites and benefits provided generally to Employee pursuant to
subsection (a) above, Employee shall be entitled to the following benefits:
(i) Reimbursement or payment of the cost of financial and tax
planning, such reimbursement not to exceed $10,000 per year;
(ii) A housing allowance for a residence in Bermuda equal to
$[__________] per month, subject to periodic review for increase; and
(iii) Reimbursement of an annual subscription to a club in
Bermuda not to exceed $6,000 in membership fees per year.
Section 6. "KEY-MAN" INSURANCE.
At any time during the Term of Employment, the Company shall have the
right to insure the life of Employee for the sole benefit of the Company, in
such amounts, and with such terms, as it may determine. All premiums payable
thereon shall be the obligation of the Company. Employee shall have no interest
in any such policy, but agrees to reasonably cooperate with the Company in
taking out such insurance by submitting to physical examinations, supplying all
information reasonably required by the insurance company, and executing all
necessary documents, provided that no financial obligation or liability is
imposed on Employee by any such documents.
Section 7. REIMBURSEMENT OF BUSINESS EXPENSES.
Employee is authorized to incur reasonable business expenses in
carrying out his duties and responsibilities under this Agreement and the
Company shall promptly reimburse him for all such reasonable business expenses
incurred in connection with carrying out the business of the Company, subject to
documentation in accordance with the Company's policy, as in effect from time to
time.
-6-
Section 8. TERMINATION OF EMPLOYMENT.
(a) General. The Term of Employment shall terminate upon the earliest
to occur of (i) Employee's death, (ii) a termination by reason of a Disability,
(iii) a termination by the Company with or without Cause, and (iv) a termination
by Employee with or without Good Reason. Upon any termination of Employee's
employment for any reason, except as may otherwise be requested by the Company
in writing and agreed upon in writing by Employee, Employee shall resign from
any and all directorships, committee memberships or any other positions Employee
holds with the Company or any of its subsidiaries.
(b) Termination due to Death or Disability. Employee's employment
shall terminate automatically upon his death. The Company may terminate
Employee's employment immediately upon the occurrence of a Disability, such
termination to be effective upon Employee's receipt of written notice of such
termination. In the event Employee's employment is terminated due to his death
or Disability, Employee or his estate or his beneficiaries, as the case may be,
shall be entitled to:
(i) The Accrued Obligations;
(ii) Any unpaid Annual Bonus in respect to any completed fiscal
year which has ended prior to the date of such termination, such amount to
be paid at the same time it would otherwise be paid to Employee had no such
termination occurred;
(iii) A pro rata Annual Bonus (determined using the target Annual
Bonus if such termination occurs during the fiscal year in which the
Commencement Date falls, and using the highest Annual Bonus paid or payable
for the two immediately prior fiscal years for terminations after the
fiscal year in which the Commencement Date falls) based on the number of
days elapsed from the commencement of such fiscal year through and
including the date of such termination, such amount to be paid within five
(5) business days of such termination; and
(iv) Vesting, as of the date of such termination, in the number
of equity-based awards, if any, which would otherwise have vested during
the one (1) year period immediately following such termination (without
regard to any subsequent vesting events).
Except as set forth in this Section 8(b), following Employee's termination by
reason of his death or Disability, Employee shall have no further rights to any
compensation or any other benefits under this Agreement.
(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take effect unless the
provisions of this subsection (i) are complied with. Employee shall be
given not less than fifteen (15) days prior written notice by the Board of
the intention to terminate his employment for Cause, such notice to state
in detail the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause is
based. Employee shall have fifteen (15) days after the date that such
written notice has been
-7-
given to Employee in which to cure such act or acts or failure or failures
to act, to the extent such cure is possible. If he fails to cure such act
or acts or failure or failures to act, the termination shall be effective
on the date immediately following the expiration of the fifteen (15) day
notice period. If cure is not possible, the termination shall be effective
on the date of receipt of such notice by Employee. During any cure period
provided hereunder, the Board may, in its sole and absolute discretion,
prohibit Employee from entering the premises of the Company (or any
subsidiary thereof) or otherwise performing his duties hereunder, and any
such prohibition shall in no event constitute an event pursuant to which
Employee may terminate employment with Good Reason; provided, however, that
if cure is possible, and Employee can reasonably demonstrate to the Board
that he desires to enter the premises of the Company (or a subsidiary
thereof) or to otherwise perform his duties hereunder solely to attempt to
cure the act or acts or failure or failures to act that constitute the
grounds on which the proposed termination for Cause is based, Employee
shall be permitted to enter the premises of the Company (or a subsidiary
thereof) or otherwise to perform his duties hereunder solely for the
purposes of curing such act or acts or failure or failures to act.
(ii) In the event the Company terminates Employee's employment
for Cause, he shall be entitled only to the Accrued Obligations. Following
such termination of Employee's employment for Cause, except as set forth in
this Section 8(c)(ii), Employee shall have no further rights to any
compensation or any other benefits under this Agreement.
(d) Termination by the Company without Cause. The Company may
terminate Employee's employment at any time without Cause, effective upon
Employee's receipt of written notice of such termination. In the event
Employee's employment is terminated by the Company without Cause (other than due
to death or Disability), Employee shall be entitled to:
(i) The Accrued Obligations;
(ii) Any unpaid Annual Bonus in respect to any completed fiscal
year which has ended prior to the date of such termination, such amount to
be paid at the same time it would otherwise be paid to Employee had no such
termination occurred;
(iii) An amount equal to the Severance Multiplier multiplied by
the sum of his then current Base Salary and Annual Bonus (determined using
the target Annual Bonus if such termination occurs during the fiscal year
in which the Commencement Date falls, and using the highest Annual Bonus
paid or payable for the two immediately prior fiscal years for terminations
after the fiscal year in which the Commencement Date falls), payable in
substantially equal monthly installments over the period commencing on the
date of termination and ending on the date that is one day prior to two and
one-half months following the end of the Company's fiscal year in which
such termination occurs (the "Severance Term");
(iv) Continuation of participation under the Company's health and
other insurance plans for a period of years equal to the Severance
Multiplier, or if such continued participation in is not permissible,
provide Employee with coverage that is
-8-
economically equivalent to Employee through alternative arrangements, or
the cash value of such coverage, in a manner that places the Employee in a
net economic position that is at least equivalent to the position in which
the Employee would have been had such alternative arrangements not been
used by the Company; and
(v) Vesting, as of the date of such termination, in the number of
equity-based awards, if any, which would otherwise have vested during the
two (2) year period immediately following such termination (without regard
to any subsequent vesting events).
Notwithstanding the foregoing, the payments and benefits described in
subsections (ii) through (iv) above shall immediately cease, and the Company
shall have no further obligations to Employee with respect thereto, in the event
that Employee breaches any provision of Section 9 hereof.
Following such termination of Employee's employment by the Company
without Cause, except as set forth in this Section 8(d), Employee shall have no
further rights to any compensation or any other benefits under this Agreement.
(e) Termination by Employee with Good Reason. Employee may terminate
his employment with Good Reason by providing the Company fifteen (15) days prior
written notice setting forth in reasonable specificity the event that
constitutes Good Reason, which written notice, to be effective, must be provided
to the Company within ninety (90) days of the occurrence of such event. During
such fifteen (15) day notice period, the Company shall have a cure right (if
curable), and if not cured within such period, Employee's termination will be
effective upon the date immediately following the expiration of the fifteen (15)
day notice period, and Employee shall be entitled to the same payments and
benefits as provided in Section 8(d) above for a termination without Cause, it
being agreed that Employee's right to any such payments and benefits shall be
subject to the same terms and conditions as described in Section 8(d) above.
Following such termination of Employee's employment by Employee with Good
Reason, except as set forth in this Section 8(e), Employee shall have no further
rights to any compensation or any other benefits under this Agreement.
(f) Termination by Employee without Good Reason. Employee may
terminate his employment without Good Reason by providing the Company thirty
(30) days prior written notice of such termination. In the event of a
termination of employment by Employee under this Section 8(f), Employee shall be
entitled only to the Accrued Obligations. In the event of termination of
Employee's employment under this Section 8(f), the Company may, in its sole and
absolute discretion, by written notice accelerate such date of termination and
still have it treated as a termination without Good Reason. Following such
termination of Employee's employment by Employee without Good Reason, except as
set forth in this Section 8(f), and, if applicable, such additional compensation
and benefits described in Section 1(v)(iii), Employee shall have no further
rights to any compensation or any other benefits under this Agreement.
(g) Release. Notwithstanding any provision herein to the contrary, the
Company may require that, prior to payment of any amount or provision of any
benefit pursuant
-9-
to subsections (d) or (e) of this Section 8, Employee shall have executed a
general release in favor of the Company and its subsidiaries and related parties
in the form as is reasonably required by the Company, and any waiting periods
contained in such release shall have expired.
Section 9. RESTRICTIVE COVENANTS.
Employee acknowledges and agrees that (A) the agreements and covenants
contained in this Section 9 are (i) reasonable and valid in geographical and
temporal scope and in all other respects, and (ii) essential to protect the
value of the Company's business and assets; and (B) by his employment with the
Company, Employee will obtain knowledge, contacts, know-how, training and
experience and there is a substantial probability that such knowledge, contacts,
know-how, training and experience could be used to the substantial advantage of
a competitor of the Company and to the Company's substantial detriment. For
purposes of this Section 9, references to the Company shall be deemed to include
its subsidiaries.
(a) Confidential Information. At any time during and after the end of
the Term of Employment, without the prior written consent of the Board, except
to the extent required by an order of a court having jurisdiction or under
subpoena from an appropriate government agency, in which event, Employee shall,
to the extent legally permitted, consult with the Board prior to responding to
any such order or subpoena, and except as he in good faith believes necessary or
desirable in the performance of his duties hereunder, Employee shall not
disclose to or use for the benefit of any third party any confidential or
proprietary trade secrets, customer lists, drawings, designs, information
regarding product development (including types of insurance products), marketing
plans, sales plans, management organization information, operating policies
(including underwriting policies and risk assessment policies) or manuals,
business plans, financial records, packaging design or other financial,
commercial, business or technical information (i) relating to the Company, or
(ii) that the Company may receive belonging to suppliers, customers or others
who do business with the Company (including insurance brokers) as a result of
his position with the Company (collectively, "Confidential Information").
Employee's obligation under this Section 9(a) shall not apply to any information
that is publicly available or hereafter becomes publicly available, in each case
without the breach by Employee of this Section 9(a).
(b) Non-Competition. Employee covenants and agrees that during the
Non-Compete Period, with respect to Bermuda (including any province thereof),
any State of the United States of America or any other jurisdiction in which the
Company engages (or has committed plans to engage) in business during the Term
of Employment, or, following termination of Employee's employment, was engaged
in business (or had committed plans to engage) at the time of such termination
of employment, Employee shall not, directly or indirectly, individually or
jointly, own any interest in, operate, join, control or participate as a
partner, director, principal, officer, or agent of, enter into the employment
of, act as a consultant to, or perform any services for any Person (other than
the Company), that engages in any Competitive Activities. Notwithstanding
anything herein to the contrary, this Section 9(b) shall not prevent Employee
from acquiring as an investment securities representing not more than three
percent (3%) of the outstanding voting securities of any publicly-held
corporation or from being a passive investor in any mutual fund, hedge fund,
private equity fund or similar pooled
-10-
account so long as Employee's interest therein is less than three percent (3%)
and he has no role in selecting or managing investments thereof.
(c) Non-Interference. During the Non-Interference Period, Employee
shall not, directly or indirectly, for his own account or for the account of any
other Person, engage in Interfering Activities.
(d) Return of Documents. In the event of the termination of Employee's
employment for any reason, Employee shall deliver to the Company all of (i) the
property of the Company, and (ii) the documents and data of any nature and in
whatever medium of the Company, and he shall not take with him any such
property, documents or data or any reproduction thereof, or any documents
containing or pertaining to any Confidential Information.
(e) Works for Hire. Employee agrees that the Company shall own all
right, title and interest throughout the world in and to any and all inventions,
original works of authorship, developments, concepts, know-how, improvements or
trade secrets, whether or not patentable or registerable under copyright or
similar laws, which Employee may solely or jointly conceive or develop or reduce
to practice, or cause to be conceived or developed or reduced to practice during
the Term of Employment, whether or not during regular working hours, provided
they either (i) relate at the time of conception or development to the actual or
demonstrably proposed business or research and development activities of the
Company; (ii) result from or relate to any work performed for the Company; or
(iii) are developed through the use of Confidential Information and/or Company
resources or in consultation with Company personnel (collectively referred to as
"Developments"). Employee hereby assigns all right, title and interest in and to
any and all of these Developments to the Company. Employee agrees to assist the
Company, at the Company's expense (but for no other consideration of any kind),
to further evidence, record and perfect such assignments, and to perfect,
obtain, maintain, enforce and defend any rights specified to be so owned or
assigned. Employee hereby irrevocably designates and appoints the Company and
its agents as attorneys-in-fact to act for and on Employee's behalf to execute
and file any document and to do all other lawfully permitted acts to further the
purposes of the foregoing with the same legal force and effect as if executed by
Employee. In addition, and not in contravention of any of the foregoing,
Employee acknowledges that all original works of authorship which are made by
him (solely or jointly with others) within the scope of employment and which are
protectable by copyright are "works made for hire," as that term is defined in
the United States Copyright Act (17 USC Sec. 101) or any similar Bermuda law or
regulation. To the extent allowed by law, this includes all rights of paternity,
integrity, disclosure and withdrawal and any other rights that may be known as
or referred to as "moral rights." To the extent Employee retains any such moral
rights under applicable law, Employee hereby waives such moral rights and
consents to any action consistent with the terms of this Agreement with respect
to such moral rights, in each case, to the full extent of such applicable law.
Employee will confirm any such waivers and consents from time to time as
requested by the Company.
(f) Blue Pencil. If any court of competent jurisdiction shall at any
time deem the duration or the geographic scope of any of the provisions of this
Section 9 unenforceable, the other provisions of this Section 9 shall
nevertheless stand and the duration and/or geographic scope set forth herein
shall be deemed to be the longest period and/or greatest size permissible by
-11-
law under the circumstances, and the parties hereto agree that such court shall
reduce the time period and/or geographic scope to a permissible duration or
size.
Section 10. BREACH OF RESTRICTIVE COVENANTS.
Without limiting the remedies available to the Company, Employee
acknowledges that a breach of any of the covenants contained in Section 9 hereof
may result in material irreparable injury to the Company or its subsidiaries for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction, without the
posting of a bond or the necessity of proving irreparable harm or injury as a
result of such breach or threatened breach of Section 9 hereof, restraining
Employee from engaging in activities prohibited by Section 9 hereof or such
other relief as may be required specifically to enforce any of the covenants in
Section 9 hereof. Notwithstanding any other provision to the contrary, the
Non-Compete Period, in the case of the covenants contained in Section 9(b), and
the Non-Interference Period, in the case of the covenants contained in Section
9(c), shall be tolled during any period of violation of any of such covenants
and during any other period required for litigation during which the Company
seeks to enforce such covenants against Employee or another Person with whom
Employee is affiliated if it is ultimately determined that Employee was in
breach of such covenants.
Section 11. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE.
Employee represents and warrants to the Company that:
(a) Employee's employment will not conflict with or result in his
breach of any agreement to which he is a party or otherwise may be bound;
(b) Employee has not violated, and in connection with his employment
with the Company will not violate, any non-solicitation, non-competition or
other similar covenant or agreement of a prior employer by which he is or may be
bound; and
(c) In connection with Employee's employment with the Company, he will
not use any confidential or proprietary information that he may have obtained in
connection with employment with any prior employer.
Section 12. INDEMNIFICATION.
Subject to the terms and conditions of the Memorandum of Association
and Bye-Laws of the Company (in each case, as in effect from time to time), the
Company agrees to indemnify and hold Employee harmless to the fullest extent
permitted by the laws of Bermuda, as in effect at the time of the subject act or
omission. In connection therewith, Employee shall be entitled to the protection
of any insurance policies which the Company elects to maintain generally for the
benefit of the Company's directors and officers, against all costs, charges and
expenses whatsoever incurred or sustained by Employee in connection with any
action, suit or proceeding to which he may be made a party by reason of his
being or having been a director,
-12-
officer or employee of the Company. This provision shall survive any termination
of Employee's employment hereunder.
Section 13. TAXES.
The Company may withhold from any payments made under this Agreement
all applicable taxes, including, but not limited to, income, employment and
social insurance taxes, as shall be required by law.
Section 14. NO MITIGATION OR SET OFF.
Employee shall not be required to mitigate the amount of any payment
provided for pursuant to this Agreement by seeking other employment or otherwise
and the amount of any payment provided for pursuant to this Agreement shall not
be reduced by any compensation earned as a result of Employee's other employment
or otherwise.
Section 15. SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES.
(a) The Company. This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company to, any purchaser of all or
substantially all of the Company's business or assets or any successor to the
Company (whether direct or indirect, by purchase, merger, consolidation or
otherwise). The Company will require, in a writing delivered to Employee, any
such purchaser, successor or assignee to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such purchase, succession or assignment had
taken place. The Company may make no other assignment of this Agreement or its
obligations hereunder.
(b) Employee. Employee's rights and obligations under this Agreement
shall not be transferable by Employee by assignment or otherwise, without the
prior written consent of the Company; provided, however, that if Employee shall
die, all amounts then payable to Employee hereunder shall be paid in accordance
with the terms of this Agreement to Employee's devisee, legatee or other
designee or, if there be no such designee, to Employee's estate.
(c) No Third-Party Beneficiaries. Except as otherwise set forth in
Section 8(b) or Section 15(b) hereof, nothing expressed or referred to in this
Agreement will be construed to give any Person other than the Company and
Employee any legal or equitable right, remedy or claim under or with respect to
this Agreement or any provision of this Agreement.
Section 16. WAIVER AND AMENDMENTS.
Any waiver, alteration, amendment or modification of any of the terms
of this Agreement shall be valid only if made in writing and signed by each of
the parties hereto; provided, however, that any such waiver, alteration,
amendment or modification is consented to on the Company's behalf by the Board.
No waiver by either of the parties hereto of their rights hereunder shall be
deemed to constitute a waiver with respect to any subsequent occurrences or
transactions hereunder unless such waiver specifically states that it is to be
construed as a continuing waiver.
-13-
Section 17. SEVERABILITY.
If any covenants or such other provisions of this Agreement are found
to be invalid or unenforceable by a final determination of a court of competent
jurisdiction: (a) the remaining terms and provisions hereof shall be unimpaired,
and (b) the invalid or unenforceable term or provision hereof shall be deemed
replaced by a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision hereof.
Section 18. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
Section 19. DISPUTE RESOLUTION.
Any controversy arising out of or relating to this Agreement or the
breach hereof (other than claims for injunctive relief pursuant to Section 10
hereof) shall be settled by binding arbitration in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association
(before a single arbitrator) and judgment upon the award rendered may be entered
in any court having jurisdiction thereof. The costs of any such arbitration
proceedings shall be borne equally by the Company and Employee; provided,
however, that the arbitrator shall have the right to award to either party
reasonable attorneys' fees and costs expended in the course of such arbitration
or enforcement of the awarded rendered thereunder. Any award made by such
arbitrator shall be final, binding and conclusive on the parties for all
purposes, and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
Section 20. NOTICES.
(a) Every notice or other communication relating to this Agreement
shall be in writing, and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided, provided that,
unless and until some other address be so designated, all notices or
communications by Employee to the Company shall be mailed or delivered to the
Company at its principal executive office, and all notices or communications by
the Company to Employee may be given to Employee personally or may be mailed to
Employee at Employee's last known address, as reflected in the Company's
records.
(b) Any notice so addressed shall be deemed to be given: (i) if
delivered by hand, on the date of such delivery; (ii) if mailed by courier or by
overnight mail, on the first business day following the date of such mailing;
and (iii) if mailed by registered or certified mail, on the third business day
after the date of such mailing.
-14-
Section 21. SECTION HEADINGS.
The headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof, affect the meaning or interpretation of this Agreement or of any term
or provision hereof.
Section 22. ENTIRE AGREEMENT.
This Agreement constitutes the entire understanding and agreement of
the parties hereto regarding the employment of Employee. This Agreement
supersedes all prior negotiations, discussions, correspondence, communications,
understandings and agreements between the parties relating to the subject matter
of this Agreement.
Section 23. SURVIVAL OF OPERATIVE SECTIONS.
Upon any termination of Employee's employment, the provisions of
Section 8 through Section 25 of this Agreement (together with any related
definitions set forth in Section 1 hereof) shall survive to the extent necessary
to give effect to the provisions thereof.
Section 24. CURRENCY.
All sums of money expressed in this Agreement are in the lawful money
of the United States of America.
Section 25. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. The execution of this Agreement may be
by actual or facsimile signature.
[Signatures to appear on the following page.]
-15-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
ALLIED WORLD ASSURANCE COMPANY HOLDINGS,
LTD
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ALLIED WORLD ASSURANCE COMPANY, LTD
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EMPLOYEE
By:
------------------------------------
[____________________]
-16-
