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Exhibit 10.17
ANNUITY AND LIFE RE (HOLDINGS), LTD.
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of January 1, 1999 by and between Annuity & Life
Re (Holdings), Ltd., a Bermudian corporation (the "Company"), Annuity & Life
Reassurance, Ltd., a subsidiary of the Company organized under the laws of
Bermuda to engage in worldwide life and annuity reinsurance (the "Operating
Company"), and Xxxx Xxxxxxxx (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and the Operating Company desire that the Employee
serve as Vice President of the Company and Senior Vice President of the
Operating Company and the Employee is willing to serve in such capacities; and
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the parties hereto agree as follows:
Section: 1. Employment
Effective as of January 1, 1999, the Company and the Operating Company
will employ the Employee and the Employee will perform services for the Company
and the Operating Company on the terms and conditions set forth in this
Agreement and for the period ("Term of Employment") specified in Section 3
hereof. This Agreement may be terminated at any time during its initial term or
during any renewal term solely in accordance with the terms and conditions of
Section 11 hereof.
Section: 2. Duties
The Employee, during the Term of Employment, shall serve the Company as a
Vice President. The Employee shall also serve as a Senior Vice President of the
Operating Company. The employee shall be based at the Operating Company's
headquarters in Bermuda, other than for periodic travel in the ordinary course
of business. The Employee shall have such duties and responsibilities as are
assigned to him by the Boards of Directors of the Company and the Operating
Company commensurate with his positions as Vice President and Life Underwriter
of the Company and the Operating Company.
The Employee shall perform his duties hereunder faithfully and to the best
of his abilities and in furtherance of the business of the Company, and shall
devote his full business time, energy, attention and skill to the business of
the
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Company and to the promotion of its interests except as otherwise agreed by the
Company.
The Employee warrants and represents that he is free to enter into this
Agreement and is not restricted by any prior or existing agreement and the
Company and the Operating Company may rely on such representation in entering
into this Agreement.
Section: 3. Term of Employment
The initial Term of Employment of this Agreement shall be three years
commencing on January 1, 1999. At the end of the initial Term of Employment, and
on each anniversary thereof, the Term of Employment shall automatically be
extended for one additional year, unless the Company or the Employee shall have
given written notice to the other that it does not wish to extend this Agreement
at least three months in advance. If the Employee does not wish to continue
employment with the Company and the Operating Company or family reasons after
the end of the initial Term of Employment, the Company will pay reasonable
relocation expenses to the United States for the Employee if the Employee wishes
to be employed in the United States, subject to Section 13.
Section: 4. Salary
The Employee shall receive, as compensation for his duties and obligations
to the Company and the Operating Company, a salary at the annual rate of
$160,000, payable in substantially equal installments in accordance with the
Operating Company's payroll practice. It is agreed between the parties that the
Company shall review the base annual salary annually and in light of such review
may, in the discretion of the Board of Directors of the Company (but shall not
be obligated to), increase such base annual salary taking into account any
change in the Employee's then responsibilities, increases in the cost of living,
performance by the Employee, and other pertinent factors.
Section: 5. Bonus
During the Term of Employment, the Employee shall participate in the
Company's Incentive Compensation Plan, and will be eligible for an annual cash
bonus of up to two times his annual salary based on performance targets as
determined in accordance with the terms of the Plan.
Section: 6. Options
(a) Initial Options. The Company shall grant to the Employee the right and
option to purchase all or any part of an aggregate of 30,000 common shares at a
price determined by the Company's Compensation
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Committee. Thirty-three and one-thirds percent (33 1/3%) of the Initial Options
shall be exercisable after the first anniversary of the Grant, 33 1/3% of the
Options shall become exercisable after the second anniversary of the Grant,
and an additional 33 1/3% of the Options shall become exercisable after the
third anniversary thereof. In addition, no Option may be exercised after the
earlier of (A) the date that is (i) ninety (90) days following the termination
of the Employee's employment for any reason other than death, disability or
Serious Cause (as defined in Section 11), or (ii) six (6) months after the
termination of the Employee's employment by reason of death or disability or
(iii) the date upon which the Employee's employment is terminated for Serious
Cause; or (B) the tenth anniversary of the Grant date.
The consideration for the Ordinary Shares purchased upon exercise of the
Initial Options may be paid in cash or by any other method permitted by the
term of the Company's Initial Option Plan. The issuance of any Ordinary Shares
pursuant to the Initial Options shall in all events be subject to all
applicable securities laws and the Employee shall enter into any agreement
reasonably requested by the Company in order to ensure that all such issuances
are in full compliance therewith. The Employee shall not have any of the rights
and privileges of the shareholder of the Company with respect to the Ordinary
Shares issuable upon any exercise of Initial Options unless and until his
name is entered into the register of members of the Company in respect of such
Ordinary Shares. If there is any change in the number or nature of outstanding
shares of the Company's capital stock by reason of a share dividend,
recapitalization, merger, consolidation, scheme or arrangement, share split,
combination or exchange, share repurchase or otherwise, which in any case has a
dilutive or anti-dilutive effect on the Ordinary Shares, the number of Ordinary
Shares subject to each outstanding Initial Option, the exercise price thereof
and/or other terms thereof shall be appropriately adjusted by the Board of
Directors of the Company (or any committee thereof), whose determination shall
be conclusive, so as to restore the option holder of his rights thereunder.
(b) OTHER OPTIONS. During the Term of Employment, the Employee shall be
eligible to be granted options (in addition to the Initial Options) to purchase
Ordinary Shares at such price and subject to such terms as provided by the
Company's Initial Stock Option Plan, in the sole discretion of the Board of
Directors of the Company.
Section 7. EMPLOYEE BENEFITS
During the Term of Employment the Employee shall be entitled to participate
in all employee benefit programs of the Company, as such programs may be in
effect from time to time, including without limitation, pension and other
retirement plans, profit sharing plans, group life insurance, accidental death
and dismemberment insurance, hospitalization, surgical and major medical
coverage, sick leave (including salary continuation arrangements), long term
disability,
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holidays and vacations. The Company shall contribute monthly ten percent of the
base monthly salary of the employee to a retirement plan for the benefit of the
Employee.
Section: 8. Business Expenses
All reasonable travel and other expenses incidental to the rendering of
services by the Employee hereunder shall be paid by the Company and if expenses
are paid in the first instance by the Employee, the Company will reimburse him
therefor upon presentation of proper invoices; subject in each case to
compliance with the Company's reasonable reimbursement policies and procedures.
Section: 9. Housing and Travel Expenses
Effective January 1, 1999, the Company shall provide to the Employee the
sum of $8,333.00 monthly as an allowance to cover the expenses of housing and
the cost of living in Bermuda and for personal travel for the Employee and his
family.
Section 10. Vacations
The Employee shall be entitled to reasonable vacation and reasonable sick
leave each year (beginning with 1999), in accordance with policies of the
Company, as determined by the Board of Directors, provided, however, that the
Employee shall be entitled to a minimum of four (4) weeks vacation per year.
Section 11. Termination
(a) In the event of Serious Cause, as defined below, the Company may
terminate the Employee's employment and the Term of Employment upon written
notice of such termination stating the Serious Cause upon which the Company
relies for its termination. The Employee's employment and the Term of
Employment shall be terminated effective as of the date specified in such
notice, which shall in no event be earlier than the effective date of such
notice as provided in Section 20.
"Serious Cause" shall mean (i) the willful and continued failure by the
Employee to perform substantially his duties hereunder, other than by reasons
of health, after written demand for substantial performance is delivered by the
Company that identifies the manner in which the Company believes the Employee
has not substantially performed his duties, (ii) the Employee shall have been
indicted by any federal, state or local authority in any jurisdiction for, or
shall have pleaded guilty or nolo contendre to, an act constituting a felony,
(iii) the Employee shall have habitually abused any substance (such as narcotics
or alcohol), or (iv) the Employee shall have (A) engaged in acts of fraud,
material
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dishonesty or gross misconduct in connection with the business of the Company
of (B) committed a material breach of this Agreement.
(b) The Employee may terminate his employment and the Term of his
Employment in the event of Good Reason, as defined below, upon 30 days' prior
written notice of such termination stating the Good Reason upon which the
Employee relies for his termination. The Employee's employment and the Term of
Employment shall be terminated effective as of the date specified in such
notice, which in no event shall be earlier than the effective date of such
notice as provided in Section 20.
"Good Reason" shall mean (i) a substantial reduction in the Employee's
travel and living allowance, salary, or benefits, (ii) the demotion of the
Employee, (iii) a material reduction of the Employee's duties or
responsibilities hereunder, (iv) a material breach of this Agreement by the
Company, or (v) the occurrence of any action taken by the Company that would
constitute a constructive termination of the Employee's employment.
(c) In the event of termination of the Employee's employment and the Term
of Employment by the Company for Serious Cause or by the Employee without Good
Reason, the Employee shall forfeit all bonus amounts for the then current
fiscal year, and the Company shall be liable to the Employee only for (i) any
accrued but unpaid salary, (ii) any accrued but unpaid bonus from a prior
fiscal year, and (iii) reimbursement of business expenses incurred prior to the
date of termination.
(d) In the event of the death, retirement or disability of the Employee,
the Employee's employment and Term of Employment shall be terminated as of the
date of such death, retirement or disability and the Company shall pay the
Employee, or the Employee's estate or legal representative, as appropriate, (i)
any accrued but unpaid salary, (ii) any earned but unpaid bonus from a prior
fiscal year, (iii) reimbursement of business expenses incurred prior to the
date of termination, (iv) travel and housing allowances under Section 9 for six
months after the date of termination, and (v) reasonable relocation expenses
from Bermuda to the United States. The date of the Employee's disability shall
be deemed to be the last day of the sixth month during which the Employee has
been unable to carry out his position as provided below.
"Disability" shall mean the Employees inability, for reasons of health, to
carry out the functions of his position for a total of six (6) months during
any 12-month period of this Agreement. "Retirement" shall mean retirement from
employment upon attaining age 65 or such earlier age agreed to by the Company.
In addition, in such event, if the Company's Ordinary Shares are not then
publicly traded, the Company shall have the right to call any or all of the
Ordinary
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Shares of the Company owned by the Employee within six (6) months of death,
retirement or disability, and the Employee, the Employee's estate or legal
representative, whichever is appropriate, shall have the right to put any or
all of the Employee's Ordinary Shares to the Company within twelve (12) months
after death or within six (6) months after retirement or disability. The price
at which such put or call is exercisable shall be equal to the appraised value,
in each case measured as of the date of termination.
(e) If the Company should (i) terminate the Term of Employment and the
Employee's employment herein without Serious Cause, or (ii) if the Employee
should terminate the Term of Employment and his employment hereunder for Good
Reason, the Company shall continue to pay the Employee his base salary for a
period of one year from such termination. In addition, the Employee shall be
entitled to (A) any accrued but unpaid salary, (B) any earned but unpaid bonus
from a prior fiscal year, (C) reimbursement of business expenses incurred
prior to the date of termination, and (D) travel and housing allowances under
Section 9 for six months after the date of termination, and (E) reasonable
relocation expenses from Bermuda to the United States.
(f) In the event of the liquidation of the Company or in the event that
the Board of Directors elects to discontinue permanently operating the Company,
the Term of Employment and the Employee's employment herein shall be terminated
as of the date of such liquidation or discontinuance and the Company shall pay
the Employee (i) any accrued but unpaid salary, (ii) any earned but unpaid
bonus from a prior fiscal year, (iii) unreimbursed business expenses incurred
prior to the date of termination, (iv) travel and housing allowances under
Section 9 for two months after the date of termination, and (v) reasonable
relocation expenses from Bermuda to the United States. In addition, the
Employee shall be entitled to receive one year's base salary from the date on
which the Employee's employment is terminated.
Section: 12. Change of Control
(a) Notwithstanding any other provision contained herein, the Employee's
Initial Options and other options issued under the Company's share option plans
that are not then exercisable shall become exercisable (and be deemed to be
vested) on the date on which a Change of Control of the Company occurs. In
addition, restricted Ordinary Shares granted under any of the Company's share
option plans shall immediately vest upon a Change of Control of the Company.
(b) If (i) the employment of the Employee is terminated by the Company
(or successor thereto) without Serious Cause or (ii) the Employee terminates
employment with the Company (or successor thereto) for Good Reason or because
of the failure of a successor to the Company to expressly assume and agree to
perform this Agreement, within the period commencing on
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the date that a Change of Control is formally proposed to the Company's Board of
Directors and ending on the first anniversary of the date on which such Change
of Control occurs, then the Employee shall be entitled to receive (in lieu of
the benefits described in Section 11): (1) any accrued but unpaid salary, (2) a
lump sum payment equal to two times such Employee's annual base salary as of the
date of termination, (3) any accrued but unpaid bonus from a prior fiscal year,
(4) reimbursement of business expenses incurred prior to the date of
termination, (5) travel and housing allowances under Section 9 for one year
following the date of termination, (6) reasonable relocation expenses from
Bermuda to the United States, together with (7) a gross-up of any income taxes
payable by the Employee by reason of such payments occurring in connection with
a change of control.
The Employee shall not be entitled to any benefits or other entitlements
under this section unless a Change of Control actually occurs.
(c) A "Change of Control" of the Company shall be deemed to have occurred
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 Securities Exchange Act of 1934 (the "Exchange
Act"), excluding the Company or any of its subsidiaries, a trustee or any
fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries, an underwriter temporarily holding securities pursuant
to an offering of such securities or a corporation owned, directly or
indirectly, by shareholders of the Company in substantially the same proportion
as their ownership of the Company, is or becomes the "beneficial owner" (as
defined in rule 13d-3 under the Exchange Act), directly or indirectly, of
securities ("Voting Securities"); (ii) during any period of not more than two
years, individuals who constitute the Board of Directors of the Company (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 the
Company to effect a transaction described in clause (i) or (iii) of this
sentence) whose election by the Board or nomination for election by the
Company's 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 the
Company approve a merger, consolidation or reorganization or a court of
competent jurisdiction approves a scheme of arrangement of the Company, other
than a merger, consolidation, reorganization or scheme of arrangement which
would result in the Voting Securities of the Company 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 the Company or such
surviving entity outstanding immediately after such merger, consolidation,
reorganization or scheme of arrangement; or (iv) the shareholders of the Company
approve a plan of complete liquidation of the
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Company or any agreement for the sale of substantially all of the Company's
assets.
Section: 13. Agreement Not to Compete
(a) The Employee hereby covenants and agrees that at no time during the
Term of Employment nor for a period of (i) one year immediately following the
termination of the Employee's employment by the Company without Serious Cause or
by the Employee for Good Reason or (ii) two years following the termination of
the Employee's employment for any other reason, will he for himself or on behalf
of any other person, partnership, company or corporation, directly or
indirectly, acquire any financial or beneficial interest in (except as provided
in the next sentence) any entity engaged in any business directly competitive to
the business engaged in by the Company or the Operating Company at the time of
such termination of employment. Notwithstanding the preceding sentence, the
Employee shall not be prohibited from owning less than one (1%) percent of any
publicly traded corporation, whether or not such corporation is in competition
with the Company or the Operating Company. Additionally, the Employee will not
become employed by any non-United States entity engaged in a directly
competitive business. Furthermore, the employee will not enter into competition
with the Company or Operating Company for a period of two years following
termination. For purposes of this Employment Agreement, "competition" will mean
soliciting business from any clients of the Company and/or Operating Company.
Clients of the Company and/or Operating Company are those companies for whom the
Company and/or Operating Company has reinsured business during the Employee's
period of employment under this agreement.
(b) The Employee hereby covenants and agrees that, at all times during the
Term of Employment and for a period of two years immediately following the
termination thereof, the Employee shall not directly or indirectly employ or
seek to employ any person or entity employed at that time by the Company or any
of its subsidiaries, or otherwise encourage or entice such person or entity to
leave such employment.
Section: 14. Confidential Information
(a) The Employee agrees to keep secret and retain in the strictest
confidence all confidential matters which relate to the Company or any
affiliate of the Company, including, without limitation, customer lists, client
lists, trade secrets, pricing policies and other business affairs of the
Company and any affiliate of the Company learned by him from the Company or any
such affiliate or otherwise before or after the date of this Agreement, and not
to disclose any such confidential matters to anyone outside the Company or any
of its affiliates, whether during or after his period of service with the
Company, except as may be required in the course of a legal or governmental
proceeding. Upon request by
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the Company the Employee agrees to deliver promptly to the Company upon
termination of his services for the Company, or at any time thereafter as the
Company may request, all Company or affiliate memoranda, notes, records,
reports, manuals, drawings, designs, computer files in any media and other
documents (and all copies thereof) relating to the Company's or any affiliate's
business and all property of the Company or any affiliate associated therewith,
which he may then possess or have under his control.
Section: 15 Remedy
(a) Should the Employee engage in or perform, either directly or
indirectly, and of the acts prohibited by Sections 13 or 14 hereof, it is agreed
that the Company shall be entitled to full injunctive relief, to be issued by
any competent court of equity, enjoining and restraining the Employee and each
and every other person, firm, organization, association, or corporation
concerned therein, from the continuance of such violative acts. The foregoing
remedy available to the Company shall not be deemed to limit or prevent the
exercise by the Company shall not be deemed to limit or prevent the exercise by
the Company of any or all further rights and remedies which may be available to
the Company hereunder or at law or in equity.
(b) The Employee acknowledges and agrees that the covenants contained in
this Agreement are fair and reasonable in light of the consideration paid
hereunder, and the invalidity or unenforceability of any particular provision,
or part of any provision, of this Agreement shall not affect the other
provisions or parts hereof. If any provision hereof is determined to be invalid
or unenforceable by a court of competent jurisdiction, the Employee shall
negotiate in good faith to provide the Company with protection as nearly
equivalent to that found to be invalid or unenforceable and if any such
provision shall be so determined to be invalid or unenforceable by reason of the
duration or geographical scope of the covenants contained therein, such duration
or geographical scope, or both, shall be considered to be reduced to a duration
or geographical scope to the extent necessary to cure such invalidity.
Section 16. Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
Employee, his heirs, executors, administrators and beneficiaries, and the
Company, the Operating Company and their successors and assigns.
Section 17. Governing Law
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without reference to rules
relating to conflicts of law.
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Section: 18. Entire Agreement
This Agreement constitutes the full and complete understanding and
agreement of the parties and supersedes all prior understandings and agreements
as to employment of the Employee. This Agreement cannot be amended, changed,
modified or terminated without the written consent of the parties hereto.
Section: 19. Waiver of Breach
The waiver by either party of a breach of any term of this Agreement shall
not operate nor be construed as a waiver of any subsequent breach thereof.
Section: 20. Notices
Any notice, report, request or other communication given under this
Agreement shall be written and shall be effective upon delivery when delivered
personally, by Federal Express or by fax.
Unless otherwise notified by any of the parties, notices shall be sent to
the parties as follows:
To Employee: Xxxx Xxxxxxxx
Sea Cliffs #3
00 Xxxxx Xxxx
Xxxxxxx, XX 00, Xxxxxxx
To the Company: Annuity & Life Reassurance, Ltd.
Cumberland House
PO Box HM 98
Xxxxxxxx, XX AX, Bermuda
Section: 21. Severability
If any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
Section: 22. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as on
the day and year first above written.
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Annuity & Life Re (Holdings), Ltd.
By: /s/ Xxxxxxxx X. Xxxxx
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Annuity & Life Reassurance, Ltd.
By: /s/ Xxxxxxxx X. Xxxxx
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