Exhibit 10.11.2
MID
OCEAN
R e i n s u r a n c e
EMPLOYMENT
AGREEMENT
XXXXX X.X. XXXXXXX
EMPLOYMENT AGREEMENT
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(amended and restated as of August 19, 1996)
AGREEMENT, made and entered into this 19th day of August, 1996 by
and between Mid Ocean Reinsurance Company Ltd., a Bermuda corporation (the
"Company"), and Xxxxx X. X. Xxxxxxx (the "Executive").
WHEREAS, on November 1, 1995, the Company and the Executive
entered into an employment agreement (the "Prior Agreement") pursuant to
which the Company agreed to employ the Executive, and the Executive agreed
to serve, as resident Senior Vice President and Chief Underwriting Officer,
subject to the terms and conditions of such Prior Agreement; and
WHEREAS, the Company desires to amend and restate the Prior
Agreement as set forth herein; and
WHEREAS, the Executive wishes to continue such employment under
the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration,
the Company and the Executive (the "Parties") agree as follows:
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1. EMPLOYMENT.
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The Company hereby employs the Executive, and the Executive
hereby accepts employment with the Company, for the term of this Agreement
as set forth in Section 2, below, in the position with duties and
responsibilities set forth in Section 3, below, and upon such other terms
and conditions as are hereinafter stated.
2. TERM OF EMPLOYMENT.
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The term of employment under this Agreement shall commence on
August 19, 1996 (the "DATE OF THE AGREEMENT") and shall continue through
the close of business on the third anniversary of the Date of the
Agreement, subject to earlier termination as provided in Section 9, below.
Thereafter such term shall automatically be renewed for successive one-year
periods unless the Company gives notice in writing to the Executive or the
Executive gives notice in writing to the Company at least 60 days prior to
the then scheduled expiration date that the term is not to so renew.
3. POSITIONS, DUTIES AND RESPONSIBILITIES.
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(a) GENERAL. The Executive shall be employed as Resident Chief
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Underwriting Officer and Executive Vice President for the Company, with
such duties and responsi-
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bilities, including but not limited to underwriting, as may be assigned to
him by the President and Chief Executive Officer or his successor. In
carrying out his duties and responsibilities, the Executive shall report to
the President and Chief Executive Officer. During the term of this
Agreement, the Executive shall devote his full business time to the
business and affairs of the Company, including any corporation, partnership
or other venture in which the Company owns, directly or indirectly, 50
percent or more of the stock or, in the case of any entity or venture other
than a corporation, 50 percent or more of the equity interest (an
"AFFILIATE"), and shall use his best efforts, skills and abilities to
promote the Company's interests.
(b) PERFORMANCE OF SERVICES. The Executive shall be stationed in
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Bermuda and his services under this Agreement shall be generally performed
in Bermuda unless the Executive and the Company's Board of Directors (the
"BOARD") mutually agree in writing to the performance of such duties in
another location outside the United States.
(c) PERMITTED ACTIVITIES. Anything herein to the contrary
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notwithstanding, nothing shall preclude the Executive from (i) serving on
the boards of directors of a
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reasonable number of other corporations or the boards of a reasonable
number of trade associations and/or charitable organizations, (ii) engaging
in charitable activities and community affairs and (iii) managing his
personal investments and affairs, provided such activities do not
materially interfere with the proper performance of his duties and
responsibilities as resident chief Underwriting Officer for the Company.
4. BASE SALARY.
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The Executive shall be paid a Base Salary by the Company at an
annual rate of US$325,000, payable in accordance with the Company's regular
pay practices. Such Base Salary shall be subject to annual review and may
be increased at the discretion of the Executive Committee of the Board.
5. ANNUAL BONUS.
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In addition to the Base Salary provided for in Section 4, above,
the Executive may be awarded such annual bonuses as may be determined by
the Executive Committee of the Board, based on whatever incentive programs
have been adopted by the Company for senior executives of the Company, and
Parent (as defined below) as well as the performance of the Executive and
the performance of the Com-
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pany. Any bonus shall be paid in cash in a lump sum promptly following
determination thereof. In any event, each annual bonus shall be at least
$50,000.
6. STOCK OPTION.
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The Executive will be awarded Stock Options ("OPTIONS") under the
1993 Long-Term Incentive and Share Award Plan (the "PLAN") of the Company's
parent, Mid Ocean Limited, a Cayman Islands corporation (the "PARENT")
periodically as appropriate on the terms set forth in the Plan.
7. EMPLOYEE BENEFIT PROGRAMS.
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During the term of the Executive's employment under this
Agreement, the Executive shall be entitled to participate in all employee
benefit programs of the Company and Parent as are in effect from time TO
time and in which senior executives of the Company and Parent an eligible
to participate.
8. BUSINESS EXPENSE REIMBURSEMENT AND FRINGE BENEFITS.
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(a) EXPENSE REIMBURSEMENT. During the term of the Executive's
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employment under this Agreement, the Executive shall be entitled to receive
reimbursement by the Company or Parent for all reasonable out-of-pocket
travel ex-
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penses, entertainment expenses and other expenses incurred by him in
performing services under this Agreement, provided that the Executive
submits reasonable documentation with respect to such expenses. This shall
include, without limitation, reimbursement of any such costs for air fare
(which the Executive shall be entitled to on a first-class basis), hotel
accommodations and meals.
(b) FRINGE BENEFITS. During the term of the Executive's employment
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under this Agreement, the Executive shall be entitled to participate in any
of the Company's and Parent's executive fringe benefits in accordance with
the terms and conditions of such arrangements as are in effect from time to
time for the Company's and Parent's senior executives. In all events, the
Executive shall be entitled during the period he is employed to the
following:
(i) a living allowance of up to US$8,000 per month (to be
prorated for partial months) while the services are generally
performed in Bermuda,
(ii) use of an automobile in Bermuda,
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(iii) reimbursement of the cost (including initiation fees
and annual dues) of membership in two clubs in Bermuda,
(iv) reimbursement by the Company for the reasonable cost
of financial and tax planning, such reimbursement not to exceed
US$10,000 per year; and
(v) air fare for up to three round-trip first-class non-
business trips per year between London and Bermuda by the Executive
and such members of his family as may accompany him (the benefit under
this Section 8(b)(iv) being in addition to any reimbursement of air
fare described in Section 8(a)).
9. TERMINATION OF EMPLOYMENT.
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(a) TERMINATION DUE TO DEATH.
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In the event the Executive dies during the term of employment,
the Executive's spouse or, if she does not survive him, the estate or other
legal representative of the Executive shall be entitled to receive the
Executive's Base Salary as provided in Section 4, above, at the rate in
effect immediately prior to termination, through the
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end of the month in which the Executive dies. In addition to the above, the
estate or other legal representative of the Executive shall be entitled to:
(i) any annual bonus awarded but not yet paid under Section 5,
above,
(ii) a pro rata bonus for the year of death, if the Executive
Committee of the Board so determines,
(iii) the rights under any options as provided in Section 6,
above, in accordance with the terms thereof, and
(iv) any other rights and benefits available under employee
compensation or benefit programs of the Company, or their equivalent,
as provided in Section 7, above, and under business expense
reimbursement and fringe benefit programs as described in Section 8,
above, determined in accordance with the applicable terms and
provisions of such programs.
(b) TERMINATION DUE TO DISABILITY.
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In the event the Executive's employment with the Company is
terminated due to his disability, as determined under the Company's long-
term disability plan, the Executive shall be entitled to:
(i) the Base Salary as provided in Section 4, above, through
the end of the month in which the Executive's employment terminates
due to disability,
(ii) any annual bonus awarded but not yet paid under Section 5,
above,
(iii) the rights under the Options as provided in Section 6,
above, in accordance with the terms thereof,
(iv) any other rights and benefits available under employee
benefit programs of the Company, or their equivalent, as provided in
Section 7, above, including, without limitation, the terms of any
long-term disability plan, and under the business expense
reimbursement and fringe benefit programs as described in Section 8,
above, determined in accordance
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with the applicable terms and provisions of such programs.
(c) TERMINATION FOR CAUSE.
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(i) The employment of the Executive under this Agreement
may be terminated by the Company for Cause. For this purpose, "Cause"
shall mean:
(A) conviction of the Executive of a felony involving
moral turpitude, or
(B) the Executive, in carrying out his duties for the
Company under this Agreement, has been guilty of (I) gross
neglect or (II) gross misconduct.
(ii) In the event of a termination for Cause under Section
9(c)(i), above, the Executive shall be entitled only to:
(A) Base Salary as provided in Section 4, above, at
the rate in effect at the time of his termination of
employment for Cause, through the date on which termination
for Cause occurs,
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(B) the rights, if any, under the Options as provided in
Section 6, above, determined in accordance with the terms
thereof, and
(C) any other rights and benefits, if any, available under
employee benefit programs of the Company, or their equivalent, as
provided in Section 7, above, and under the business expense
reimbursement and fringe benefit programs as described in Section
8, above, determined in accordance with the applicable terms and
provisions of such programs.
(d) TERMINATION WITHOUT-CAUSE.
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(i) Anything in this Agreement to the contrary notwithstanding,
the Executive's employment may be terminated without Cause as provided
in this Section 9(d). A termination due to disability, as described in
Section 9(b), above, or a termination for Cause, as described in
Section 9(c), above, shall not be deemed a termination without Cause
under this Section 9(d).
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(ii) In the event the Executive's employment is terminated
without Cause (x) prior to a "CHANGE IN CONTROL" of Parent (as defined in
Exhibit A hereto) or (y) following the first anniversary of a Change of
Control, the Executive shall be entitled to:
(A) Base Salary as provided in Section 4, above, at the
rate in effect in accordance with Section 4, above, immediately
prior to such termination, payable in equal monthly installments
for a period of 12 months following the date of such termination,
(B) any annual bonus awarded but not yet paid under
Section 5, above,
(C) the rights under any Options as provided in Section 6,
above, in accordance with the terms thereof,
(D) continued coverage under the employee benefit programs
of the Company and Parent, or their equivalent, as provided in
Section 7, above, in which the Executive was participating at the
time of his termination of employment for the period of salary
con-
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tinuation or, if longer, for the period provided in such programs;
provided, however, that any such continued coverage shall be offset by
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comparable coverage provided to the Executive in connection with
subsequent full-time employment and, to the extent the Company or
Parent is unable to continue such coverage, the Company or Parent
shall provide the Executive with economically equivalent benefits
determined on an after-tax basis, and
(E) any other rights and benefits available under employee
benefit programs of the Company or Parent, or their equivalent, as
provided in Section 7, above and under the business expense
reimbursement and fringe benefit programs as described in Section 8,
above, determined in accordance with the applicable terms and
provisions of such programs.
(iii) In the event the Executives employment is terminated by the
Company without Cause within the 12 month period following a Change in
Control (the "POST-CHANGE Period"), or the
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Executive terminates his employment with the Company for "GOOD REASON"
(as defined in Exhibit B hereto) during the Post-Change Period, the
Executive shall be entitled to:
(A) Base Salary as provided in Section 4, above, at the rate in
effect in accordance with Section 4, above, immediately prior to such
termination, payable in equal monthly installments for a period of 24
months following the date of such termination,
(B) an amount equal to two times the largest annual bonus awarded to
the Executive in the three year period prior to the year in which a Change
of Control occurs, paid in equal monthly installments for the period of
Base Salary continuation,
(C) an amount equal to the annual bonus that would have been awarded
to Executive in respect of the year in which the Change in Control occurs,
multiplied by a fraction, the numerator of which is the number of months or
fraction thereof in which the Executive was employed by the Company in such
year, and the denominator of which is 12.
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(D) the rights under any Options as provided in Section 6, above, in
accordance with the terms thereof,
(E) continued coverage under the employee benefit programs of the
Company or Parent, or their equivalent, as provided in Section 7, above, in
which the Executive was participating at the time of his termination of
employment for the period of Base Salary continuation or, if longer, for
the period provided in such programs; provided, however, that any such
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continued coverage shall be offset by comparable coverage provided to the
Executive in connection with subsequent full-time employment and, to the
extent the Company or Parent is unable to continue such coverage, the
Company or Parent shall provide the Executive with economically equivalent
benefits determined on an after-tax basis, and
(F) any other rights and benefits available under employee benefit
programs of the Company or Parent, or their equivalent, as provided in
Section 7, above, and under the business expense reimbursement and fringe
benefit programs as described in Section 8, above, determined in accordance
with the applicable terms and provisions of such programs.
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(iv) If, at any time during the term of the Executive employment
hereunder, the Executive fails to be appointed (or re-appointed, as
appropriate) as resident Chief Underwriting Officer for the Company, the
Executive shall have the right to terminate his employment and such
termination, if prior to a Change in Control, shall be deemed a termination
by the Company without Cause under Section 9(d)(ii), above, or, if
following a Change in Control, shall be deemed a termination by the Company
without Cause under Section 9(d)(iii), above, provided the Executive shall
have given the Company written notice of his decision and shall not within
10 business days thereafter have been reinstated to the relevant position.
(e) VOLUNTARY TERMINATION BY THE EXECUTIVE.
--------------------------------------
The Executive may voluntarily terminate his employment prior to
the expiration of the term of this Agreement. Such termination shall
constitute a voluntary termination and, except as provided in Section
9(d)(iii) above, in such event the Executive shall be limited to the same
rights and benefits as applicable to a termination by
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the Company or Parent for Cause as provided in Section 9(c), above. A
voluntary termination under this Section 9(e) shall not be deemed a breach
of this Agreement. A termination of the Executive's employment due to
disability as described in Section 9(b), above, termination by the
Executive which the Executive is entitled to treat as a termination by the
Company or Parent pursuant to Section 9(d), above, or a termination by
Executive under Section 9(d)(iii), above, shall not be deemed a voluntary
termination within the meaning of this Section 9(c).
10. NO MITIGATION: NO OFFSET.
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In the event of any termination of employment under Section 9
above, the Executive shall be under no obligation to seek other employment,
and there shall be no offset against amounts due the Executive under this
Agreement on account of any remuneration attributable to any subsequent
employment that he may obtain.
11. NON-COMPETITION AND NONSOLICITATION.
-----------------------------------
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(a) NONCOMPETITION. During the term of his employment and for a
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period of 12 months thereafter, the Executive shall not engage in any
activities in Bermuda if such activities involve business that is
competitive with that being conducted by the Company or Parent. For
purposes of this Section 11, the Company or Parent shall be deemed to
include any entity that was an Affiliate of the Company or Parent during
the period of the Executive's employment as well as the time in question.
(b) NONSOLICITATION. During the term of the Executive's employment
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under this Agreement, and for a period of 12 months following termination
of employment, the Executive was not encourage any other employee of the
Company or Parent to leave the employ of the Company or Parent.
12. CONFIDENTIAL INFORMATION.
------------------------
The Executive covenants that he shall not, without the prior
written consent of the Board or a person authorized by the Board, disclose
to any person, other than an employee of the Company or Parent or other
person to whom disclosure is necessary to the performance by the Executive
of his duties in the employ of the Company or Parent, any confidential
proprietary information about the
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Company Parent or an Affiliate or their respective businesses, unless and
until such information has become known to the public generally (other than
as a result of unauthorized disclosure by the Executive) or unless he is
required to disclose such information by a court or by a governmental body
with apparent authority to require such disclosure. The foregoing covenant
by the Executive shall be without limitation as to time and geographic
application.
13. WITHHOLDING.
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Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company or Parent hereunder to the
Executive shall be subject to withholding of such amounts relating to taxes
as the Company or Parent may reasonably determine it should withhold
pursuant to any applicable law or regulation. In lieu of withholding such
amounts, in whole or in part, the Company or Parent may, in its sole
discretion, accept any other provision for payment of taxes as required by
law, provided it is satisfied that all requirements of law affecting its
responsibilities to withhold such taxes have been satisfied.
14. ENTIRE AGREEMENT.
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This Agreement, together with the Exhibits, contains the entire
agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations
and undertakings, whether written or oral, between the Company and the
Executive with respect thereto.
15. ASSIGNABILITY; BINDING NATURE.
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This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors, heirs and assigns. No rights
or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive other than his rights to competition and
benefits hereunder, which may be transferred by will or operation of law
subject to the limitations of this Agreement. No rights or obligations of
the Company under this Agreement may be assigned or transferred by the
Company except that such rights or obligations may be assigned or
tranferred pursuant to a merger or consolidation in which the Company is
not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of the Company, provided that the assignee
or transferee is the successor to all or substantially all of the assets of
the Company and such assignee or transferee assumes the liabilities,
obligations and duties of the Com-
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pany, as contained in this Agreement, either contractually or as a matter
of law.
16. INDEMNIFICATION.
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The Executive shall be provided indemnification by the Company to
the maximum extent permitted under the laws of Bermuda and the Memorandum
of Association and By-Laws of the Company. In addition, he shall be
covered by a directors and officers' liability policy with coverage for him
to the extent of US$50,000,000.
17. SETTLEMENT OF DISPUTES.
----------------------
Any dispute between the Parties arising from or relating to the
terms of this Agreement or the Executive's employment with the Company
shall be resolved by arbitration held in New York City in accordance with
the rules of the American Arbitration Association. All costs associated
with any arbitration, including all legal expenses, for both Parties shall
be borne by the Company.
18. AMENDMENT OR, WAIVER.
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No provision in this Agreement may be amended unless such
amendment is agreed to in writing, signed by the Executive and by a duly
authorized officer of the Company. No waiver by either Party of any breach
by the other Party of any condition or provision of this Agree-
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ment to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Executive
or a duly authorized officer of the Company, as the case may be.
19. NOTICES.
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Any notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or sent by courier, or by certified or registered
mail, postage prepaid, return receipt requested, duly addressed to the
Party concerned at the address indicated below or to such changed address
as such Party may subsequently by similar process give notice of:
If to the Company: Mid Ocean Reinsurance Company Ltd.
Xxxxxxxx Xxxxx,
00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx, XX XX
Bermuda
If to the Parent: Mid Ocean Limited
Xxxxxxxx Xxxxx,
00 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx, XX XX
Bermuda
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If to the Executive: Xxxxx X.X. Xxxxxxx
Xxxxxx House
3 Nantucket Lane
Smiths Parish FL 05
Bermuda
20. SEVERABILITY.
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In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole
or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
21. SURVIVORSHIP.
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The respective rights and obligations of the Parties shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
22. REFERENCES.
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In the event of the Executive's death or a judicial determination
of his incompetence, reference in this Agreement to the Executive shall be
deemed, where appropriate, to refer to his estate or other legal
representative.
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23. GOVERNING LAW.
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This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of New York without reference to
the principles of conflict of laws.
24. HEADINGS.
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The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control of affect the meaning
or construction of any provision of this Agreement.
25. COUNTERPARTS.
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This Agreement may be executed in one or more counterparts.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first written above.
Mid Ocean Reinsurance Company Ltd.
By: _____________________________
Mid Ocean Limited
By: _____________________________
_____________________________
Xxxxx X. X. Xxxxxxx
EXHIBIT A
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CHANGE IN CONTROL
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A "Change in Control" shall be deemed to have occurred if:
(i) on or after the date hereof, any person (which, for all
purposes hereof, shall include, without limitation, an
individual, sole proprietorship, partnership, unincorporated
association, unincorporated syndicate, unincorporated
organization, trust, body corporate and a trustee, executor,
administrator or other legal representative), or any group
(within the meaning of Section 13(d)(3) of the United States
Securities Exchange Act of 1934, as amended), becomes the
beneficial owner, directly or indirectly, of securities of the
Parent representing, or acquires the right to control or direct,
or to acquire through the conversion or exchange of securities
or the exercise of warrants or other rights to acquire
securities ("Beneficial Owner"), 20% or more of the combined
voting power of the Parent's then outstanding securities
("Significant Owner")
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(excluding any person who or group which, together with all affiliates and
associates of such person or group, would on the date of this Agreement
but for this clause be a Significant Owner as long as such person or group
does not subsequently become the Beneficial Owner of any additional
securities of the Parent in my manner other than a change in the aggregate
number of the outstanding securities of the Parent, and other than
pursuant to any purchase or acquisition permitted by the first full
paragraph of the second page of that Standstill Agreement dated June 2,
1995 between Parent and EXEL Limited) and, for the purposes hereto "voting
power" means the right to vote for the election of directors; or
(ii) at any time subsequent to the execution of this contract there
shall be elected or appointed to the Parents Board of Directors (the
"Parent Board") any director or directors whose appointment or election by
the Parent's shareholders was not approved by a vote of at least a
majority of the directors then still in office who were either directors
at the date
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hereof or whose election or appointment or nomination for election was
previously so approved.
The determination to be made pursuant to clause (i) above shall
be made on the basis that (x) all securities beneficially owned by the
person or group or over which control or direction is exercised by the
person or group which are convertible or exchangeable into securities
carrying voting rights have been converted or exchanged and all options,
warrants, exchange rights or other rights which may be exercised to acquire
securities beneficially owned by the person or group or over which control
or direction is exercised by the person or group have been exercised, and
(y) no such convertible or exchangeable securities have been converted or
exchanged by any other person and no such options, warrants, exchange
rights or other rights have been exercised by any other person.
EXHIBIT B
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GOOD REASON
For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent)"
(i) (A) The assignment to Executive of duties materially
inconsistent with Executive's position (including duties,
responsibilities, status, titles or offices as set forth in Section 2
hereof); or (B) any elimination or reduction of Executive's duties or
responsibilities except in connection with the termination of Executive's
employment for Cause, disability or as a result of Executive's death or by
Executive other than for Good Reason;
(ii) The (A) reduction in Executive's Base Salary from the
level in effect immediately prior to, or (B) Payment of an annual bonus in
an amount less than the most recent annual bonus paid prior to the Change
in Control;
(iii) The figure by the Company or Parent to obtain the
specific assumption of this Agreement by any successor or assign of Parent
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or the Company or any person acquiring substantially all of the Company's
or Parents assets;
(iv) Any material breach by the Company or Parent of any provision
of this Agreement or any agreements entered into pursuant thereto;
(v) Requiring Executive to be based at any office or location other
than those described in Section 2(a) hereof except for travel reasonably
required in the performance of the Executives responsibilities; or
(vi) During the twelve month period following a Change in Control,
(A) the failure to continue in effect any compensation plan in which
Executive participates at the time of the Change in Control unless an
equitable arrangement (embodied in an ongoing substitute or alternative
plan providing Executive with substantially similar benefits) has been
made with respect to such plan in connection with the Change in Control,
or the failure to continue Executive's participation therein on
substantially the same basis, both in terms of the amount of benefits
provided and the level of
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his participation relative to other participants, as existed at the time
of the Change in Control; or (B) the failure to continue to provide
Executive with benefits at least as favorable in the aggregate as those
enjoyed by him under any of the Company's or Parent's pension, life
insurance, medical, health and accident, disability, defferred
compensation or savings plans in which he was participating at the time of
the Change of Control, the taking of any action which would directly or
indirectly materially reduce any of such benefits or deprive Executive of
any fringe benefit enjoyed by him at the time of the Change of Control, or
the failure to provide him with the number of paid vacation days to which
he was entitled on the basis of the Company's practice with respect to him
as in effect at the time of the Change of Control.
