EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made effective as of the 23rd day of March, 1998, among ESG Re
Limited, a Bermuda company (the "Company") and its various subsidiaries and Xxxx
X. Xxxxxxx ("Executive").
WHEREAS, the Company wishes to retain the services of the Executive and
recognizes that the Executive's contribution to the growth and success of the
Company will be substantial; and
WHEREAS, the Executive is willing to commit herself to serve the Company, on the
term and conditions herein provided.
NOW, THEREFORE, in order to effect the foregoing, the Company and the Executive
wish to enter into an employment agreement on the terms and conditions set forth
below. Accordingly, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to be employed by the Company, on the terms and
conditions set forth herein.
2. TERM
The term of the Executive's employment hereunder shall commence as of
the date hereof and shall continue until the close of business on the
third anniversary of the date hereof, subject to earlier termination in
accordance with the terms of this Agreement (the "Term"). The Term
shall be automatically extended for successive one year periods
thereafter unless any of the parties notifies the other in writing of
its intention not to so extend the Term at least one year prior to the
commencement of the next scheduled one year extension.
3. POSITION AND DUTIES
(a) Title and Duties
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The Executive shall serve a Chief Financial Officer of the
Company and shall have such duties, authority and
responsibilities as are normally associated with and
appropriate for such positions. The Executive shall
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report directly to the Chief Executive Officer of the Company.
The Executive shall devote substantially all of her working
time and efforts to the business and affairs of the Company,
at such locations, including Germany, Bermuda, Ireland and
Toronto and/or as mutually agreed upon by the Executive and
the Company. The Executive shall not serve as Director or
Officer of any unaffiliated companies, including but not
limited to, any charitable organization or chamber of commerce
without the written consent of the Company.
(b) Office and Facilities
---------------------
The Executive shall be provided with appropriate office and
secretarial facilities at the Company's offices in Hamburg,
Germany and any other location that the Company reasonably
deems necessary to have an office and support services in
order for the Executive to perform her duties to the Company.
The Executive shall serve as a Director or Officer of the
Company and shall agree to serve on other committees of the
Company or any other affiliated company, without additional
compensation, if so requested by the Company.
4. COMPENSATION
(a) Base Salary
-----------
During the Term, the Company shall pay to the Executive an
annual base salary of US $250,000. The Executive's base salary
shall be paid in substantially equal instalments on a basis
consistent with the Company's payroll practices. The
Executive's base salary, as in effect at any time, is
hereinafter referred to as the "Base Salary". The Compensation
Committee of the Board (the "Compensation Committee") shall
review the Executive's performance on an annual basis and may
increase the Executive's Base Salary, in its sole discretion,
as it deems appropriate.
At the request of the Executive, the Company will pay up to
70% of the Base Salary in Deutsche Xxxx.
(b) Annual Bonus
------------
The Compensation Committee may award the Executive an annual
bonus, at such time and in such amount as the Compensation
Committee, in its sole discretion, deems appropriate.
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5. EMPLOYEE BENEFITS
(a) Benefit Plans
-------------
The Executive shall be entitled to participate in all employee
benefit plans, which include worldwide medical, dental and
vision coverage, perquisite and fringe benefit arrangements of
the Company generally made available by the Company to its
executives, subject to, and on a basis consistent with the
terms, conditions and administration of such plans and
arrangements.
(b) Expenses
--------
The Executive shall be entitled to receive prompt
reimbursement for all reasonable and customary expenses
incurred by the Executive in performing services hereunder,
including all expenses of travel and living expenses while
away from home on business at the request of and in the
service of the Company or any of its affiliates and promoting
the business of the Company, provided that such expenses are
incurred and accounted for in accordance with the policies and
procedures established by the Company.
(c) Vacation
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The Executive shall be entitled to vacations and holidays on a
basis consistent with that offered to other senior executive
officers of the Company.
(d) Tax Equalization
----------------
In the event that the Executive will be subject to taxes in
excess of those that would otherwise have been due under US
tax code as a US citizen working in the US, ESG Re will
compensate the Executive for the difference.
6. TERMINATION OF EMPLOYMENT
The Company and the Executive may each terminate the Executive's
employment hereunder and the Term for any reason.
(a) Termination by the Company without Cause or by the Executive
for Good Reason
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If the Company shall terminate the Executive's employment
without "Cause" (as defined in Section 6(f)), or if the
Executive resigns for Good
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Reason (as defined in Section 6(f) then, the Executive shall
be entitled to her Base Salary for the greater of (1) the
remainder of the Term, or (2) one year, subject to and
conditioned upon the Executive's compliance with Sections 7
and 8 hereof. Options held by the Executive will be treated as
provided for in the applicable Award Agreement. In addition,
the company will reimburse reasonable relocation costs for a
move back to the United States.
Except as expressly provided above, the Company will have no
further obligations to the Executive hereunder following the
Executive's termination of employment under the circumstances
described in this Section 6(a).
(b) Termination due to Non-Renewal of the Term or Death or
Disability
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If the Executive's employment is terminated due to the
non-renewal of the Term or due to the Executive's death or
disability (as defined in Section 6(f)), the Executive shall
be entitled to a lump sum cash payment equal to the
Executive's Base Salary through the date of termination.
Options held by the Executive will be treated as provided for
in the applicable Award Agreement. In addition, the Company
will reimburse reasonable relocation costs for a move back to
the United States for the spouse or named beneficiary.
Except as expressly provided above, the Company will have no
further obligations to the Executive hereunder following the
Executive's termination of employment under the circumstances
described in this Section 6(b).
(c) Termination by the Company for Cause of by the Executive other
than for Good Reason
--------------------------------------------------------------
If the Executive's employment is terminated by the Company for
Cause or by the Executive other than for Good Reason, the
Executive shall be entitled to a lump sum cash payment equal
to her Base Salary through the date of termination. Options
held by the Executive shall be treated as provided for in the
applicable Award Agreement.
Except as expressly provided above, the Company will have no
further obligations to the Executive hereunder following the
Executive's termination of employment under the circumstances
described in this Section 6(c).
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(d) Termination within one year of a Change in Control
--------------------------------------------------
If the Company terminates the Executive's employment without
Cause or the Executive terminates her employment for Good
Reason within one year following a Change in Control, the
Executive shall be entitled, in addition to the compensation
otherwise payable upon her termination of employment pursuant
to Section 6(a) above, to a lump sum payment which, when added
to the present value of all other benefits or payments to
which the Executive is entitled which would constitute
"Parachute Payments" (as defined in Section 28OG of the U.S.
Internal Revenue Code of 1986, as amended (the "Code"));
equals 2.99 times the Executive's "Base Amount" (as defined in
Section 28OG of the Code). In addition, the Company will
reimburse reasonable relocation costs for a move back to the
United States.
(e) Notice of Termination
---------------------
Any termination of the Executive's employment by the Company
or by the Executive (other than termination pursuant to the
Executive's death) shall be communicated by written Notice of
Termination to the other party hereto in accordance with
Section 11 hereof. If the Company terminates the Executive's
employment for Cause or if the Executive resigns for Good
Reason, the "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision
so indicated. For purposes of this Agreement, the date of the
Executive's termination of employment shall be deemed to be
the date of receipt of the Notice of Termination.
(f) Definitions - For purpose of this Agreement:
-----------
(i) "Cause" shall mean
(1) The Executive's breach of any material term of this
Agreement, including, but not limited to, the
covenants set forth in Sections 7 and 8 hereof;
(2) The Executive's failure or refusal to perform her
duties hereunder or to perform specific directives of
the Company, provided that such directives do not
violate any applicable law or industry standards;
(3) Dishonesty of the Executive affecting the Company or
any affiliates;
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(4) Any gross or willful conduct of the Executive
resulting in substantial loss to or theft from any of
the Company or any affiliate; or substantial damage
to the Company's reputation or theft from the
Company; or
(5) Alcoholism or use of drugs or any controlled
substances which interferes with the performance of
the Executive's duties and responsibilities under
this Agreement;
(6) The Executive is charged with a felony or other
serious crime, whether or not related to the business
of the Company, including but not limited to, any
crime related to tax evasion, bribery, theft,
political payoffs, etc.
(ii) "Change in Control" shall mean the occurrence of any of the
following: (i) the sale, lease, transfer or other disposition,
in one or a series of related transactions, of all or
substantially all of the assets of the Company other than to
any of the Affiliates, or (ii) a merger or sale of the Company
pursuant to which the shareholders of the Company immediately
prior to such merger or sale do not own a majority of the
stock of the Company or the surviving corporation immediately
after such merger or sale.
(iii) "Disability" shall mean the Executive's adjudication as
mentally incompetent, or mental or physical disability
preventing the Executive from performing her duties under this
Employment Agreement for a period of 180 consecutive days.
(iv) "Good Reason" shall mean (1) a material diminution of the
Executive's duties (per Exhibit A as attached) or the
assignment to the Executive of a title or duties inconsistent
with her position as Chief Financial Officer of the Company,
(2) a material reduction mounting to at least 10% of the
Executive's base salary, or (3) a failure of the Company to
comply with any material provision of this Agreement.
7. NON-COMPETITION
(a) The Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its
affiliates and accordingly agrees as follows:
(i) During the Employment Term and for a period of 18
months following the Executive's termination of
employment (unless such termination of employment
occurs within one year following a Change in Control,
in which case this paragraph shall not be
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applicable) (the "Restricted Period"), the Executive
will not, unless the Executive is given written
permission by the Company, directly or indirectly,
(i) engage in any business for the Executive's own
account that competes with the business of the
Company or any of its affiliates that are engaged in
the insurance or reinsurance business (the "Company
Affiliates"),(ii) enter the employment of, or render
any services to, any person engaged in any business
that competes with the business of the Company or the
Company Affiliates, (iii) acquire a financial
interest in, or otherwise become actively involved
with, any person engaged in any business that
competes with the business of the Company or the
Company Affiliates, directly or indirectly, as an
individual, partner, shareholder, officer, director,
principal agent, trustee or consultant, or (iv)
interfere with business relationships (whether formed
before or after the date of this Agreement) of the
Company or the Company Affiliates.
(ii) Notwithstanding anything to the contrary in this
Agreement, the Executive may, directly or indirectly
own, solely as an investment, securities of any
person engaged in the business of the Company or the
Company Affiliates if the Executive (i) is not a
controlling person or a member of a group which
controls, such person and (ii) does not, directly or
indirectly, own more than one share less than 5% of
any class of securities of such person.
(iii) During the Restricted Period, the Executive will not,
directly or indirectly, (i) solicit or encourage any
employee of the Company or the Company Affiliates to
leave the employment of the Company or the Company
Affiliates, or (ii) hire any such employee who has
left the employment of the Company or the Company
Affiliates (other than as a result of the termination
of such employment by the Company or the Company
Affiliates) within one year after the termination of
such employees employment with the Company or the
Company Affiliates.
(iv) During the Restricted Period, the Executive will not,
directly or indirectly, solicit or encourage to cease
to work with the Company or the Company Affiliates
any consultant then under contract with the Company
or the Company Affiliates.
(b) It is expressly understood and agreed that although the
Executive and the Company consider the restrictions contained
in this Section 7 to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained
in this Agreement is an unenforceable restriction against the
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Executive, the provisions of this Agreement shall not be
rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds
that any restriction contained in this Agreement is
unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained
herein.
8. CONFIDENTIALITY
The Executive will not at any time (whether during or after her
employment with the Company) disclose or use for her own benefit or
purposes or the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation or other business
organization, entity or enterprise other than the Company and any of
their subsidiaries or affiliates, any trade secrets, information, data,
or other confidential information relating to customers, development
programs, costs, marketing & trading, investment, sales activities,
promotion, credit and financial data, financing methods, plans, or the
business and affairs of the Company or of any subsidiary or affiliate
of the Company, provided that foregoing shall not apply to information
which is not unique to the Company or any of its subsidiaries or
affiliates or which is generally known to the industry or the public
other than as a result of the Executive's breach of this covenant. The
Executive agrees that upon termination of her employment with the
Company for any reason, she will return to the Company immediately all
memoranda, books, papers, plans, information, letters and other data,
and all copies thereof or therefrom, in any way relating to the
business of the Company and its affiliates, except that she may retain
personal notes, notebooks and diaries. The Executive further agrees
that she will not retain or use for her account at any time any trade
names, trademarks or other proprietary business designations used or
owned in connection with the business of the Company or their
affiliates.
9. EQUITABLE RELIEF
The Executive acknowledges and agrees that the Company's remedies at
law for a breach or threatened breach of any of the provisions of
Section 7 or Section 8 would be inadequate and, in recognition of this
fact, the Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Company,
without posting any bond or security, shall be entitled to obtain
equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
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10. SUCCESSORS; BINDING AGREEMENT
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company 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 succession
had taken place. As used in this Agreement, "Company" shall
mean the Company as herein defined and any successor to its
business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 10 or
which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If
the Executive should die while any amounts an payable to her
hereunder all such amounts unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.
11. NOTICE
For the purpose of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered with
receipt acknowledged or after having been received by certified or
registered mail, return receipt requested, postage prepaid, addressed
as follows:
If to the Executive:
Xxxx X Xxxxxxx
Xxxxxxxxxxx 00
X - 00000 Xxxxxxx
If to the Company:
ESG Re Limited
Skandia International Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00
Xxxxxxx
Xxxxxxxxx: Chairman
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or to such other address as any party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
12. MISCELLANEOUS
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and such officer of the Company as may be
specifically designated by the Company as the case may be. No waiver by
any party hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of Bermuda
without regard to its conflicts of law principles.
13. VALIDITY
The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect.
14. 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.
15. WITHHOLDING
The Company may withhold from any amounts payable under this Agreement
such federal state and local and foreign taxes as may be required to be
withheld pursuant to applicable law or regulation.
16. ENTIRE AGREEMENT
This Agreement sets forth the entire agreement of the parties hereto in
respect of the subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto, including any prior
employment agreements other than those contained in the employment
offer dated 5th of March, 1998.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Executive has hereunto set his hand, effective as of 23rd day of March,
1998.
ESG Re Limited
By:
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Name: X.X. Xxx
Title: CEO
Xxxx X. Xxxxxxx
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EXHIBIT A
CHIEF FINANCIAL OFFICER
ESG RE LIMITED
DUTIES AND RESPONSIBILITIES
1. Manage the Company's accounting, SEC and other regulatory reporting
functions.
2. Ensure the conformance of an international operation with SEC and
international accounting and reporting standards.
3. Establish and maintain a financial/tax analysis, reporting, budgeting
and planning capability that provides appropriate management
information and accountability reporting.
4. Represent the Company in its dealings with shareholders, regulators,
rating agencies and equity analysts; manage overall investors relations
activities and communications.
5. Play a key role in the development and implementation of the Company's
strategy; serve on the Company's Executive Committee.
6. Evaluate and maintain optimal capital structure; lead capital raising
efforts in public or private markets, as necessary.
7. Evaluate and recommend investment policy and strategy consistent with
Company parameters of credit rating, liquidity and liability
characteristics; ensure conformance with stated policy and strategy.
Evaluation, recommendation, policy and strategy will include both the
invested asset portfolio and strategic investments, mergers or
acquisitions.
8. Supervise the Company's systems (IT) operation and development.
9. Manage Treasury operations, including risk management, cash management,
banking relationships and credit facilities, pension and benefit plans.
10. Evaluate adequacy of loss reserves.
11. Provide personnel functions and support to the Company, including:
development of incentive compensation plans, human resource planning
and development, establishing appropriate hiring policies and
practices, implementing and administering all policies and procedures.
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12. Direct and provide management to the General Counsel of the Company or
legal staff, as required.
13. Ensure that an overall integrated framework of internal control is
maintained and that compliance is achieved.
14. Provide regular communication and information to the Board of Directors
regarding the financial results of the Company, significant business
and financial issues, and other items or requests that may arise.
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