Exhibit 99.2
Form of
Agreement
To Amend
Employment Agreement
THIS AGREEMENT (the "Agreement"), made and entered into as of June 10, 1999
(the "Effective Date") by and among Capital Re Corporation, a Delaware
corporation (the "Company"), ACE Limited, a holding company incorporated with
limited liability under the Cayman Islands Company Law ("ACE"), and _______ (the
"Executive");
WITNESSETH THAT:
WHEREAS, the Executive is currently employed by the Company, and the
Company, and the Executive have entered into an employment agreement dated
February 2, 1999 (the "Employment Agreement");
WHEREAS, the Company, ACE, and CapRe Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of ACE, are concurrently entering into
an agreement and plan of merger, dated the date hereof (the "Merger Agreement");
and
WHEREAS, the parties hereto wish to agree to amend the Employment Agreement
in accordance with the following terms, with such amendment to be contingent
upon the closing of the Merger and to be effective upon the Closing Date, as
such terms are defined in the Merger Agreement;
NOW, THEREFORE, IT IS AGREED, by and among the parties hereto as follows,
effective as of the Effective Date, that the Employment Agreement shall be
amended, effective as of the Closing Date, to incorporate the following terms:
1. Section 2 of the Employment Agreement will be amended to provide that the
initial term of the Employment Agreement will be extended to January 31,
2003 and each reference to a date in said section shall be increased by two
years.
2. Section 3 of the Employment Agreement will be amended to provide that the
Executive shall serve as ______ or in a comparable position based on
responsibility, compensation, duties and authority, as determined by ACE
and the Company.
3. Subsection 5(a) of the Employment Agreement will be amended to the extent
necessary to clarify that a bonus will be payable to the Executive in
accordance with the 1999 Capital Re Bonus Plan, based on targets for the
period June 30, 1999 through December 31, 1999, and based on six months of
Base Salary Earnings.
4. Subsection 5(b) of the Employment Agreement will be amended to provide
that, in addition to the Retention Bonuses payable under that subsection
(which payments include $250,000 on January 1, 2000 and $225,000 on January
31, 2001), and to delete clauses (a) and (b). Executive will receive
additional payments of $200,000 on January 1, 2002 and $200,000 on January
1, 2003; provided,
however, that each such additional payment is contingent upon the
Executive's continued employment with the Company on the date designated
for payment.
5. Subsection 5(f) of the Employment Agreement will be amended to provide the
following:
(a) The Executive will be granted the option to purchase 50,000 shares of
common stock of ACE on the Closing Date such options exercisable at
the market price of an ACE share in effect at the close of trading on
the Closing Date (the "Grant Date"); provided, however, that if the
average of the closing prices for ACE shares for the five trading days
immediately prior to the Grant Date (the "Grant Date Price") is higher
than the average of the closing prices for ACE shares for the five
trading days immediately prior to June 10, 1999 (the "Execution Date
Price"), then the Executive shall also be awarded shares of ACE
restricted stock; the number of which shall be determined by (i)
multiplying by 50,000 the difference between the Grant Date Price and
the Execution Date Price, and (ii) dividing that product by the Grant
Date Price. The foreging award of opinion and restricted stock shall
vest ratably over three years, and shall be subject to the terms and
conditions of the ACE 1995 Long-Term Incentive Plan or the ACE 1998
Long-Term Incentive Plan ("ACE's Long Term Incentive Plans"), as
designated by ACE; and
(b) The Executive will be granted 20,000 restricted shares of common stock
of ACE on the Closing Date. Such award of restricted stock shall vest
ratably over three years, and shall be subject to the terms and
conditions of ACE's Long Term Incentive Plans, as designated by ACE;
and
(c) The Executive shall be eligible to receive future awards under ACE's
Long Term Incentive Plans in accordance with ACE's usual practice for
similarly-situated executives, including for ACE's 1999 fiscal year if
the Merger is completed prior to ACE's 1999 fiscal year.
6. Section 10 of the Employment Agreement will be amended, to the extent
necessary, to clarify that ACE and its business are included within the
protections relating to non-competition and non-solicitation.
7. Section 11 of the Employment Agreement will be amended, to the extent
necessary, to clarify that the Company, as the Surviving Corporation under
the Merger Agreement, continues to be party to the Employment Agreement,
and that the Merger does not result in a breach of the Employment
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.
ACE LIMITED
By: _____________________________
CAPITAL RE CORPORATION
By: _____________________________
__________________________________
Executive
