EXHIBIT 10.3
RESTRICTED SHARE AGREEMENTS -- EXECUTIVE OFFICERS
Each of the executive officers of Risk Capital Holdings, Inc. ("RCHI")
listed below has entered into Restricted Share Agreements with RCHI that are
substantially identical in all material respects to the agreement, dated as of
September 19, 1995, between RCHI and Xxxx X. Xxxxx, a copy of which is being
filed herewith in this Exhibit 10.3, except for the terms indicated below:
EXECUTIVE OFFICER DATE RESTRICTED SHARES*
----------------- ---- -----------------
Xxxx X. Xxxxx September 19, 1995 100,000
(see attached
agreement)
Xxxxx X. Xxxxx November 13, 1995 25,000
Xxxxxx X. Xxxxxxxx October 2, 1995 25,000
Xxxx X. Xxxxxxxx September 20, 1995 25,000
_____________
* Such term is defined in the attached agreement.
* * * *
RISK CAPITAL HOLDINGS, INC.
Restricted Share Agreement
THIS AGREEMENT, dated as of September 19, 1995, between Risk Capital
Holdings, Inc. (the "Company"), a Delaware corporation, and Xxxx X. Xxxxx (the
"Employee").
WHEREAS, the Employee has been designated to participate in the
Company's 1995 Long Term Incentive and Share Award Plan (as amended, the
"Plan");
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows.
1. AWARD OF SHARES. Pursuant to the provisions of the Plan, the
terms of which are incorporated herein by reference, the Employee is hereby
awarded 100,000 Restricted Shares (the "Award"), subject to the terms and
conditions herein set forth. Capitalized terms used herein and not defined
shall have the meanings set forth in the Plan.
2. TERMS AND CONDITIONS. It is understood and agreed that the Award
of Restricted Shares evidenced hereby is subject to the following terms and
conditions:
(a) VESTING OF AWARD. Subject to the other terms and conditions of
this Agreement, this Award shall become vested in accordance with the following
schedule:
THE FOLLOWING NUMBER
OF RESTRICTED SHARES
SHALL BE VESTED ON
ON THIS DATE EACH RESPECTIVE DATE
9/19/96 20,000
9/19/97 20,000
9/19/98 20,000
9/19/99 20,000
9/19/00 20,000
; provided that all such shares shall immediately become vested (i) to the
extent provided in Section 2(b) hereof and (ii) upon a Change in Control.
"Change in Control" means and shall be deemed to have occurred if:
a. any person (within the meaning of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), other than a Permitted Person or an
Initial Investor, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting
Securities representing 35% or more of the total voting power of all the
then outstanding Voting Securities; or
b. any Initial Investor is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
Voting Securities representing 50% percent or more of the total voting
power of all the then outstanding Voting Securities; or
c. the individuals who, as of the date hereof, constitute the Board
of Directors of the Company together with those who become directors
subsequent to such date and whose recommendation, election or nomination
for election to the Board was approved by a vote of at least a majority of
the directors then still in office who either were directors as of such
date or whose recommendation, election or nomination for election was
previously so approved, cease for any reason to constitute a majority of
the members of the Board; or
d. the required stockholders of the Company approve a merger,
consolidation, recapitalization, liquidation, sale or disposition by the
Company of all or substantially all of the Company's assets, or
reorganization of the Company (provided that all material regulatory
approvals have been obtained), or consummation of any such transaction,
other than any such transaction which (x) would result in at least 60% of
the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
beneficially owned by the former stockholders of the Company and (y) not
otherwise be deemed a Change in Control under subparagraphs a, b, c or e of
this Section 2(a); or
e. the Board adopts a resolution to the effect that, for purposes
hereof, a Change in Control has occurred.
(i) "Initial Investors" means (A) X.L. Insurance Company, Ltd.;
(B) The Trident Partnership, L.P.; (C) Xxxxx & XxXxxxxx Risk Capital
Holdings, Ltd.; or (D) any majority-owned subsidiary or parent (or
equivalent in the case of a non-corporate entity) of the foregoing.
(ii) "Permitted Persons" means (A) the Company; (B) any Related
Party; or (C) any group (as defined in Rule 13d-3 under the Exchange
Act) comprised of any or all of the foregoing.
(iii) "Related Party" means (A) a majority-owned subsidiary of the
Company; (B) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any majority-owned subsidiary
of the Company; or (C) a corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportion
as their ownership of Voting Securities.
(iv) "Voting Security" means any security of the Company which
carries the right to vote generally in the election of directors.
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(b) TERMINATION OF SERVICE; FORFEITURE OF UNVESTED SHARES. In the event
the Employee ceases to be an employee of the Company, (i) due to retirement
after attainment of age 65, (ii) due to death or disability, as determined under
the Company's long-term disability plan, or (iii) due to (A) termination by the
Company without cause (as defined in the Employee's employment agreement dated
September 19, 1995) or (B) constructive termination (as defined below), the
Restricted Shares subject to the Award, to the extent not already vested in
full, shall become immediately and fully vested at the time of such termination
of service. Subject to Section 2(a), if the Employee ceases to be an employee
of the Company for any other reason, the portion of the Award which is not then
vested shall be forfeited by the Employee and become the property of the
Company. For purposes of this Agreement, service with Risk Capital Reinsurance
Company, the Company's wholly owned subsidiary, shall be considered to be
service with the Company. "Constructive termination" means the occurrence, with
respect to the Employee, of any of the following: (i) the assignment of duties
inconsistent with such Employee's position or a significant diminution in
his/her responsibilities; (ii) a reduction in such Employee's base salary or
bonus opportunity; (iii) the requirement that such Employee work at a location
outside of Fairfield County, Connecticut, or Westchester County, New York; or
(iv) the failure to secure the agreement of any successor corporation or other
entity to the Company to fully assume the Company's obligations under the
arrangements described herein.
(c) CERTIFICATES. Each certificate issued in respect of Restricted Shares
awarded hereunder shall be deposited with the Company, or its designee, together
with, if requested by the Company, a stock power executed in blank by the
Employee, and shall bear a legend disclosing the restrictions on transferability
imposed on such Restricted Shares by this Agreement (the "Restrictive Legend").
Upon the vesting of Restricted Shares pursuant to Section 2(a) or 2(b) hereof
and the satisfaction of any withholding tax liability pursuant to Section 5
hereof, the certificates evidencing such vested Shares, not bearing the
Restrictive Legend, shall be delivered to the Employee.
(d) RIGHTS OF A STOCKHOLDER. Prior to the time a Restricted Share is
fully vested hereunder, the Employee shall have no right to transfer, pledge,
hypothecate or otherwise encumber such Restricted Share. During such period,
the Employee shall have all other rights of a stockholder, including, but not
limited to, the right to vote and to receive dividends at the time paid on such
Restricted Shares.
(e) NO RIGHT TO CONTINUED EMPLOYMENT. This Award shall not confer upon
the Employee any right with respect to continuance of employment by the Company
nor shall this Award interfere with the right of the Company to terminate the
Employee's employment at any time.
3. TRANSFER OF SHARES. The Shares delivered hereunder, or any interest
therein, may be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set
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forth in the governing instruments of the Company, applicable United States
federal and state securities laws or any other applicable laws or regulations
and the terms and conditions hereof. Each certificate for Shares delivered
hereunder, unless at the time of issuance such Shares are registered under the
Securities Act of 1933, as amended, shall bear the following legend or such
other legend as the Company deems appropriate:
"The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended (the 'Act'), and may not be offered,
sold or otherwise transferred except (i) in compliance with the provisions
of any applicable state securities or 'Blue Sky' laws and (ii) (A) pursuant
to an effective registration under the Act, (B) in compliance with Rule 144
under the Act, (C) inside the United States to a Qualified Institutional
Buyer in compliance with Rule 144A under the Act, (D) outside the United
States in compliance with Rule 904 of Regulation S under the Act or
(E) inside the United States to an institutional 'accredited investor' as
defined in Rule 501(a)(1), (2), (3) or (7) under the Act in a transaction
which, in the opinion of counsel reasonably satisfactory to the Company,
qualifies as an exempt transaction under the Act and the rules and
regulations promulgated thereunder."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend or such other legend deemed appropriate by the
Company shall also bear such legend unless, in the opinion of counsel for the
Company, the securities represented thereby need no longer be subject to the
restriction contained herein. The provisions of this Section 3 shall be binding
upon all subsequent holders of certificates bearing the above legend.
4. EXPENSES OF ISSUANCE OF SHARES. The issuance of stock certificates
hereunder shall be without charge to the Employee. The Company shall pay, and
indemnify the Employee from and against any issuance, stamp or documentary taxes
(other than transfer taxes) or charges imposed by any governmental body, agency
or official (other than income taxes) or by reason of the issuance of Shares.
5. WITHHOLDING. The Employee agrees to make appropriate arrangements
with the Company for satisfaction of any applicable tax withholding
requirements, or similar requirements, arising out of this Agreement.
6. REFERENCES. References herein to rights and obligations of the
Employee shall apply, where appropriate, to the Employee's legal representative
or estate without regard to whether specific reference to such legal
representative or estate is contained in a particular provision of this
Agreement.
7. SETTLEMENT OF DISPUTES. Any dispute between the parties arising from
or relating to the terms of this Agreement shall be resolved by arbitration held
in the State of Connecticut 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.
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8. NO MITIGATION. To the extent that the vesting of any portion of the
Award is accelerated upon a Change in Control or upon a termination of service
as provided herein, neither the Shares delivered hereunder nor any interest
therein, shall be reduced by any compensation received by the Employee in
connection with any other employment.
9. NOTICES. Any notice 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 by courier, or sent 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:
Risk Capital Holdings, Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn.: Secretary
If to the Employee:
Xxxx X. Xxxxx
[address of Employee]
10. 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
principles of conflict of laws.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties relating to the subject matter hereof, and any previous
agreement or understanding among the parties with respect thereto is superseded
by this Agreement.
12. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
RISK CAPITAL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------
Xxxxx X. Xxxxx
Managing Director, General Counsel
and Secretary
/s/ Xxxx X. Xxxxx
------------------------
Xxxx X. Xxxxx
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