PLATINUM UNDERWRITERS BERMUDA, LTD. The Belvedere Building 69 Pitts Bay Road Pembroke HM08 Bermuda February 26, 2006
Exhibit 10.2
PLATINUM UNDERWRITERS BERMUDA, LTD.
Xxx Xxxxxxxxx Xxxxxxxx
00 Xxxxx Xxx Xxxx
Xxxxxxxx XX00 Xxxxxxx
Xxx Xxxxxxxxx Xxxxxxxx
00 Xxxxx Xxx Xxxx
Xxxxxxxx XX00 Xxxxxxx
February 26, 2006
Xx. Xxxxxx X. Xxxxxx
Platinum Re (UK) Limited
Fitzwilliam House
00 Xx. Xxxx Xxx
Xxxxxx, XX0X 0XX
Xxxxxx Xxxxxxx
Platinum Re (UK) Limited
Fitzwilliam House
00 Xx. Xxxx Xxx
Xxxxxx, XX0X 0XX
Xxxxxx Xxxxxxx
Dear Xxxxxx:
I am writing this letter (this “Letter Agreement”) to confirm the terms and conditions of your
employment with Platinum Underwriters Bermuda, Ltd. (“Platinum Bermuda”), a wholly owned subsidiary
of Platinum Underwriters Holdings, Ltd. (“Platinum Holdings”).
1. Term of Employment.
Your employment hereunder will commence on March 1, 2006 or such later date that you shall
have received the approval of the Bermuda Department of Immigration (the “Effective Date”) and,
subject to termination as provided in Section 11, shall end on the third anniversary of the
Effective Date; provided that, on the third anniversary and each anniversary thereafter, the term
of your employment shall automatically be extended by an additional year unless Platinum Bermuda or
you give the other party written notice, at least 90 days prior to such anniversary, that Platinum
Bermuda has determined or you have determined that the term shall not be so extended. Such
employment period, as extended, shall hereinafter be referred to as the “Term.”
2. Title and Duties.
During the Term, you will serve as Chief Executive Officer of Platinum Bermuda. You will have
such duties and responsibilities and power and authority as those normally associated with such
position, plus any additional duties and responsibilities or power and authority assigned to you by
the Chairman of Platinum Bermuda.
3. Base Salary.
During the Term, Platinum Bermuda will pay you a minimum base salary (“Base Salary”) at an
annual rate of US$425,000, payable in cash in accordance with Platinum Bermuda’s payroll practices
as in effect from time to time. Your Base Salary shall be reviewed annually by the Chairman of
Platinum Bermuda.
4. Bonus.
During each fiscal year of the Term, you will be eligible for an annual performance bonus
(“Annual Bonus”) pursuant to the terms of Platinum Holdings’ Amended and Restated Annual Incentive
Plan. Your Annual Bonus will have an incentive target equal to 100% of Base Salary (the “Target
Bonus”) with the range of bonus payout to be from 0% to 200% of Base Salary, depending upon the
achievement of performance objectives established under the Amended and Restated Annual Incentive
Plan. For purposes of your Annual Bonus for fiscal year 2006, your Base Salary shall be
US$425,000. Your Annual Bonus will be paid in accordance with the terms of the Amended and
Restated Annual Incentive Plan following the end of the applicable fiscal year, subject to such
terms and conditions as the Compensation Committee of the Board of
Directors of Platinum Holdings (the “Committee”)
shall require and in such form as determined by the Committee. A portion of your bonus will be
paid in the form of restricted share units (the “Bonus
RSUs”), the terms of which will be set forth in an Award
Agreement for Restricted Share Units between you and Platinum Holdings.
5. Equity Awards.
(a) Grant of Restricted Common Shares. On February 28, 2006, you will be granted by
Platinum Holdings under the terms of Platinum Holdings’ 2002 Share Incentive Plan (the “2002 Plan”)
an award of restricted shares (the “Restricted Shares”), the terms of which will be provided for in a
Restricted Share Award Agreement between you and Platinum Holdings.
(b) Grant of Options. On February 28, 2006, you will be granted by Platinum Holdings
under the terms of the 2002 Plan an award of options (the
“Options”) to purchase common shares, par value US$0.01 per
share, of Platinum Holdings (the “Common Shares”) with an exercise
price per Common Share equal to the “Fair Market Value” (as defined in the 2002 Plan) of a Common
Share on the date of grant. The terms of the Options will be provided for in a Nonqualified Share
Option Agreement between you and Platinum Holdings; provided, however, that, notwithstanding any provision in the
Nonqualified Share Option Agreement to the contrary, the Options shall become fully and immediately
vested and exercisable upon the termination of your employment for Good Reason or without Cause.
(c) You shall not be entitled to receive any additional awards of Common Shares, restricted
Common Shares, options or other equity securities of Platinum Holdings until March 2009.
6. Executive Incentive Plan Awards.
During the Term, you will be a participant in Platinum Holdings’ Amended and Restated
Executive Incentive Plan. During each year of the Term, it is expected that you will be granted a
target annual award opportunity of 75% of your Base Salary, payable if certain performance
objectives are achieved by Platinum Holdings over a multi-year period (each, an “EIP Award”). The
actual amount, the terms and conditions and the form of payment of any EIP Award will be determined
by the Committee in its sole discretion, in accordance with the terms of the Amended and Restated
Executive Incentive Plan.
7. Share Ownership Guidelines.
You will be required to accumulate 30,000 Common Shares in accordance with the Share Ownership
Guidelines adopted by the Board of Directors of Platinum Holdings (the “Guidelines”) before selling
any Common Shares received under any of Platinum Holdings’ compensation plans, subject to certain
exceptions set forth in the Guidelines.
8. Employee Benefits.
During the Term, you will be eligible to participate in the employee benefit plans and
arrangements that are generally available to senior executives of Platinum Bermuda, subject to the
terms and conditions of such plans and arrangements. The Board of Directors of Platinum Bermuda
reserves the right to amend or terminate any employee benefit plan or arrangement at any time, and
to adopt any new plan or arrangement.
9. Platinum Expatriate Benefits.
Platinum Bermuda will pay you US$50,000 for the costs and expenses reasonably incurred by you
(including duty taxes) in connection with your family’s relocation to Bermuda. Platinum Bermuda
will provide you with a housing and living allowance of US$22,500 per month and a car allowance of
US$700 per month during the Term. You will be responsible for any tax liability associated with
these payments.
10. Business Expenses.
During the Term, Platinum Bermuda will reimburse you for all reasonable expenses incurred by
you in carrying out your duties and responsibilities under this Letter Agreement in accordance with
its policies for senior executives as in effect from time to time.
11. Termination of Employment.
(a) Termination for Good Reason or Without Cause. If you terminate your employment
during the Term for Good Reason or if your employment is terminated during the Term by Platinum
Bermuda without Cause, (i) you will receive, immediately upon the
effectiveness of such termination, a lump sum cash payment equal to the sum of (A) one year’s
Base Salary and Target Bonus and (B) any earned but unpaid Base Salary and other amounts (including
reimbursable expenses and any vested amounts or benefits under Platinum Bermuda’s employee benefit
plans or arrangements) accrued or owing through the date of effectiveness of such termination under
the terms of the applicable arrangement; and (ii) your Bonus RSUs, Restricted Shares, Options and
EIP Awards will vest in accordance with their respective terms except as otherwise set forth
herein. The foregoing payment and vesting will be conditioned upon you executing and honoring a
standard waiver and release of claims in favor of Platinum Bermuda in a form determined by Platinum
Bermuda.
(b) Termination Other than for Good Reason; Termination for Cause. If you terminate
your employment during the Term other than for Good Reason or if your employment is terminated by
Platinum Bermuda during the Term for Cause, all Bonus RSUs, Restricted Shares, Options and EIP
Awards will be forfeited in accordance with their respective terms and you will receive no further
payments, compensation or benefits under this Letter Agreement, except you will receive, upon the
effectiveness of such termination, any earned but unpaid Base Salary and other amounts (including
reimbursable expenses and any vested amounts or benefits under Platinum Bermuda’s employee benefit
plans or arrangements) accrued or owing through the date of effectiveness of such termination under
the terms of the applicable arrangement.
(c) Death or Disability. Upon the termination of your employment during the Term on
account of your death or “Disability” (as defined below), (i) you or your beneficiaries will
receive (A) a pro-rata portion through the date of effectiveness of such termination of your Target
Bonus for the year of termination and (B) any earned but unpaid Base Salary and other amounts
(including reimbursable expenses and any vested amounts or benefits under Platinum Bermuda’s
employee benefit plans or arrangements) accrued or owing through the date of effectiveness of such
termination under the terms of the applicable arrangement; and (ii) your Bonus RSUs, Restricted
Shares, Options and EIP Awards will vest in accordance with their respective terms except as
otherwise set forth herein.
(d) Definitions.
(i) Cause. For purposes of this Letter Agreement, “Cause” means (A) your
willful and continued failure to substantially perform your duties hereunder; (B) your
conviction of, or plea of guilty or nolo contendere to, a felony or other crime involving
moral turpitude; (C) your engagement in any malfeasance or fraud or dishonesty of a
substantial nature in connection with your position with Platinum Bermuda, or other willful
act that materially damages the reputation of Platinum Bermuda; (D) your breach of any
restrictive covenants in Section 12 hereof or in any option or other award agreement between
you and Platinum Holdings; or (E) prior to the accumulation of 30,000 Common Shares by you,
the sale, transfer or hypothecation by you during the Term of Common Shares in violation of
the Guidelines.
(ii) Good Reason. For purposes of this Letter Agreement, “Good Reason” means,
without your express written consent, (A) Platinum Bermuda reduces your Base Salary or your
Target Bonus; (B) Platinum Bermuda reduces the scope of your duties, responsibilities or
authority; (C) you are required to report to anyone other than the
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Chairman of Platinum Bermuda; (D) you are required to be principally based other than
in Platinum Bermuda’s offices in Bermuda; or (E) Platinum Bermuda breaches any other
material provision of this Letter Agreement; provided, however, that if you
voluntarily consent to any reduction or change described above in lieu of exercising your
right to resign for Good Reason and deliver such consent to Platinum Bermuda in writing,
then such reduction or change shall not constitute “Good Reason” hereunder, but you shall
have the right to resign for Good Reason under this Letter Agreement as a result of any
subsequent reduction or change described above.
(iii) Disability. For purposes of this Letter Agreement, “Disability” means a
termination of your employment by Platinum Bermuda, if you have been rendered incapable of
performing your duties by reason of any medically determined physical or mental impairment
that can be expected to result in death or that can be expected to last for a period of
either (A) six or more consecutive months from the first date of your absence due to the
disability or (B) nine or more months during any twelve-month period.
12. Covenants.
In exchange for the remuneration outlined above, in addition to providing services to Platinum
Bermuda as set forth in this Letter Agreement, you agree to the following covenants, which you
agree are intended to survive the Term and any termination or expiration of this Letter Agreement:
(a) Confidentiality. During the period of your employment and for all periods
following any termination of your employment for any reason, you will keep confidential any trade
secrets and confidential or proprietary information of Platinum Bermuda or Platinum Re (UK) Limited
(“Platinum UK”) which are now known to you or which hereafter may become known to you as a result
of your employment or association with Platinum Bermuda or Platinum UK, and will not at any time,
directly or indirectly, disclose any such information to any person, firm or corporation, or use
the same in any way other than in connection with the business of Platinum Bermuda during, and at
all times after, the termination of your employment. For purposes of this Letter Agreement, “trade
secrets and confidential or proprietary information” means information unique to Platinum Bermuda
or Platinum UK which has a significant business purpose and is not known or generally available
from sources outside Platinum Bermuda or Platinum UK or typical of industry practice, but shall not
include any of the foregoing (i) information that becomes a matter of public record or is published
in a newspaper, magazine or other periodical available to the general public, other than as a
result of any act or omission by you or (ii) information that is required to be disclosed by any
law, regulation or order of any court or regulatory commission, department or agency, provided that
you give prompt notice of such requirement to Platinum Bermuda or Platinum UK to enable Platinum
Bermuda or Platinum UK to seek an appropriate protective order or confidential treatment.
(b) Non-Solicitation. You further covenant that during the term of your employment
with Platinum Bermuda and during the fifteen-month period following termination of such employment
for any reason, you will not, without the prior written consent of Platinum Bermuda or Platinum UK,
directly or indirectly, hire, or cause to be hired by an enterprise with which you may ultimately
become associated, any senior executive of Platinum Bermuda or
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Platinum UK at the time of termination of your employment with Platinum Bermuda (defined for
such purposes to include executives to whom you report, that report directly to you or that report
directly to such executives that report directly to you).
(c) Enforcement. You acknowledge that if you breach any provision of this Xxxxxxx 00,
Xxxxxxxx Xxxxxxx will suffer irreparable injury. It is therefore agreed that Platinum Bermuda
shall have the right to enjoin any such breach, without posting any bond, if permitted by a court
of the applicable jurisdiction. You hereby waive the adequacy of a remedy at law as a defense to
such relief. The existence of this right to injunctive, or other equitable relief, shall not limit
any other rights or remedies which Platinum Bermuda may have at law or in equity including, without
limitation, the right to monetary, compensatory and punitive damages. You acknowledge and agree
that the provisions of this Section 12 are reasonable and necessary for the successful operation of
Platinum Bermuda. In the event an arbitrator or a court of competent jurisdiction determines that
you have breached your obligations in any material respect under this Xxxxxxx 00, Xxxxxxxx Xxxxxxx,
in addition to pursuing all available remedies under this Letter Agreement, at law or otherwise,
and without limiting its right to pursue the same shall cease all payments to you under this Letter
Agreement. If any provision of this Section 12 is determined by a court of competent jurisdiction
to be not enforceable in the manner set forth in this Letter Agreement, you and Platinum Bermuda
agree that it is the intention of the parties that such provision should be enforceable to the
maximum extent possible under applicable law. If any provisions of this Section 12 are held to be
invalid or unenforceable, such invalidation or unenforceability shall not affect the validity or
enforceability of any other provision of this Letter Agreement (or any portion thereof).
13. Miscellaneous Provisions.
(a) All compensation paid to you under this Letter Agreement shall be subject to all
applicable income tax, employment tax and all other federal, state and local tax withholdings and
deductions.
(b) This Letter Agreement constitutes the entire agreement between you and Platinum Bermuda
with respect to the subject matter hereof and supercedes any and all prior agreements or
understandings between you and Platinum Bermuda or any of its subsidiaries or affiliates with
respect to the subject matter hereof, whether written or oral. This Letter Agreement may not be
amended or terminated without the prior written consent of you and Platinum Bermuda.
(c) This Letter Agreement may be executed in any number of counterparts which together will
constitute but one agreement.
(d) This Letter Agreement will be binding on and inure to the benefit of Platinum Bermuda’s
respective successors and, in your case, your heirs and other legal representatives. Other than as
provided herein, the rights and obligations described in this Letter Agreement may not be assigned
by either party without the prior written consent of the other party.
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(e) Subject to Section 12(c) of this Letter Agreement, all disputes arising under or related
to this Letter Agreement will be settled by arbitration under the Commercial Arbitration Rules of
the American Arbitration Association then in effect as the sole and exclusive remedy of either
party. Such arbitration shall be held in New York City. Any judgment on the award rendered by
such arbitration may be entered in any court having jurisdiction over such matters. Each party’s
costs and expenses of such arbitration, including reasonable attorney fees and expenses, shall be
borne by such party, unless you are, in whole, and not in part, the prevailing party in the award
entered in such arbitration, in which case, all such costs and expenses shall be borne by Platinum
Bermuda.
(f) All notices under this Letter Agreement will be in writing and will be deemed effective
when delivered in person, or five (5) days after deposit thereof in the mails, postage prepaid, for
delivery as registered or certified mail, addressed to the respective party at the address set
forth below or to such other address as may hereafter be designated by like notice. Unless
otherwise notified as set forth above, notice will be sent to each party as follows:
Xxxxxx X. Xxxxxx, to:
The address maintained in Platinum Bermuda’s records
Platinum Bermuda, to:
Platinum Underwriters Bermuda, Ltd.
The Belvedere Building
69 Xxxxx Bay Road
Pembroke HM08, Bermuda
Attention: Chairman
The Belvedere Building
69 Xxxxx Bay Road
Pembroke HM08, Bermuda
Attention: Chairman
In lieu of personal notice or notice by deposit in the mail, a party may give notice by confirmed
fax or e-mail, which will be effective upon receipt.
(g) This Letter Agreement will be governed by and construed and enforced in accordance with
the laws of the State of New York without reference to rules relating to conflict of laws.
(h) This Letter Agreement supercedes any inconsistent provisions of any plan or arrangement
that would otherwise be applicable to you to the extent such provisions would limit any rights
granted to you hereunder or expand any restrictions imposed on you hereby.
If this Letter Agreement correctly reflects your understanding, please sign and return one
copy to me for Platinum Bermuda’s records.
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| Platinum Underwriters Bermuda, Ltd. |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxxx X. Xxxxx | ||||
| Chairman | ||||
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The above Letter Agreement correctly reflects our understanding, and I hereby confirm my agreement
to the same.
|
/s/ Xxxxxx X. Xxxxxx |
||
Dated
as of February 26, 2006 |
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