EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of the 1st
day of October, 2000 (the "Effective Date"), between HCC INSURANCE HOLDINGS,
INC. (the "Company" or "HCC"), and XXXXXXXXXXX X. XXXXXX ("Executive"),
sometimes collectively referred to herein as the "Parties."
RECITALS:
WHEREAS, Executive is to be employed by the Company, and, as an
integral part of its management, to participate in the decision-making process
relative to short and long-term planning and policy for the Company;
WHEREAS, it is the desire of the Company to directly engage Executive
as an officer of the Company, and
WHEREAS, Executive is desirous of committing himself to serve the
Company on the terms herein provided.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the Parties agree as follows:
1. TERM. The Company hereby agrees to employ Executive as Vice
President and General Counsel, and Executive hereby agrees to accept such
employment, on the terms and conditions set forth herein, for the period
commencing on the Effective Date and expiring as of 11:59 p.m. on December 31,
2003 (the "Basic Term") (unless sooner terminated as hereinafter set forth).
Subject to the terms of this Agreement, Executive agrees that he shall perform
his duties at the corporate home office of the Company, wherever that may be
located as determined from time to time by the Company.
2. DUTIES.
(a) DUTIES AS EMPLOYEE OF THE COMPANY. Executive shall, subject
to the supervision of the Chief Executive Officer of the Company and
the Executive Management Committee of HCC ("Executive Committee"),
have such powers with respect to such management and control as may be
reasonably incident to the responsibilities incident to Executive's
title. During normal business hours, Executive shall devote his full
time and attention to diligently attending to the business of the
Company. Executive shall not directly or indirectly render any
services of a business, commercial, or professional nature to any
other person, firm, corporation, or organization, whether for
compensation or otherwise, without the prior written consent of the
Chairman of the Board of HCC. However, Executive shall have the right
to engage in such activities as may be appropriate in order to manage
his personal investments so long as such activities do not materially
interfere or conflict with the performance of his duties to the
Company hereunder. The conduct of such activity shall not be deemed to
EMPLOYMENT AGREEMENT - PAGE 1
materially interfere or conflict with Executive's performance of his
duties until Executive has been notified in writing thereof and given
a reasonable period in which to cure the same.
(b) OTHER DUTIES. If elected, Executive agrees to serve on any
Committee of HCC and in one or more executive offices of any of HCC's
direct or indirect subsidiaries (the "Subsidiaries"), provided
Executive is indemnified for serving in any and all such capacities in
a manner acceptable to the Company and Executive. If elected,
Executive agrees that he shall not be entitled to receive any
compensation for serving in any capacity for the Subsidiaries other
than the compensation to be paid to Executive by the Company pursuant
to this Agreement.
3. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. Executive shall receive a base salary paid by
the Company at the annual rate of $170,000, during the period
beginning on the Effective Date payable not less frequently than in
substantially equal monthly installments. Such base salary shall be
increased to the annual rate of $195,000 for the year 2002 and
$220,000 for the year 2003.
(b) BONUS PAYMENTS. Except as set forth herein, Executive shall
have no claim of right to any bonus: all such bonuses being in the
sole and absolute discretion of HCC.
(c) STOCK OPTIONS. Except as set forth herein, Executive shall
have no claim of right to any options to purchase stock of the
Company: all options to purchase stock of HCC being granted in the
sole and absolute discretion of HCC and subject to the Executive's
execution of option agreements in a form acceptable to the Executive
Committee.
(d) EXPENSES. During the Basic Term, Executive shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred
by him in accordance with the policies and procedures established by
the Executive Committee for the Company's senior executive officers in
performing services hereunder, provided that Executive properly
accounts therefor in accordance with the policies of the Company.
(e) OTHER BENEFITS. Executive shall be entitled to participate in
or receive benefits under any compensatory employee benefit plan or
other arrangement made generally available by the Company now or in
the future to its employees, subject to and on a basis consistent with
the terms, conditions, and overall administration of such plan or
arrangement. Nothing paid to Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to
be in lieu of the Base Salary payable to Executive pursuant to
Paragraph (a) of this Section. The Company shall not make any changes
in any employee benefit plans or other arrangements in effect on the
date hereof or subsequently in effect in which Executive currently or
in the future participates (including, without limitation, each
pension and retirement plan, supplemental pension and retirement plan,
savings and profit sharing plan, stock or unit ownership plan, stock
or unit purchase plan, stock or unit
EMPLOYMENT AGREEMENT - PAGE 2
option plan, life insurance plan, medical insurance plan, disability
plan, dental plan, health and accident plan, or any other similar plan
or arrangement) that would adversely affect Executive's rights or
benefits thereunder, unless such change occurs pursuant to a program
applicable to substantially all employees of HCC.
(f) VACATIONS. Executive shall be entitled to fifteen (15) days
paid vacation per year during the Basic Term. There shall be no
carryover of unused vacation from year to year. For purposes of this
Paragraph, weekends shall not count as vacation days, and Executive
shall also be entitled to all paid holidays and personal days given by
the Company to its senior executive officers.
(g) PERQUISITES. Executive shall be entitled to receive the
perquisites and fringe benefits appertaining to an executive officer
of the Company in accordance with any practice established by the HCC
Executive Committee.
(h) PRORATION. Any payments or benefits payable to Executive
hereunder in respect of any calendar year during which Executive is
employed by the Company for less than the entire year, unless
otherwise provided in the applicable plan or arrangement, shall be
prorated in accordance with the number of days in such calendar year
during which he is so employed.
4. TERMINATION.
(a) DEFINITIONS.
(1) "CAUSE" shall mean:
(i) Material dishonesty which is not the result of an
inadvertent or innocent mistake of Executive with respect to
the Company or any of its affiliates or Subsidiaries;
(ii) Willful misfeasance or nonfeasance of duty by
Executive intended to injure or having the effect of
injuring in some material fashion the reputation, business,
or business relationships of the Company or any of its
affiliates or Subsidiaries or any of their respective
officers, directors, or employees;
(iii) Material violation by Executive of any material
term of this Agreement; or
(iv) Conviction of Executive of any felony, any crime
involving moral turpitude or any crime other than a
vehicular offense which could reflect in some material
fashion unfavorably upon the Company or any of its
affiliates or Subsidiaries.
EMPLOYMENT AGREEMENT - PAGE 3
Executive may not be terminated for Cause unless and until there
has been delivered to Executive written notice from HCC's
Executive Committee, supplying the particulars of Executive's
acts or omissions that the Executive Committee, believes
constitute Cause, a reasonable period of time (not less than 30
days) has been given to Executive after such notice to either
cure the same or to meet with the Executive Committee, on behalf
of the Board, with his attorney if so desired by Executive, and
following, which the Executive Committee, on behalf of the Board,
by action of not less than two-thirds of its members furnishes to
Executive a written resolution specifying in detail its findings
that Executive has been terminated for Cause as of the date set
forth in the notice to Executive.
(2) A "DISABILITY" shall mean the absence of Executive from
Executive's duties with the Company on a full-time basis for 180
consecutive days, or 180 days in a 365-day period, as a result of
incapacity due to mental or physical illness which results in the
Executive being unable to perform the essential functions of his
position, with or without reasonable accommodation.
(3) A "GOOD REASON" shall mean any of the following (without
Executive's express written consent):
(i) A failure by HCC to continue in effect any employee
benefit plan in which Executive was participating, or the
taking of any action by HCC that would adversely affect
Executive's participation in, or materially reduce
Executive's benefits under, any such employee benefit plan,
unless such failure or such taking of any action adversely
affects the employees of HCC generally to the same extent;
(ii) Any material breach by the Company of any
provision of this Agreement.
(iii) Following a Change of Control, but only if within
180 days after such Change of Control, there is a material
alteration in the nature and status of Executive's title,
duties or responsibilities, or the assignment of duties or
responsibilities inconsistent with Executive's status,
title, duties and responsibilities;
(iv) A relocation of the Company's principal executive
offices, or of Executive's relocation to any place other
than the principal executive offices, exceeding a distance
of fifty (50) miles from the Company's current executive
office located in Houston, Texas, except for reasonably
required travel by Executive on the Company's business; and
(v) Any failure by the Company to obtain the assumption
and performance of this Agreement by any successor (by
merger, consolidation, or otherwise) or assign of the
Company.
EMPLOYMENT AGREEMENT - PAGE 4
However, Good Reason shall exist with respect to an above
specified matter only if such matter is not corrected by HCC
within thirty (30) days of its receipt of written notice of
such matter from Executive, and in no event shall a
termination by Executive occurring more than one hundred
eighty (180) days following the date of the event described
above or in the case of a Change of Control, 180 days
following the Change of Control be a termination for Good
Reason due to such event.
(4) "TERMINATION DATE" shall mean the date Executive is
terminated for any reason pursuant to this Agreement.
(5) A "CHANGE OF CONTROL" shall be deemed to have occurred
if:
(i) Any "person" or "group" (within the meaning of
Sections 13(d) and 24(d)(2) of the Securities Exchange Act
of 1934) other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company
becomes the "beneficial owner" (as defined in Rule l3d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of 50% or more of the Company's then outstanding
voting common stock; or
(ii) At any time during the period of three (3)
consecutive years (not including any period prior to the
date hereof), individuals who at the beginning of such
period constituted the Board (and any new director whose
election by the Board or whose nomination for election by
the Company's shareholders were approved by a vote of at
least two-thirds of the directors then still in office who
either were directors at the beginning of such period or
whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority
thereof; or
(iii) The shareholders of the Company approve a merger
or consolidation of the Company with any other corporation,
other than a merger or consolidation (a) in which a majority
of the directors of the surviving entity were directors of
the Company prior to such consolidation or merger, and (b)
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
changed into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting
securities of the surviving entity outstanding immediately
after such merger or consolidation; or
(iv) The shareholders approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of
the Company's assets.
EMPLOYMENT AGREEMENT - PAGE 5
(b) TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON:
BENEFITS. In the event there is a termination by the Company without Cause,
or if Executive terminates for Good Reason (a "Termination Event"), this
Agreement shall terminate, and Executive shall be entitled to the following
severance benefits:
(1) For the a period after the Termination Date and for the
remainder of the Basic Term, Base Salary (as defined in Paragraph
3(a)), at the rate, and payable quarterly as Executive was being paid
on the Termination Date.
(2) If, after a Change of Control, as defined herein, within 180
days of such Change of Control, there is a termination by the Company
without Cause or by Executive for Good Reason, any stock options and
other stock-related grants ("Stock Awards") which Executive has
received under any of the HCC stock plans shall vest immediately and
shall be exercisable for thirty (30) days from the date of such
Termination Event or the remainder of their term, whichever is less.
(3) All accrued compensation and unreimbursed expenses through
the Termination Date. Such amounts shall be paid to Executive in a
lump sum in cash within thirty (30) business days after the
Termination Date; and
(4) Executive shall be free to accept other employment during
such period, and there shall be no offset of any compensation earned
by Executive from such other employment during such period against
payments due Executive under this Section 4.
(c) TERMINATION IN EVENT OF DEATH: BENEFITS. If Executive's employment
is terminated by reason of Executive's death during the Basic Term, this
Agreement shall terminate, without further obligation to Executive's legal
representatives under this Agreement, other than for payment of all accrued
compensation, unreimbursed expenses, and the timely payment or provision of
Other Benefits through the date of death. Such amounts shall be paid to
Executive's estate or beneficiary, as applicable, in a lump sum in cash
within ninety (90) business days after the date of death. Additionally,
Executive's estate or beneficiary shall be vested in such Stock Awards as
Executive held of the date of Executive's death.
(d) TERMINATION IN EVENT OF DISABILITY: BENEFITS. If Executive's
employment is terminated by reason of Executive's Disability during the
Basic Term, this Agreement shall continue in full force for a period of
sixty (60) days following such Disability.
(e) VOLUNTARY TERMINATION BY EMPLOYEE AND TERMINATION FOR CAUSE:
BENEFITS. Executive may terminate his employment with the Company without
Good Reason by giving written notice of his intent and stating an effective
Termination Date at least ninety (90) days after the date of such notice;
provided, however, that the Company may accelerate such effective date by
paying Executive through the proposed Termination Date and also vesting
awards that would have vested but for the acceleration of the proposed
Termination Date. Upon such a termination by Executive or upon
EMPLOYMENT AGREEMENT - PAGE 6
termination for Cause by the Company, this Agreement shall terminate and
the Company shall pay to Executive all accrued compensation and
unreimbursed expenses through the Termination Date. Such amounts shall be
paid to Executive in a lump sum in cash within sixty (60) business days
after the date of termination. In addition, all unvested options shall
terminate and all vested options shall terminate thirty (30) days after the
Termination Date.
(f) DIRECTOR POSITIONS. Executive agrees that upon termination of
employment, for any reason, at the request of the Executive Committee of
the Company, he will immediately tender his resignation from any and all
Board of Director positions held with the Company and/or any of its
Subsidiaries and affiliates.
5. NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY. Executive
recognizes and agrees that the benefit of not being employed at-will, is
provided in consideration for, among other things, the agreements contained in
this Section. The Company agrees that while employed pursuant to this Agreement,
Executive will be provided with confidential information of Company, specialized
training on how to perform his duties and contact with the Company's customers
and potential customers.
In consideration of all of the foregoing, Executive agrees as follows:
(a) NON-COMPETITION DURING EMPLOYMENT. Executive agrees that while
employed by the Company, he will not compete with the Company or its
affiliates by engaging in the conception, design, development, production,
marketing, or servicing of any product or service that is substantially
similar to the products or services which the Company or its affiliates
provide, and that he will not work for, in any capacity, assist, or become
affiliated with as an owner, partner, etc., either directly or indirectly,
any individual or business which offers or performs services, or offers or
provides products substantially similar to the services and products
provided by Company or its affiliates.
(b) CONFLICTS OF INTEREST. Executive agrees that while employed by the
Company, he will not engage, either directly or indirectly, in any activity
(a "Conflict of Interest") which might adversely affect the Company or its
affiliates and Subsidiaries, including ownership of a material interest in
any supplier, contractor, distributor, subcontractor, customer or other
entity with which the Company or its affiliates and Subsidiaries does
business or accepting any material payment, service, loan, gift, trip,
entertainment, or other favor from a supplier, contractor, distributor,
subcontractor, customer or other entity with which the Company or its
affiliates or Subsidiaries does business, and that Executive will promptly
inform the President of the Company as to each offer received by Executive
to engage in any such activity. Executive further agrees to disclose to the
Company any other facts of which Executive becomes aware which might in
Executive's good faith judgment reasonably be expected to involve or give
rise to a Conflict of Interest or potential Conflict of Interest.
(c) NON-COMPETITION AFTER TERMINATION. Executive agrees that, at any
time during the period of two (2) years after the termination of his
employment with the
EMPLOYMENT AGREEMENT - PAGE 7
Company and any of its affiliates and Subsidiaries, he shall not for any
reason, within any of the markets in which the Company or its affiliates
has sold products or services or formulated a plan to sell products or
services into a market during the last twelve (12) months of Executive's
employment or which the Company or its affiliates enters into within three
(3) months thereafter, engage in or contribute Executive's knowledge to any
work which is competitive with or similar to a product, process, apparatus,
service, or development on which Executive worked or with respect to which
Executive had access to Confidential Information while employed by the
Company. Following the expiration of said two (2) year period, Executive
shall continue to be obligated under the Confidential Information paragraph
of this Agreement not to use or to disclose Confidential Information of the
Company or its affiliates and Subsidiaries so long as it shall not be
publicly available. It is understood that the geographical area set forth
in this covenant is divisible so that if this clause is invalid or
unenforceable in an included geographic area, that area is severable and
the clause remains in effect for the remaining included geographic areas in
which the clause is valid.
(d) NON-SOLICITATION OF CUSTOMERS. Executive further agrees that for a
period of two (2) years after the termination of his employment with the
Company and any of its affiliates and Subsidiaries, he will not solicit or
accept any business from any customer or client or prospective customer or
client with whom Executive dealt or solicited while employed by Company
during the last twelve (12) months of his employment.
(e) NON-SOLICITATION OF EMPLOYEES. Executive agrees that for a period
of two (2) years after the termination of his employment with the Company
and any of its affiliates and Subsidiaries, he will not either directly or
indirectly, on his own behalf or on behalf of others, solicit, attempt to
hire, or hire any person employed by Company to work for Executive or for
another entity, firm, corporation, or individual.
(f) CONFIDENTIAL INFORMATION. Executive further agrees that he will
not, except as the Company may otherwise consent or direct in writing,
reveal or disclose, sell, use, lecture upon, publish or otherwise disclose
to any third party any Confidential Information or proprietary information
of the Company or its affiliates and Subsidiaries, or authorize anyone else
to do these things at any time either during or subsequent to his
employment with the Company. This Paragraph shall continue in full force
and effect after termination of Executive's employment and after the
termination of this Agreement. Executive's obligations under this Paragraph
with respect to any specific Confidential Information and proprietary
information shall cease when that specific portion of the Confidential
Information and proprietary information becomes publicly known, in its
entirety and without combining portions of such information obtained
separately. It is understood that such Confidential Information and
proprietary information of the Company and its affiliates and Subsidiaries
include matters that Executive conceives or develops, as well as matters
Executive learns from other employees of Company or its affiliates and
Subsidiaries. Confidential Information is defined to include information:
(1) disclosed to or known by the Executive as a consequence of or through
his employment with the Company; (2) not generally known outside the
Company and its affiliates and Subsidiaries; and (3) which relates to any
aspect of the Company and its
EMPLOYMENT AGREEMENT - PAGE 8
affiliates or their business, finances, operation plans, budgets, research,
or strategic development. "Confidential Information" includes, but is not
limited to the Company's and its affiliates' and Subsidiaries' trade
secrets, proprietary information, financial documents, long range plans,
customer lists, employer compensation, marketing strategy, data bases,
costing data, computer software developed by the Company or its affiliates,
investments made by the Company or its affiliates, and any information
provided to the Company or its affiliates by a third party under
restrictions against disclosure or use by the Company or others.
(g) RETURN OF DOCUMENTS, EQUIPMENT, ETC. All writings, records, and
other documents and things comprising, containing, describing, discussing,
explaining, or evidencing any Confidential Information, and all equipment,
components, parts, tools, and the like in Executive's custody or possession
that have been obtained or prepared in the course of Executive's employment
with the Company shall be the exclusive property of the Company, shall not
be copied and/or removed from the premises of the Company, except in
pursuit of the business of the Company, and shall be delivered to the
Company, without Executive retaining any copies, upon notification of the
termination of Executive's employment or at any other time requested by the
Company. The Company shall have the right to retain, access, and inspect
all property of Executive of any kind in the office, work area, and on the
premises of the Company upon termination of Executive's employment and at
any time during employment by the Company to ensure compliance with the
terms of this Agreement.
(h) REAFFIRM OBLIGATIONS. Upon termination of his employment with the
Company, Executive, if requested by Company, shall reaffirm in writing
Executive's recognition of the importance of maintaining the
confidentiality of the Company's Confidential Information and proprietary
information, and reaffirm any other obligations set forth in this
Agreement.
(i) PRIOR DISCLOSURE. Executive represents and warrants that he has
not used or disclosed any Confidential Information he may have obtained
from Company or its affiliates prior to signing this Agreement, in any way
inconsistent with the provisions of this Agreement.
(j) CONFIDENTIAL INFORMATION OF PRIOR COMPANIES. Executive will not
disclose or use during the period of his employment with the Company any
proprietary or Confidential Information or Copyright Works which Executive
may have acquired because of employment with an employer other than the
Company or acquired from any other third party, whether such information is
in Executive's memory or embodied in a writing or other physical form.
(k) BREACH. Executive agrees that any breach of Paragraphs 5(a), (c),
(d), (e) or above cannot be remedied solely by money damages, and that in
addition to any other remedies Company or its affiliates may have, the
Company shall be entitled to obtain injunctive relief against Executive.
Nothing herein, however, shall be construed as limiting the Company's right
to pursue any other available remedy at law or in equity,
EMPLOYMENT AGREEMENT - PAGE 9
including recovery of damages and termination of this Agreement and/or any
payments that may be due pursuant to this Agreement.
(l) RIGHT TO ENTER AGREEMENT. Executive represents and covenants to
the Company that he has full power and authority to enter into this
Agreement and that the execution of this Agreement will not breach or
constitute a default of any other agreement or contract to which he is a
party or by which he is bound.
(m) EXTENSION OF POST-EMPLOYMENT RESTRICTIONS. In the event Executive
breaches Paragraphs 5(b), (d), or (e) above, the restrictive time periods
contained in those provisions will be extended by the period of time
Executive was in violation of such provisions.
(n) ENFORCEABILITY. The agreements contained in Section 5 are
independent of the other agreements contained herein. Accordingly, failure
of the Company to comply with any of its obligations outside of this
Paragraph do not excuse Executive from complying with the agreements
contained herein.
(o) SURVIVABILITY. The agreements contained in Paragraphs 5(c) through
(g) shall survive the termination of this Agreement for any reason.
6. ASSIGNMENT. This Agreement cannot be assigned by Executive. The
Company may assign this Agreement only to a successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and assets of the Company provided such
successor expressly agrees in writing reasonably satisfactory to Executive to
assume and 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 and assignment
had taken place. Failure of the Company to obtain such written agreement prior
to the effectiveness of any such succession shall be a material breach of this
Agreement.
7. BINDING AGREEMENT. Executive understands that his obligations under
this Agreement are binding upon Executive's heirs, successors, personal
representatives, and legal representatives.
8. NOTICES. All notices pursuant to this Agreement shall be in writing
and sent certified mail, return receipt requested, addressed as set forth below,
or by delivering the same in person to such party, or by transmission by
facsimile to the number set forth below. Notice deposited in the United States
Mail, mailed in the manner described hereinabove, shall be effective upon
deposit. Notice given in any other manner shall be effective only if and when
received:
If to Executive: Xxxxxxxxxxx X. Xxxxxx, Esq.
----------------------------
----------------------------
----------------------------
EMPLOYMENT AGREEMENT - PAGE 10
If to Company: HCC Insurance Holdings, Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
with a copy (which shall Xxxxxx X. Xxxxxx, Esq.
not constitute notice) to: Xxxxxx and Xxxxx, LLP
0000 Xxxxxxxxx, xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
9. WAIVER. No waiver by either party to this Agreement of any right to
enforce any term or condition of this Agreement, or of any breach hereof, shall
be deemed a waiver of such right in the future or of any other right or remedy
available under this Agreement.
10. SEVERABILITY. If any provision of this Agreement is determined to
be void, invalid, unenforceable, or against public policy, such provisions shall
be deemed severable from the Agreement, and the remaining provisions of the
Agreement will remain unaffected and in full force and effect.
11. ARBITRATION. In the event any dispute arises out of Executive's
employment with or by the Company, or separation/termination therefrom, whether
as an employee or as a consultant, which cannot be resolved by the Parties to
this Agreement, such dispute shall be submitted to final and binding
arbitration. The arbitration shall be conducted in accordance with the National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association ("AAA"). If the Parties cannot agree on an arbitrator, a list of
seven (7) arbitrators will be requested from AAA, and the arbitrator will be
selected using alternate strikes with Executive striking first. The cost of the
arbitration will be shared equally by Executive and Company. Arbitration of such
disputes is mandatory and in lieu of any and all civil causes of action and
lawsuits either party may have against the other arising out of Executive's
employment with Company, or separation therefrom. Such arbitration shall be held
in Houston, Texas.
12. ENTIRE AGREEMENT. The terms and provisions contained herein shall
constitute the entire agreement between the parties with respect to Executive's
employment with Company during the time period covered by this Agreement. this
Agreement replaces and supersedes any and all existing, Agreements entered into
between Executive and the Company relating generally to the same subject matter,
if any, and shall be binding upon Executive's heirs, executors, administrators,
or other legal representatives or assigns.
13. MODIFICATION OF AGREEMENT. this Agreement may not be changed or
modified or released or discharged or abandoned or otherwise terminated, in
whole or in part, except by an instrument in writing signed by the Executive and
an officer or other authorized executive of Company.
14. UNDERSTAND AGREEMENT. Executive represents and warrants that he has
read and understood each and every provision of this Agreement, and Executive
understands that he has
EMPLOYMENT AGREEMENT - PAGE 11
the right to obtain advice from legal counsel of choice, if necessary and
desired, in order to interpret any and all provisions of this Agreement, and
that Executive has freely and voluntarily entered into this Agreement.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (irrespective of its choice of
law principles).
16. JURISDICTION AND VENUE. With respect to any litigation regarding
this Agreement, Executive agrees to venue in the state or federal courts in
Xxxxxx County, Texas, and agrees to waive and does hereby waive any defenses
and/or arguments based upon improper venue and/or lack of personal jurisdiction.
By entering into this Agreement, Executive agrees to personal jurisdiction in
the state and federal courts in Xxxxxx County, Texas.
[SIGNATURE PAGE FOLLOWS]
EMPLOYMENT AGREEMENT - PAGE 12
IN WITNESS WHEREOF, the Parties have executed this Agreement in
multiple copies, effective as of the date first written above.
EXECUTIVE COMPANY
HCC INSURANCE HOLDINGS, INC.
Name: /s/XXXXXXXXXXX X. XXXXXX
----------------------------
Xxxxxxxxxxx X. Xxxxxx By: /s/ XXXXXXX X. WAY
--------------------------------
Xxxxxxx X. Way
Chairman
Dated: 10/03/00 Dated: 10/03/00
------------------------------ ------------------------------
EMPLOYMENT AGREEMENT - PAGE 13
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
This AMENDMENT NO. 1 (the "Amendment") is entered into as of the 1st
day of January, 2002 (the "Effective Date") between HCC Insurance Holdings, Inc.
(the "Company" or "HCC") and Xxxxxxxxxxx X. Xxxxxx ("Executive"), sometimes
collectively referred to herein as (the "Parties")
RECITALS:
WHEREAS, Executive has entered into an Employment Agreement dated as of
the 1st day of October, 2000; and
WHEREAS, it is the desire of the Company and the Executive to amend the
Employment Agreement as set forth below;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the Parties agree as follows:
1. In addition to any perquisites to which Executive is otherwise
entitled pursuant to the Employment Agreement, effective as of the Effective
Date, as set forth in the Amendment, Executive shall be entitled to a car
allowance in the amount of $750 per month. In addition, Executive shall receive
a corporate membership at The Houstonian. Dues for such membership shall be paid
by the Company.
2. The definition of "Change of Control" set forth in Paragraph 4(a)(5)
shall be amended by deleting in its entirety subparagraph (ii).
3. The provisions of Paragraphs (4)(c) and 4(d) shall be deleted in
their entirety and replaced with the following:
(c) TERMINATION IN EVENT OF DEATH: BENEFITS. If Executive's
employment is terminated by reason of Executive's death during the Basic Term,
this Agreement shall terminate without further obligation to Executive's legal
representatives under this Agreement, other than for payment of all accrued
compensation, unreimbursed expenses, the timely payment or provision of Other
Benefits through the date of death. Such amounts shall be paid to Executive's
estate or beneficiary, as applicable, in a lump sum in cash within ninety (90)
days after the date of death. In addition, Executive's legal representatives
shall receive, at the same time as if Executive were still an employee,
Executive's Base Salary for the lesser of one (1) year or the date this
Agreement would otherwise have terminated. With respect to the provision of
Other Benefits, the term Other Benefits as used in this Paragraph 4(c) shall
include, without limitation, and Executive's estate and/or beneficiaries shall
be entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company to the estates and beneficiaries of other
EMPLOYMENT AGREEMENT - PAGE 14
executive level employees of the Company under such plans, programs, practices,
and policies relating to death benefits, if any, as in effect with respect to
other executives and their beneficiaries at any time during the 120-day period
immediately preceding the date of death. Additionally, all Stock Awards shall be
vested immediately and shall be exercisable for the later of one year after the
date of such vesting or the remaining term of such option.
(d) TERMINATION IN EVENT OF DISABILITY: BENEFITS. If
Executive's employment is terminated by reason of Executive's Disability during
the Basic Term, this Agreement shall terminate but the Company shall continue to
pay the Base Salary for a period of three (3) months and thereafter shall make
such additional payment for the Term so that the after tax effect of Executive's
compensation is the same as before the Disability. Executive shall, not be
entitled to any subsequent cash or stock bonuses. In addition, all outstanding
Stock Awards shall vest immediately upon such termination due to Disability and
shall be exercisable for one year after the date of such vesting. Executive's
Benefits shall continue to the end of the Basic Term.
Except as set forth herein, the terms of the Employment Agreement,
shall remain in full force and effect.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
EMPLOYMENT AGREEMENT - PAGE 15
IN WITNESS WHEREOF, the Parties have executed this Agreement in
multiple copies, effective as of the Effective Date.
EXECUTIVE COMPANY
HCC Insurance Holdings, Inc.
/s/ XXXXXXXXXXX X. XXXXXX By: /s/ XXXX X. XXXXXXX
-------------------------------- --------------------------------
Xxxxxxxxxxx X. Xxxxxx Xxxx X. Xxxxxxx,
President
Dated: January 21, 2002 Dated: January 21, 2002
------------------------------ ------------------------------
[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]
EMPLOYMENT AGREEMENT - PAGE 16
