EXHIBIT 10.6
EMPLOYMENT AGREEMENT
AGREEMENT made effective as of the 1st March 1999, between ESG Re Limited, a
Bermuda company (the "Company"), and it various subsidiaries and Xxxxxxxx X
Xxxxxxx ("Executive").
WHEREAS, the Company wishes to retain the services of the Executive and
recognises that the Executive's contribution to the growth and success of the
Company will be substantial; and
WHEREAS, the Executive is willing to commit to serve the Company, on the terms
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 promises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree to 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 six months prior to
the commencement of the next scheduled one year extension.
3. POSITION AND DUTIES
(a) TITLE AND DUTIES
The Executive shall serve as the Chief Administrative Officer of
the Company and shall have such duties, authority and
responsibilities as are referenced in Exhibit A as attached to this
Agreement. The Executive shall report directly to the Chief
Financial Officer of the Company. The Executive shall devote
substantially all of Executive's 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 organisation or
chamber of commerce without the written consent of the Company.
(b) OFFICE AND FACILITIES
The Executive shall be provided with appropriate office and support
facilities at the Company's offices in Dublin, Ireland in order for
the Executive to perform Executive's duties to the Company. The
Executive shall serve as an 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$180,000. The Executive's base salary shall be
paid in substantially equal installments 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 100% of
the Base Salary in US Dollars, Euros or Irish Pounds.
(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.
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, a pension plan, perquisite and fringe benefit
arrangements of the Company made available by the Company to its
senior executives, subject to, and on the 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 it Affiliates (defined
in this Agreement as any company which the Company has a majority
share of) 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
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 EQUALISATION
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 during the Term for any reason:-
(a) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE FOR
GOOD REASON
If the Company shall terminate the Executive's employment without
"Cause" (as defined in Section 6(f)(i)(1-6), or if the Executive
resigns for Good Reason (as defined in Section 6(f)(iv) then, the
Executive shall be entitled to his Base Salary at the time of the
termination for the greater of (1) the remainder of the Term, or
(2) one year, subject to and conditioned upon the Executive's
compliance with Section 8 hereof. Options held by the Executive
will be treated as provided for in the applicable Award Agreement.
In addition, the Company would provide the Executive the same
relocation benefits as Executive had when Executive moved to
Ireland to take up the appointment (Reasonable Relocation Costs),
for a move back to the United States for the Executive and family.
Except for the obligations listed in the initial letter of offer,
any subsequent legal document, other Agreements or benefits plans
and as expressly provided above, the Company and the Executive will
have no further obligations to each other hereunder following the
Executive's termination of employment under the circumstances
described in this Section 6(a), (other than those under Section 8
of this Agreement "Confidentiality").
(b) TERMINATION DUE TO NON-RENEWAL OF THE TERM OR DEATH OR DISABILITY
If the Executive's employment is terminated due to a Non-Renewal of
the Term by either party to this Agreement 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 Executive and family.
Except for the obligations listed in the initial letter of offer,
any subsequent legal document, other Agreements or benefit plans
and as expressly provided above, the Company and the Executive will
have no further obligations to each other hereunder following the
Executive's termination of employment under the circumstances
described in this Section 6(b), (other than those under Section 8
of this Agreement "Confidentiality").
(c) TERMINATION BY THE COMPANY FOR CAUSE OR 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 his 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 and in the initial offer letter,
any subsequent legal document, other Agreements or benefit plans,
the Company and the Executive will have no further obligations to
each other hereunder following the Executive's termination of
employment under the circumstances described in this Section 6(c),
other than those under Section 8 of this Agreement
"Confidentiality").
(d) TERMINATION WITHIN ONE YEAR OF A CHANGE IN CONTROL
If the Company terminates the Executive's employment without Cause
or the Executive terminates employment for Good Reason within one
year following a Change in Control, the Executive shall be
entitled, in addition to the compensation otherwise payable and any
other obligations due upon his termination of employment pursuant
to Section 6(a) above, to a lump sum payment to which the Executive
is entitled 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 280G of the
US Internal Revenue Code of 1996, as amended (the "Code"); equals
2.99 times the Executive's "Base Amount" (as defined in Section
280G of the Code).
(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 as specified in 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 if applicable,
provided that the Executive shall have Sixty days to cure
the breach of any such material term from the date that
Executive is notified in writing by the Company of such a
breach.
(2) The Executive's failure or refusal to perform duties as
provided by Exhibit A hereunder or to perform specific
directives of the Company that are consistent with
Executive's position as Chief Administrative Officer of
the Company, provided that such directives do not violate
any applicable laws or Industry Standards and provided,
however, that the Executive shall have Sixty days to cure
such breach, failure or refusal to perform from the date
that Executive is notified in writing by the Company of
such occurrence;
(3) Intentional Dishonesty of the Executive which is the cause
of a material loss to the Company or any of its
Affiliates;
(4) Any gross or willful conduct of the Executive specifically
intended to cause substantial loss to or theft from the
Company or any of the Company's Affiliates;
(5) Alcoholism or Abuse of drugs or any controlled substances
which interferes with the performance of the Executive's
duties and responsibilities under this Agreement; or
(6) The Executive is convicted of a felony, whether or not
related to the business of the Company, including but not
limited to, any felony related to tax evasion, bribery,
theft, or political payoffs.
(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 a
majority of the assets of the Company other than to any of the
Company's 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 duties under this
Employment Agreement for a period of 180 consecutive days.
(iv) "Good Reason" shall include but not be limited to (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 using the position of Chief Administrative
Officer (2) a material reduction in Executive's Base Salary
amounting to at least 10%, (3) An intentional breach of any
applicable law, regulation or Industry Standard by the
Company, its various subsidiaries, Affiliates, agents or other
individuals or entities performing duties at the direction of
the Company including, without limitation the employees of the
entities listed above while acting in the scope of their
employment ("Related Parties") or the failure of the Company
to immediately cure a breach of any applicable law, regulation
or Industry Standard, upon becoming aware of such breach,
(4)failure of the Company to comply with any material
provision of this Agreement.
7. NON-COMPETITION
(a) The Executive acknowledges and recognises the highly competitive
nature of the business 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 for other
than Good Reason pursuant to Section 6(c) of this Agreement
(unless such termination of employment occurs within one year
following a Change in Control, in which case this paragraph
shall not be 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
directly 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 directly with the business of
the Company or the Company Affiliates, (iii) acquire a
majority financial interest in, or otherwise become actively
involved with, any person engaged in any business that
competes directly 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 (v) 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 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 of, 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 Company Affiliates or (ii) hire any such
employee who has left the employment of the Company or the
Company Affiliates to cease to work with the Company or the
Company Affiliates any consultant then under contract 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 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 employment
with the Company) disclose or use for Executive's own benefit or
purposes or the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation or other business
organisation, 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
alliliates 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 employment with the Company
for any reason, he 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 he may retain
personal notes, notebooks, diaries and reference materials. The
Executive further agrees that he will not retain or use for Executive's
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.
10. SUCCESSORS; BINDING AGREEMENT
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or a majority 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, distributes, devisees and legatees. If the
Executive should die while any amounts are payable to him
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:
Xxxxxxxx X. Xxxxxxx
c/o ESG Re Limited
00/00 Xxxxxxxx Xxxxx
XXXX
Xxxxxx 0
Xxxxxxx
If to the Company:
ESG Re Limited
00 Xxxxxx Xxxxxx
Xxxxxxxx, XX00
Xxxxxxx
Xxxxxxxxx: Chief Financial Officer
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 laws of Bermuda without regard to its conflicts of
law principles shall govern the validity, interpretation, construction
and performance of this Agreement.
13. VALIDITY
The invalidity or unenforceability of any 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 counterpart, 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 1st March 1999.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Executive has hereunto set his hand, effective as of the ____ day of
____ April 1999.
ESG Re Limited
By:
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Name:
Title:
Xxxxxxxx X. Xxxxxxx
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