EXHIBIT 10.6
SERVICE AGREEMENT
THIS AGREEMENT is made the 24th day of January 2002
BETWEEN:
MONTPELIER MARKETING SERVICES (UK) LIMITED, whose registered office is situate
at 0xx Xxxxx, 0 Xxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxx XX0X 0XX (the "Company");
and
XXXXXX XXXXXX STORY XXXXXX of 11, Salt Kettle Road, Paget Bermuda (the
"Executive").
WHEREAS the parties desire to record the terms and conditions upon which the
Executive is employed by the Company.
NOW THEREFORE in consideration of the mutual covenants and promises herein
contained
IT IS HEREBY AGREED as follows:
1. Interpretation
1.1. In this Agreement unless the context otherwise requires the following
words and expressions shall have the following meanings:
this "Agreement" means this service agreement and includes all
schedules hereto;
the "Bermudian Service Agreement" means the service agreement to be
entered into between Montpelier Re Holdings Limited, Montpelier
Reinsurance Limited and the Executive;
the "Board" means the board of directors of the Company;
the "Companies Act" means the Companies Xxx 0000;
"Group" means Montpelier Re Holdings Limited ("Holdings") and its
subsidiaries (as defined by the Companies Act) or any company in which
Holdings owns at least 50% of the issued share capital, and "Group
Company" shall be construed accordingly;
the "Parties" means the parties to this Agreement;
1.2. In this Agreement unless the context otherwise requires:
1.2.1. references to statutory provisions shall be construed as
references to those provisions as amended or re-enacted or as
their application is modified by other provisions from time to
time and shall include references to any provisions of which
they are re-enactments (whether with or without modification);
and
1.2.2. references to clauses and schedules are references to clauses
hereof and schedules hereto; references to sub-clauses or
paragraphs are, unless otherwise stated,
references to sub-clauses of the clause or paragraphs of the
schedule in which the reference appears;
1.2.3. references to the singular shall include the plural and vice
versa and references to the masculine shall include the
feminine and/or neuter and vice versa; and
1.2.4. references to persons shall include companies, partnerships,
associations and bodies of persons, whether incorporated or
unincorporated.
2. Appointment
2.1. The Company hereby appoints the Executive and the Executive hereby
agrees to serve the Company as its Operations Director subject to the
terms and conditions hereinafter contained.
3. Term
3.1. The appointment of the Executive hereunder shall (subject as
hereinafter provided) be for the period from the 1st day of January,
2002, unless and until terminated in accordance with the provisions
hereinafter contained.
4. Duties and Responsibilities
During the continuance of his employment hereunder:
4.1. The Executive shall perform such duties and exercise such powers in
relation to the business of the Company or of any Group Company as may
from time to time reasonably be assigned to or vested in him by the
Board. In particular, the Executive will ensure the smooth running of
the Company's marketing and promotional operations. The Executive shall
at no time engage in the following activities on behalf of any Group
Company:
(a) offer insurance to anyone;
(b) negotiate any terms of any insurance contracts;
(c) exercise discretion as to whether or not to refer risks to any
Group Company, but rather will refer all risks to the relevant
Group Company in the absence of explicit instructions to the
contrary;
(d) accept premiums;
(e) bind risks;
(f) negotiate and settle claims;
(g) receive notification of claims and instruct loss adjusters;
(h) determine underwriting strategy;
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(i) issue policy documentation to policyholders; and
(j) imply, directly or indirectly, to a third party that the
Company has authority to engage in any of the activities set
forth in (a) through (i) above.
The Executive shall give to the Board such information regarding the
affairs of the Company and any Group Company as it shall require and at
all times and in all respects conform to and comply with the reasonable
directions and regulations made by the Board. The Executive shall
perform such services for any Group Company (without further
remuneration except as otherwise agreed) and shall accept such offices
in any such Group Companies as the Board may reasonably require.
4.2. The Executive shall well and faithfully serve the Company and the Group
Companies and use his best endeavours to promote, develop and extend
their businesses and interests giving at all times the full benefit of
his knowledge, expertise, technical skill and ingenuity.
4.3. The Executive shall not without the consent of the Board directly or
indirectly engage in any other business or be concerned or interested
in any other business of a similar nature to or which would or might
compete with the business for the time being carried on by the Company
or any Group Company save that he may (but without prejudice to clause
4-2) be interested as a holder or beneficial owner of not more than 5%
of any class of stock, shares or debentures in any company (other than
the Company, in which case, such limit shall not apply) whose stock,
shares or debentures are listed or dealt in on a recognised stock
exchange (as defined in the Companies Act).
4.4. The Executive's principal place of employment is at 000 Xxxxxxxxx
Xxxxxx, Xxxxxx XX0 or such other address as may be established as the
Company's office.
4.5. The Executive shall carry out his duties under this Agreement in the
United Kingdom, and the Company reserves the right to require the
Executive to work at any location in London as the Company may in its
absolute discretion from time to time decide.
4.6. The Executive may be required to travel in the United Kingdom and
overseas (including Europe and the United States) in the proper
performance of his duties, although the Executive will not, without his
prior consent, be required to work any continuous period abroad in
excess of one month.
5. Renumeration and Reimbursement
5.1. The Company shall pay to the Executive by way of remuneration for his
services hereunder director's fees at the rate (subject as hereinafter
provided) of US$60,000 per annum to be paid installing at a rate to be
determined by the Board from time to time. The said fees shall be
payable by equal monthly instalments in arrears on the day appointed by
the Board for the payment of employees' salaries or pro rata where the
Executive is only employed hereunder during part of the month. The
Compensation Committee of the Board, subject to ratification by the
Board, may increase or reduce the
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Executive's fees on 31 December in each year, but not below an amount
of US$60,000 per annum.
5.2. The Executive shall be entitled to participate in:
(i) the Group's UK pension scheme [define]; the Company will make
a contribution equivalent to 10% of the Executive's fees into
such scheme.
(ii) Any other UK specific schemes in which the Executive is
entitled to participate;
in addition to any benefits to which he is entitled pursuant to the
Bermudian Service Agreement.
The details of these schemes are set out in separate documents, copies
of which will be provided on request. The schemes may be changed at the
Company's discretion.
5.3. The Company shall also pay to the Executive all reasonable travelling,
hotel and other out-of-pocket expenses which are properly incurred by
him in or about the performance of his duties hereunder and for which
vouchers (if so required) are provided to the reasonable satisfaction
of the Board.
5.4. The Executive agrees that the Company may deduct from his pay any sums
which the Executive may owe the Company including, without limitation,
any overpayments or loans made to him by the Company or losses suffered
by the Company as a result of the Executive's breach of this Agreement.
6. Normal Hours and Holidays
The Executive shall conform to such hours of work as may from time to
time reasonably be required of him and shall not be entitled to receive
any additional remuneration for work outside his normal hours. The
Executive agrees that any cap on the average working time imposed by
the Working Time Regulations 1998 will not apply to him. In addition to
the usual public holidays the Executive shall be entitled without loss
of remuneration to 25 days holiday in each year, but such days shall be
inclusive of, and not in addition to, holidays to which the Executive
is entitled pursuant to the Bermudian Service Agreement.
7. Confidentiality
7.1. The Executive shall not either during the continuance of his employment
hereunder (otherwise than in the proper performance of his duties
hereunder) or at any time after the determination thereof divulge to
any person whomsoever and shall use his reasonable endeavours to
prevent the publication or disclosure of any trade secret or other
confidential information concerning the business, finances, accounts,
dealings, transactions or affairs of the Company or any Group Company
or of any of their respective clients entrusted to him or arising or
coming to his knowledge during the course of his employment hereunder
or otherwise.
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7.2. The Executive shall upon the termination of his employment hereunder
immediately deliver up to the Company all fee schedules, lists of
clients, correspondence and other documents, papers and property
belonging to the Company or any Group Company or related to any of the
matters referred to in clause 7.1 which may have been prepared by him
or have come into his possession in the course of his employment
hereunder and shall not retain any copies thereof.
8. Change of Status
8.1. If, before the expiration or determination of this Agreement, the
employment of the Executive hereunder shall be terminated by reason of
the liquidation of the Company for the purpose of reconstruction or
amalgamation and he shall be offered employment with any concern or
undertaking resulting from such reconstruction or amalgamation on terms
and conditions not less favourable (financially and in personal status)
than the terms of this Agreement, then he shall have no claim against
the Company in respect of the termination of his employment hereunder
save in respect of accrued benefits.
8.2. If for any reason the Executive shall either:
8.2.1. at the Company's request resign as a director of the Company
or any Group Company; or
8.2.2. be removed from office as a director of the Company or any
Group Company;
then, notwithstanding his so ceasing to be a director, this Agreement
shall not automatically terminate and thereupon (and without any claim
against the Company in respect of such loss of office) the Executive's
employment hereunder shall continue for the remaining period of this
Agreement and all the terms and conditions of this Agreement shall with
the necessary variations apply to the Executive's employment but in any
event, the Executive's basic annual remuneration will not at any time
be less than US$60,000 per annum.
9. Termination
9.1. This Agreement shall terminate automatically upon termination of the
Bermudian Service Agreement. Furthermore, without prejudice to clauses
9.3 or 9.5, the Executive's employment may be terminated:
9.1.1. by the Company giving to the Executive not less than 12
months' written notice; or
9.1.2. by the Executive giving to the Company not less than 6 months'
written notice.
9.2. Without prejudice to its rights to terminate the Executive's employment
under clause 9.1 or its rights to suspend the Executive, the Company
may at its sole discretion terminate the Executive's employment with
immediate effect at any time and whether or not notice has been given
by either party to terminate the Executive's employment by giving
notice in writing to the Executive and if it does so the Company shall
pay the Executive within
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five business days of the Termination Date, in lieu of notice under
clause 9.1, a lump sum equal to the salary in the amount it would have
paid to the Executive if the Executive's employment had terminated in
accordance with clause 9.1.
9.3. This Agreement shall be subject to termination by the Company by
summary notice in writing without pay in lieu of notice:
9.3.1. if the Executive shall become of unsound mind or be or become
a patient for the purpose of any statute relating to mental
health;
9.3.2. if the Executive shall at any time be prevented by illness or
accident from performing his duties for a period of 6
consecutive months or if he shall be absent from his duties by
reason of illness or accident for more than 180 working days
in any consecutive twelve months (provided that any such
periods may be extended at the sole discretion of the Board);
9.3.3. if the Executive terminates his employment, otherwise than in
accordance with the terms of clause 9.1.2 hereof, for any
reason prior to the expiration of this Agreement or if the
Executive shall have failed or neglected efficiently and
diligently to discharge his duties hereunder having received a
written warning for the misconduct within the previous 6
months or shall have committed any serious breach of his
obligations hereunder or shall have been guilty of conduct
tending to bring himself or the Company or any Group Company
into disrepute or calculated or likely to affect prejudicially
the interests of the Company or any Group Company or shall
have committed an act of bankruptcy or compounded with his
creditors generally.
9.4. The termination by the Company of this Agreement shall be without
prejudice to any claim which the Company may have for damages arising
from any breach thereof by the Executive giving rise to such
termination.
9.5. The normal retirement age for employees of the Company is 60 years of
age. The Executive's employment will terminate automatically without
notice on his 60th birthday.
9.6. This Agreement shall not, save as hereinbefore set out in this Clause,
be subject to termination by notice or otherwise by the Company or by
the Executive.
9.7. Until this Agreement is terminated pursuant to clause 9.3, the
Executive shall remain entitled to receive his remuneration payable
hereunder in full notwithstanding illness or other incapacity.
9.8. After notice of termination has been given by either party or if the
Executive seeks to resign without notice or by giving shorter notice
than that required under this Agreement then provided the Company
continues to pay the Executive the contractual benefits in accordance
with this Agreement, the Company has at its discretion the right for
the notice period or balance of the notice period (the "Garden Leave
Period") then outstanding until the termination date of this Agreement
to:
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9.8.1. exclude the Executive from the Company's premises and require
the Executive not to attend at the Company's premises; and/or
9.8.2. require the Executive to carry out no duties; and/or
9.8.3. require the Executive not to communicate or deal with
employees, agents, consultants, clients or other
representatives of the Company;
Provided always that the maximum permitted Garden Leave Period shall be
six months.
10. Consequence of Termination
10.1. Upon the termination of this Agreement howsoever arising, the Executive
shall at any time or from time to time thereafter upon the request of
the Company resign, without claim for compensation for loss of office,
as a director of the Company and such offices held by him in any of the
Group Companies as may be so requested and should he fail to do so, the
Company is hereby irrevocably authorised to appoint some person in his
name and on his behalf to sign and do any documents or things necessary
or requisite to give effect thereto.
11. Non-Competition
11.1. Since the Executive has obtained in the course of his employment prior
to the date hereof and is likely to obtain in the course of his
employment hereunder knowledge of the trade secrets and also other
confidential information in regard to the business of the Company and
of any Group Company with which he becomes associated, the Executive
hereby agrees with the Company that in addition to the restrictions
contained in clause 4.3 he will not:
11.1.1. during the period of 6 months following the termination of his
employment hereunder (howsoever caused) either on his own
account or for any other person, firm or company directly or
indirectly be engaged in or concerned with any business or
undertaking which is engaged in or carries on in the United
Kingdom any insurance business which competes or seeks to
compete with the marketing business carried on by the Company
or the reinsurance business carried out by any other Group
Company for which the Company is carrying out marketing and
promotional activities at the date of termination.
11.1.2. During the period of 6 months following the termination
aforesaid either on his own account or for any other person,
firm or company directly or indirectly solicit, interfere with
or endeavour to entice away from the Company or any Group
Company the custom for reinsurance business of any person,
firm or company who at the date of termination aforesaid or
who in the period of 12 months immediately prior to such date
was a customer or client of the Company or any Group Company
with whom the Executive was actively concerned or who at such
date was negotiating with the Executive in relation to all or
part of the Group's business.
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11.1.3. During the period of 12 months following the termination
aforesaid either on his own account or for any other person,
firm or company solicit the services of or endeavour to entice
away from the Company or any Group Company any director, or
executive of the Company or any Group Company with whom the
Executive was actively concerned (whether or not such person
would commit any breach of his contract of employment or
engagement by reason of leaving the service of such company)
nor shall the Executive knowingly employ or aid or assist in
or procure the employment by any other person, firm or company
of any such person.
11.2. While the restrictions aforesaid are considered by the Parties to be
reasonable in all the circumstances it is agreed that if any of such
restrictions shall, taken together, be adjudged to go beyond what is
reasonable in all the circumstances for the protection of the
legitimate interests of the Company or any Group Company but would be
adjudged reasonable if part of the wording thereof were deleted or
modified the said restrictions shall apply with such words deleted or
modified.
11.3. The Executive hereby agrees that he will at the request and cost of the
Company enter into a direct agreement or undertaking with any Group
Company whereby he will accept restrictions and provisions
corresponding to the restrictions and provisions herein contained (or
such of them as may be appropriate in the circumstances) in relation to
such services and such area and for such period as such company or
companies may reasonably require for the protection of its or their
legitimate interests provided that the terms of such restrictions and
provisions will not be more onerous than the restrictions and
provisions of this agreement.
12. Untrue Statements
The Executive shall not knowingly at any time make any untrue statement
in relation to the Company or any Group Company and in particular shall
not after the determination of his employment hereunder wrongfully
represent himself as being employed by or connected with the Company or
any Group Company.
13. Intellectual Property
13.1. The Executive may make, discover or create Intellectual Property in the
course of his duties under this Agreement and agrees that in this
respect he has a special obligation to further the interests of the
Company.
13.2. Subject to the provisions of the Patents Xxx 0000, the Registered
Designs Xxx 0000 and the Copyright Designs and Patents Xxx 0000 if at
any time during his employment under this Agreement the Executive makes
or discovers or participates in the making or discovery of any
Intellectual Property relating to or capable of being used in the
business for the time being carried on by the Company or any Group
Companies full details of the Intellectual Property shall immediately
be communicated by him t o the Company and shall be the absolute
property of the Company. At the request and expense of the Company the
Executive shall give and supply all such information data drawings and
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assistance as may be requisite to enable the Company to exploit the
Intellectual Property to the best advantage and shall execute all
documents and do all things which may be necessary or desirable for
obtaining patent or other protection for the Intellectual Property in
such parts of the world as may be specified by the Company and for
vesting the same in the Company or as it may direct.
13.3. The Executive irrevocably appoints the Company to be his agent in his
name and on his behalf to sign, execute or do any such instrument or
thing and generally to use his name for the purpose of giving to the
Company (or its nominee) the full benefit of the provisions of this
clause and in favour of any third party a certificate in writing signed
by any director or the secretary of the Company that any instrument or
act falls within the authority conferred by this clause shall be
conclusive evidence that such is the case.
13.4. If the Intellectual Property is not the property of the Company, the
Company shall, subject to the provisions of the Patents Xxx 0000, have
the right to acquire for itself or its nominee his rights in the
Intellectual Property within 3 months after disclosure pursuant to this
clause on fair and reasonable terms to be agreed or settled by a single
arbitrator.
13.5. The Executive waives all of his moral rights (as defined in the
Copyright, Designs and Patents Act 1988) in respect of any acts of the
Company or any acts of third parties done with the Company's authority
in relation to any Intellectual Property which is the property of the
Company by virtue of this clause.
13.6. Rights and obligations under this clause shall continue in force after
termination of this Agreement in respect of Intellectual Property made
during the Executive's employment under this Agreement and shall be
binding upon his representatives.
14. Discipline and Grievance Procedures
14.1. If the Executive has a grievance, regarding the employment, he should,
in the first instance speak to the Company's Chairman. If the grievance
is not resolved to his satisfaction, he should then refer to the
grievance procedure, which will be provided to him with his letter of
employment.
14.2. The disciplinary procedures applicable to the Executive will be
provided to him with his letter of employment.
14.3. The disciplinary and grievance procedures do not form part of this
Agreement.
15. Delegation
The Company may at any time and from time to time delegate its power
and authority under this Agreement to any Group Company and such
delegation (or the revocation thereof) shall be effective upon the
Company's giving written notice of the same to the Executive.
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16. Notices
Notices may be given by either Party by pre-paid first class post or by
hand delivery addressed to the other Party at (in the case of the
Company) its registered office for the time being and (in the case of
the Executive) his last known address. Any such notice given by post
shall be deemed to have been served on the second week day after
dispatch (public holidays excepted) and any notice so given by hand
shall be deemed to have been served when delivered if delivered during
normal business hours or, if delivered outside such hours, at the next
time after delivery when normal business hours commence.
17. Miscellaneous
17.1. The expiration or termination of this Agreement howsoever arising shall
not operate to affect such of the provisions hereof as are expressed or
intended to remain in full force and effect notwithstanding such
termination.
17.2. If any of the clauses, conditions, covenants or restrictions of this
Agreement or any deed or document emanating from it shall be found to
be void but would be valid if some part hereof were deleted or
modified, then such clause, condition, covenant or restriction shall
apply with such deletion or modification as may be necessary to make it
valid and effective.
17.3. This Agreement shall be binding and enure for the benefit of the
successors of the Parties but shall not be assignable.
17.4. This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the Parties relating to its
subject matter.
17.5. The headings in this Agreement are inserted for convenience only and
shall not affect the construction of this Agreement.
17.6. This Agreement may be executed in counterparts each of which when
executed and delivered shall constitute an original but all such
counterparts together shall constitute one and the same instrument.
17.7. No provision in this Agreement may be amended unless such amendment is
agreed to in writing, signed by the Executive and by a duly authorised
officer of the Company. No waiver by either Party of any breach by the
other Party of any condition or provision of this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or
subsequent tune. Any waiver must be in writing and signed by the
Executive or a duly authorised officer of the Company, as the case may
be.
17.8. This Agreement shall be governed by and construed in accordance with
the law of England and the Parties hereby irrevocably submit to the
non-exclusive jurisdiction of the English courts.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
SIGNED by
on behalf of Montpelier Marketing Services (UK) Limited)
in the presence of
/s/
--------------------------------------
Witness
SIGNED by Xxxxxx Xxxxxx Story Xxxxxx )
in the presence of
/s/
--------------------------------------
Witness
/s/ Xxxxxx Xxxxxx Story Xxxxxx
--------------------------------------
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