UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): December 8, 2011
AXIS CAPITAL HOLDINGS LIMITED
(Exact Name of Registrant as Specified in Charter)
|
|
|
|
|
|
|
Bermuda
|
|
001-31721
|
|
98-0395986
|
|
(State of Incorporation)
|
|
(Commission
File No.)
|
|
(I.R.S. Employer
Identification No.)
|
92 Pitts Bay Road
Pembroke HM 08, Bermuda
(Address of principal executive offices,
including zip code)
(441) 496-2600
(Registrant’s telephone number, including area code)
Not
applicable
(Former name or address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2
below):
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
As previously reported on a Form 8-K filed by AXIS Capital Holdings Limited (the “Company”) on
December 12, 2011, Mr. Albert Benchimol has been appointed as Chief Executive Officer and President of the Company effective May 3, 2012, the date of the Company’s Annual General Meeting of Shareholders. Mr. Benchimol
succeeds John R. Charman who retired as the Company’s Chief Executive Officer and President effective May 3, 2012. Mr. Charman will remain with the Company in the position of Chairman of the Board of Directors. As Chairman,
Mr. Charman will succeed Michael A. Butt, who retired as Chairman also effective May 3, 2012. Mr. Butt will continue to serve the Company as a member of the Board of Directors and consultant.
Pursuant to the terms of an employment agreement between Mr. Benchimol and the Company dated May 3, 2012 (the
“Agreement”), Mr. Benchimol’s compensation will include: (i) an annual base salary that is initially set at $1,100,000; (ii) a target annual cash bonus of 175% of base salary; (iii) eligibility to receive an annual
equity award pursuant to the Company’s 2007 Long-Term Equity Compensation Plan (the “Plan”); (iv) a monthly housing allowance for a residence in Bermuda; (v) participation in the employee benefit plans that the Company
customarily makes available to its executive officers; and (vi) up to 30 hours of personal use of the Company aircraft each calendar year. Additionally, Mr. Benchimol was granted an award of 500,000 shares of restricted stock pursuant to
the Plan. Under the terms of the applicable Restricted Stock Agreement, 250,000 of the award shares will vest in three equal installments on the first, second and third anniversary of the date of grant and the remaining 250,000 shares will be
eligible to vest on the third anniversary of the date of grant, provided that certain company performance conditions are satisfied. The Agreement also includes severance arrangements in the event that Mr. Benchimol’s employment is
terminated upon his death or disability, by the Company without cause or by Mr. Benchimol with good reason. The Agreement includes customary restrictive covenants relating to confidentiality, non-competition and non-solicitation of employees.
The foregoing description of the Agreement and the Restricted Stock Agreement is a summary only and is qualified in its entirety by reference to the Agreement and the Restricted Stock Agreement, which are attached hereto as Exhibits 10.1 and 10.2,
respectively, and incorporated herein by reference.
On May 3, 2012, the Company amended Mr. Charman’s
employment agreement to reflect his new position as Chairman of the Board of Directors. No additional changes were made to Mr. Charman’s employment agreement. A copy of Mr. Charman’s amended employment agreement is attached
hereto as Exhibit 10.3 and is incorporated herein by reference.
On May 3, 2012, the Company entered into a separation
agreement with Mr. Butt (the “Separation Agreement”), pursuant to which Mr. Butt will receive in lieu of contractual amounts otherwise payable under his employment agreement with the Company: (i) a cash payment of
$3,204,674; (ii) his vested accrued benefits pursuant to the terms of the Company’s pension plans, and (iii) vested and unvested benefits under the deferred compensation plan. Outstanding stock options and unvested restricted stock awards
previously granted to Mr. Butt will continue to vest as if no termination of employment or service had occurred. This change in service condition results in an acceleration of the expensing of Mr. Butt’s share-based compensation and the
Company
expects to record an additional $10 million in share-based compensation costs in the second quarter of 2012. Mr. Butt’s unused 2012 flight benefits for personal use of Company aircraft
will continue up and until December 31, 2012. Mr. Butt has executed a general release and waiver as a condition of receiving the benefits provided for in the Separation Agreement. The Separation Agreement requires compliance with general
confidentiality, non-competition and non-solicitation provisions and other restrictive covenants. The foregoing description of the Separation Agreement is a summary only and is qualified in its entirety by reference to the Separation Agreement,
which is attached hereto as Exhibit 10.4 and incorporated herein by reference.
Also on May 3, 2012, the Company entered
into a consulting agreement (the “Consulting Agreement”) with Mr. Butt, pursuant to which Mr. Butt will perform certain consulting services for the Company between May 4, 2012 and December 31, 2013. Mr. Butt will
receive an annual fee of $950,000 for performance of these consulting services for the 2013 fiscal year but he will not receive any fee for his consulting services in 2012. Mr. Butt also will be entitled to personal use of the Company aircraft
at his own expense during the consulting term, subject to aircraft availability at the Company’s discretion. The Consulting Agreement requires compliance with general confidentiality, non-competition and non-solicitation provisions and other
restrictive covenants. The foregoing description of the Consulting Agreement is a summary only and is qualified in its entirety by reference to the Consulting Agreement, which is attached hereto as Exhibit 10.5 and incorporated herein by reference.
Messrs. Charman and Butt and the Company’s subsidiary, AXIS Specialty Limited, previously entered into supplemental
executive retirement plans, or “SERPs”, each dated January 1, 2004, as amended and restated in May 2008 and, in the case of Mr. Butt, further amended in September 2008. The SERP with Mr. Charman requires the Company to make
annual payments to Mr. Charman beginning in 2009 for a period of 20 years, while the SERP with Mr. Butt provides for annual payments to Mr. Butt for a period of ten years beginning in 2010. On May 3, 2012, the Board approved an
arrangement providing for the: (i) termination of the SERPs, and (ii) accelerated payment to Mr. Charman and Mr. Butt of the present value of the benefit amounts owed and payable under the SERPs, measured as of June 30,
2012. The Company expects to enter into amended SERP agreements with Messrs. Charman and Butt to effect the foregoing. A description and copies of the amended SERPs will be provided when available.
|
Item 9.01
|
Financial Statements and Exhibits
|
(d) Exhibits
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
|
10.1
|
|
Employment Agreement by and among AXIS Capital Holdings Limited, AXIS Specialty U.S. Services, Inc. and Albert Benchimol dated May 3, 2012.
|
|
|
|
|
10.2
|
|
Restricted Stock Agreement for Albert Benchimol pursuant to the AXIS Capital Holdings Limited 2007 Long-Term Equity Compensation Plan.
|
|
|
|
|
10.3
|
|
Amendment No. 5 to Employment Agreement between John R. Charman and AXIS Specialty Limited dated May 3, 2012.
|
|
|
|
|
10.4
|
|
Separation Agreement and Release between Michael A. Butt and AXIS Specialty Limited dated May 3, 2012.
|
|
|
|
|
10.5
|
|
Consulting Agreement between Michael A. Butt and AXIS Specialty Limited dated May 3, 2012.
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 9, 2012
|
|
|
|
|
AXIS CAPITAL HOLDINGS LIMITED
|
|
|
|
|
By:
|
|
/s/ Richard T. Gieryn, Jr.
|
|
Name:
|
|
Richard T. Gieryn, Jr.
|
|
Title:
|
|
Executive Vice President, General Counsel and Secretary
|
Exhibit 10.1
May 3, 2012
Mr. Albert Benchimol
c/o AXIS Capital Holdings Limited
92 Pitts Bay Road
Pembroke HM 08
Bermuda
Dear Albert:
We are delighted that you have decided to continue your service with AXIS Specialty U.S. Services, Inc., a Delaware corporation (the
“
Company
”) and wholly owned, indirect subsidiary of AXIS Capital Holdings Limited, a Bermuda company (the “
Parent
”). We thought it would be useful to lay out the terms and conditions of our agreement in this letter
agreement (this “
Agreement
”). This Agreement is dated as of May 3, 2012.
|
|
a)
|
Position and Duties
. Commencing on May 3, 2012, the Company shall employ you in the position of Chief Executive Officer and President of the Parent and a
member of the management Executive Committee and, subject to shareholder approval, a member of the Parent’s Board of Directors (the “
Board
”) with all responsibilities and authorities normally associated with those positions in
a company of the size and nature of the Parent. You will report directly to the Board. You will be expected to devote your full business time and energy, attention, skills and ability to the performance of your duties and responsibilities to the
Parent Group on an exclusive basis, including service to subsidiaries and affiliates of the Parent, on a basis consistent with your position with the Parent, as requested by the Board, and shall faithfully and diligently endeavor to promote the
business and best interests of the Company and its subsidiaries and affiliates. Anything herein to the contrary notwithstanding, nothing shall preclude you from (i) upon the written approval of the Board, serving on the board of directors of
another corporation or a trade association; (ii) serving on the board of charitable organizations, (iii) engaging in charitable, community and other business affairs, and (iv) managing your personal investments and affairs; provided
such activities do not, in the reasonable judgment of the Board, materially interfere with the proper performance of your responsibilities and duties hereunder.
|
|
|
b)
|
Place of Performance
. In connection with your employment during the Employment Term (as defined in Section 3(a)), you shall be based at the Parent’s
offices in Bermuda, except for necessary travel on Company business. You will cooperate with the Parent to become and remain eligible under applicable law to work in Bermuda at all times during the Employment Term. You agree that you will promptly
notify the Company if you become aware that you are not eligible or are no longer eligible under applicable law to work in Bermuda.
|
|
|
|
|
|
11680 Great Oaks Way, Suite 500, Alpharetta, GA 30022
678-746-9000 Phone 678-746-9317 Fax
|
|
2)
|
Compensation and Benefits
|
|
|
a)
|
During the Employment Term, your annual base salary shall be no less than $1,100,000 (the base salary as may be increased from time to time referred to as “
Base
Salary
”) and shall be paid pursuant to the Company’s customary payroll practices. The Base Salary will be reviewed annually and may be increased (but not decreased) in the sole discretion of the Board.
|
|
|
b)
|
In addition to the Base Salary, in each fiscal year of the Parent ending during the Employment Term, you will be eligible to earn an annual cash bonus (“
Annual
Bonus
”). Your target Annual Bonus is 175% of your then current Base Salary, which shall be paid in cash if the corporate and/or individual performance objectives established pursuant to the Parent’s annual bonus plan for the relevant
year are satisfied. Except as provided in Section 4 below, the Annual Bonus for each period will be paid only if you are actively employed with the Company on the date of disbursement. Any Annual Bonus payable hereunder shall be paid in the
calendar year following the applicable fiscal year of the Parent, after it has been determined by the Compensation Committee of the Parent, and then on the same schedule generally followed by the Company with respect to similar annual bonuses for
the said fiscal year for the majority of named executive officers of the Parent. All determinations hereunder shall be made in good faith and on a basis reasonably consistent with the treatment of other executive officers generally.
|
|
|
c)
|
Within 30 days following the commencement of the Employment Term, as defined herein, Parent shall grant you an award of 500,000 restricted shares of the Common Stock of
Parent pursuant to the 2007 Long-Term Equity Compensation Plan as it may be amended from time to time and subject to an award agreement in substantially the form as attached hereto as
Exhibit A
.
|
|
|
d)
|
You will be eligible to participate in the Parent’s long-term incentive plans, including, but not limited to, the Parent’s 2007 Long-Term Equity Compensation
Plan, as it may be amended from time to time (or a successor plan), and to receive equity grants and awards under such plan(s), on terms and conditions that are appropriate in light of your position, performance and the performance of the Parent,
all as determined by and at the discretion of the Compensation Committee of the Parent.
|
|
|
e)
|
During the Employment Term, you will be eligible to participate in or receive benefits under any 401(k) savings plan, medical and dental benefits plan, life insurance
plan, short-term and long-term disability plans, supplemental and/or incentive compensation plans, or any other employee benefit or fringe benefit plan, generally made available by the Parent to senior executives in accordance with the eligibility
requirements of such plans and subject to the terms and conditions set forth in this Agreement. Notwithstanding the foregoing, unless otherwise agreed by the parties, you shall not be eligible to participate in any nonqualified deferred compensation
plans sponsored by the Company in order to prevent the application of Section 457A of the Internal Revenue Code of 1986, as amended (the “Code”) to any compensation earned by you.
|
|
|
f)
|
During the Employment Term, you will be entitled to 30 days of paid vacation per calendar year (prorated for any partial years of employment), subject to the applicable
vacation policies and procedures on usage and carry over.
|
|
|
g)
|
During the Employment Term, the Company will reimburse you for all reasonable business expenses incurred by you in the course of performing your duties
under this
|
2
|
|
Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s
requirements with respect to reporting and documentation of expenses. Reimbursements will be paid promptly after submission and review of appropriate documentation, but in any event no later than 2
1
/
2
months after the end of the calendar year in which the expense was
incurred. The Company shall also promptly reimburse you for all reasonable attorneys’ fees incurred in connection with negotiating and documenting this Agreement and related arrangements.
|
|
|
h)
|
Provided you relocate to Bermuda and maintain your own residence in Bermuda in connection with your employment during the Employment Term, the Company
will reimburse you on an after-tax basis for the reasonable costs that you actually incur for your relocation to Bermuda (including the costs of transportation and moving furniture and personal and household items) and will provide you with a
monthly housing allowance of $25,000. In the event of termination of your Employment in conformity with this Agreement, then provided you relocate from Bermuda to the United States within six months following said termination, the Company will
reimburse you on an after-tax basis for the reasonable costs that you actually incur during said six months for your relocation from Bermuda to the United States (including the costs of transportation and moving furniture and personal and household
items). Reimbursements under this subparagraph will be paid promptly after submission and review of appropriate documentation, but in any event no later than
2
1
/
2
months after the end of the calendar year in
which the expense was incurred.
|
|
|
i)
|
During the Employment Term, you will be entitled to a maximum of 30 hours per calendar year of personal use of Company aircraft.
|
|
|
a)
|
The employment period shall commence on May 3, 2012, and shall terminate on May 3, 2015 (the “
Employment Term
”), unless earlier terminated as
provided in this Section 3. Your employment hereunder may be terminated by the Company or by you, as applicable, without any breach of this Agreement under the following circumstances:
|
|
|
(i)
|
Death
. Your employment shall automatically terminate upon your death.
|
|
|
(ii)
|
Disability
. The Company shall be entitled to terminate your employment if, as a result of your incapacity due to physical or mental illness or injury, you shall
have been unable to perform your duties hereunder for a period of 181 days in any twelve-month period (your “Disability”).
|
|
|
(iii)
|
Cause
. The Company may terminate your employment at any time for Cause which, for purposes of this Agreement, shall mean (A) any act or
omission which constitutes a material breach by you of the terms of this Agreement, the employment policies of the Parent Group, or applicable law governing the Parent Group or your employment, (B) the conviction of a felony or commission of
any act which would rise to the level of a felony, (C) the conviction (or commission of any act which would rise to the level of) a lesser crime or offense that adversely impacts or potentially could impact upon the business or reputation of
the Parent Group in a material way, (D) your willful violation of specific lawful and material directives of the Parent that are not contrary to this Agreement, (E) commission of a dishonest or wrongful act involving fraud,
misrepresentation or moral turpitude causing damage or potential
|
3
|
|
damage to the Company, its parent and/or affiliates and subsidiaries, (F) the willful failure to perform a substantial part of your substantial job functions after written notice from the
Board requesting such performance, or (G) material breach of fiduciary duty.
|
Anything to the contrary
notwithstanding, you shall not be terminated for “Cause” within the meaning of clauses A through G, above, unless written notice stating the basis for the termination is provided to you and you are given 15 days to cure the event that is
the basis of such claim, and, if you fail to cure such event, you have an opportunity to be heard before the full Board within 15 days following the end of such cure period and, within five (5) days after such hearing, there is a unanimous vote
of all disinterested members of the Board to terminate you for Cause, provided, however, the foregoing right to cure will not apply in the event of a termination for Cause due to the conviction of any of the acts described in clauses B, C or E,
above.
|
|
(iv)
|
Without Cause
. The Company may terminate your employment at any time without Cause;
provided
, however, that the Company provides you with notice of its
intent to terminate at least twelve (12) months in advance of the date of termination.
|
|
|
(v)
|
Voluntary Resignation
. You may voluntarily terminate your employment hereunder;
provided
, however, that in the event you are not terminating for Good
Reason pursuant to subparagraphs (vi) and (vii) below, you provide the Company with notice of your intent to terminate at least twelve (12) months in advance of the date of termination.
|
|
|
(vi)
|
Good Reason
. You may terminate your employment for Good Reason if (i) (A) the scope of your position, authority or duties is materially adversely
changed (except for changes during a Notice Period as authorized under Section 3(c) below), (B) your compensation under this Agreement is not paid or your Base Salary or your Target Bonus is reduced below the levels specified in Sections
2(a) and (b) or there is a material adverse change in your employee benefits (excluding changes in any benefits plan where such changes apply generally to senior executive participants in the plan), (C) you are notified by the Company that
you are required to relocate to a place outside of Bermuda, (D) you are assigned duties that are materially inconsistent with your position with the Company/Parent, (E) you are required to report to any person or entity other than the
Board, or (F) the Company and Parent fail to offer you at least six (6) months before the end of the Employment Term continuing employment on terms no less favorable to you than set forth herein; (ii) you give the Company written
notice of your intent to terminate your employment as a result of such event and provide the specific reasons therefore within thirty (30) days of such event occurring; (iii) the Company does not make the necessary corrections within
thirty (30) days of receipt of your written notice; and (iv) you terminate employment no later than ten (10) days following the end of such thirty (30) day period.
|
|
|
(vii)
|
Good Reason following a Change in Control
. You may terminate your employment for Good Reason if (i) during the twenty-four (24) month
period immediately following a Change in Control (A) the scope of your
|
4
|
|
position, authority or duties is materially adversely changed (except for changes during a Notice Period as authorized under Section 3 (c) below), (B) your compensation under this
Agreement is not paid or your Base Salary or your Target Bonus is reduced below the levels specified in Sections 2(a) and (b) or there is a material adverse change in your employee benefits (excluding changes in any benefits plan where such
changes apply generally to senior executive participants in the plan), (C) you are notified by the Company that you are required to relocate to a place outside of Bermuda, (D) you are assigned duties that are materially inconsistent with
your position with the Company/Parent, (E) you are required to report to any person or entity other than the Board, or (F) in the event that any other person or entity acquires all or substantially all of the Parent Group’s business,
the Company fails to obtain the assumption of this Agreement by the successor; (ii) you give the Company written notice of your intent to terminate your employment as a result of such event and provide the specific reasons therefore within
thirty (30) days of your knowledge of such event occurring; (iii) the Company does not make the necessary corrections within thirty (30) days of receipt of your written notice; and (iv) you terminate employment no later than ten
(10) days following the end of such thirty (30) day period. For purposes of this Agreement, the “Change in Control” will be deemed to have occurred as of the first day any of the following events occur:
|
|
|
1.
|
Any person or entity is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the U.S. Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Parent representing 50% or more of the combined voting power of the Parent’s then outstanding voting securities entitled to vote generally in the election of directors (the “
Outstanding Parent Voting
Securities
”);
provided
, however, that for purposes of this Section 3(a)(vii)(1), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly by the Parent, (B) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the Parent or any affiliate of the Parent or (C) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of
Section 3(a)(vii)(3) hereof;
|
|
|
2.
|
Individuals who, as of the date of this Agreement, constitute the Board (hereinafter referred to as the “
Incumbent Board
”) cease for any reason to
constitute at least a majority of the Board;
provided
, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Parent’s stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, excluding any individual whose initial assumption of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person or entity other than the Board;
|
|
|
3.
|
Consummation of a reorganization, merger, share exchange, amalgamation, recapitalization, consolidation or similar transaction by and among the Parent
or a subsidiary of the Parent and another person or entity, including, for this purpose, a transaction as a result
|
5
|
|
of which another person or entity owns the Parent or all or substantially all of the Parent’s assets, either directly or through one or more subsidiaries (a “
Business
Combination
”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Voting Securities
immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent
management personnel) of Parent or the entity or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent’s assets, either directly or through one or more subsidiaries, in substantially the same
proportions as their ownership of the Outstanding Parent Voting Securities immediately prior to such Business Combination; (B) no person or entity (excluding any entity resulting from such Business Combination, or that, as a result of such
Business Combination, owns the Parent or all or substantially all of the Parent’s assets, either directly or through one or more subsidiaries, or any employee benefit plan (or related trust) of the foregoing) beneficially owns, directly or
indirectly, 50% or more of the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent management personnel) of the entity
resulting from such Business Combination or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent’s assets, either directly or through one or more subsidiaries, except to the extent that such
ownership existed with respect to the Parent prior to the Business Combination; and (C) at least a majority of the members of the board of directors (or equivalent management personnel) of Parent or the entity that, as a result of such Business
Combination, owns the Parent or all or substantially all of the Parent’s assets, either directly or through one or more subsidiaries, were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of
the Board, pursuant to which such Business Combination is effected or approved; or
|
|
|
4.
|
Approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent or the sale or other disposition of all or substantially all of the
Parent’s assets.
|
|
|
b)
|
Any termination of your employment by the Company or by you under this Section 3 (other than termination pursuant to Section 3(a)(i)) shall be communicated by
a written notice to the other party hereto indicating the specific termination provision in this Agreement relied upon and specifying a date of termination, which may not exceed eighteen months from the date of such notice.
|
|
|
c)
|
The period between the date notice of termination is provided and your termination date shall be referred to as the “Notice Period.” During
any Notice Period, the Company may, in its absolute discretion: (i) relieve you of all of your duties, in connection with which the Company may: (A) require you not to have any contact with customers or clients of the Company nor any
contact (other than purely social contact) with such employees of the Company as the Company shall determine, (B) exclude you from any premises of the
|
6
|
|
Company, or (C) require you to resign from all directorships and other offices that you hold in connection with your employment with the Company (including any directorships with
subsidiaries or other affiliates of the Company) effective as of any date during the Notice Period, or (ii) terminate your employment, which shall also terminate the Notice Period for purposes of this Agreement. If the Company elects to take
any such action, such election shall not constitute a breach by the Company of this Agreement or Good Reason for you to terminate your Employment under Sections 3(a)(vi) or (vii) and you shall not have any claim against the Company in
connection therewith so long as, during the Notice Period, the Company continues to pay to you your Base Salary, Annual Bonus, (which shall be calculated as if all applicable goals were satisfied at target) and all of the other amounts described in
Section 2 of this Agreement.
|
|
4)
|
Severance Payments and Other Benefits Following Termination of Employment
|
|
|
a)
|
In the event that your employment with the Company shall terminate for any reason, and except as otherwise set forth in this Agreement, the Company’s sole
obligation under this Agreement shall be to pay to you any accrued but unpaid Base Salary for services rendered to the date of termination, any bonus awarded by the Compensation Committee in respect of a prior year’s target Annual Bonus but not
yet paid as of the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any accrued but unused vacation accrued to the date of termination, any unpaid housing allowance accrued to the date of
termination, and comply with Section 2(h) relating to relocation benefits, if applicable. For the sake of clarity, this Section 4(a) does not limit any rights you may have under the Company’s retirement or welfare plans.
|
|
|
b)
|
Death
. In the event your employment is terminated due to your death pursuant to Section 3(a)(i), then in addition to the amounts provided under
Section 4(a) above:
|
|
|
i)
|
Your beneficiary will be paid a cash lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to your termination, to be paid no
later than sixty (60) days following your termination;
|
|
|
ii)
|
Your beneficiary will be paid an amount equal to the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs,
calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination; and
|
|
|
iii)
|
All outstanding and unvested restricted shares (or other awards, such as restricted stock units or stock options) of the Common Stock of Parent pursuant to the 2007
Long-Term Equity Compensation Plan as it may be amended from time to time, or any successor plan or equivalent plan, unless prohibited by such successor or equivalent plan (“Restricted Shares”), shall immediately vest upon said
termination, with outstanding options remaining exercisable for the shorter of one year or their remaining term.
|
|
|
c)
|
Disability
. In the event that the Company terminates your employment due to your disability, pursuant to Section 3(a)(ii), then in addition to the amounts
provided under Section 4(a) above:
|
|
|
i)
|
You will be paid a cash lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to your termination, to be paid no later than sixty
(60) days following your termination;
|
7
|
|
ii)
|
You will be paid an amount equal to the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as
if all targets were met, to be paid in a cash lump sum no later than sixty (60) days following your termination; and
|
|
|
iii)
|
All outstanding and unvested Restricted Shares shall immediately vest upon said termination, with outstanding options remaining exercisable for the shorter of one year
or their remaining term.
|
|
|
d)
|
Termination by the Company without Cause
. In the event that the Company terminates your employment without Cause in accordance with the provisions of
Section 3(a)(iv) hereof, and conditioned on your compliance with this Agreement during the Notice Period (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)), then in addition to the amounts
you have received during the Notice Period and any other amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you following the
termination of the Notice Period:
|
|
|
(i)
|
You will be paid a cash lump sum amount equal to two year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty
(60) days following your termination;
|
|
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in
Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
|
|
(iii)
|
You will be paid an amount equal to two times the higher of (i) the highest Annual Bonus earned for any of the three (3) calendar years preceding your date of
termination or (ii) the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met (the “Applicable Bonus”), such amount to be paid in a cash
lump sum no later than sixty (60) days following your termination;
|
|
|
(iv)
|
You will be paid a pro rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on
the number of days you were employed by the Company during such year and calculated as if all targets were met, to be paid in a cash lump sum no later than sixty (60) days following your termination;
|
|
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months
from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain
coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
8
|
|
(vi)
|
In the event that the Company terminates your employment without Cause in accordance with the provisions of Section 3(a)(iv), then for so long as you shall remain
in full compliance with the obligations set forth in Sections 7, 8, 9 and 10 below, and conditioned on such continued compliance, all Restricted Shares previously granted to you which have not vested as of the date of your termination, if any, shall
continue to vest on the applicable dates set forth in the applicable award agreements granting such Restricted Shares, with outstanding options remaining exercisable for the shorter of one year or their remaining term.
|
|
|
e)
|
Termination by the Company without Cause Following Change in Control
. In the event that within 24 months following a Change in Control as defined in
Section 3(a)(vii) (1 – 4) hereof the Company terminates your employment without Cause, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to the amounts you have
received during the Notice Period and any other amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you following the termination of
the Notice Period:
|
|
|
(i)
|
You will be paid a cash lump sum amount equal to two year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty
(60) days following your termination;
|
|
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in
Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
|
|
(iii)
|
You will be paid an amount equal to three times the Applicable Bonus, to be paid in a cash lump sum no later than sixty (60) days following your termination;
|
|
|
(iv)
|
You will be paid a pro rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on
the number of days you were employed by the Company during such year and calculated as if all targets were met, to be paid in a cash lump sum no later than sixty (60) days following your termination;
|
|
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months
from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain
coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
|
|
(vi)
|
All outstanding and unvested Restricted Shares shall immediately vest upon said termination, with outstanding options remaining exercisable for the shorter of one year
or their remaining term.
|
9
|
|
f)
|
Termination by You for Good Reason
. In the event that you terminate for Good Reason in accordance with the provisions of Section 3(a)(vi) hereof, (but not
for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to the amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i)
below, the following will be provided to you:
|
|
|
(i)
|
You will be paid a cash lump sum amount equal to two year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty
(60) days following your termination;
|
|
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in
Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
|
|
(iii)
|
You will be paid an amount equal to two times the Applicable Bonus, to be paid in a lump sum no later than sixty (60) days following your termination;
|
|
|
(iv)
|
You will be paid a pro rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on
the number of days you were employed by the Company during such year and calculated as if all targets were met, to be paid in a cash lump sum no later than sixty (60) days following your termination;
|
|
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months
from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain
coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
|
|
(vi)
|
In the event that you terminate with Good Reason in accordance with the provisions of Section 3(a)(vi), then for so long as you shall remain in full compliance
with the obligations set forth in Sections 7, 8, 9 and 10 below, and conditioned on such continued compliance, all Restricted Shares previously granted to you which have not vested as of the date of your termination, if any, shall continue to vest
on the applicable dates set forth in the applicable award agreements granting such Restricted Shares with outstanding options remaining exercisable for the shorter of one year or their remaining term.
|
|
|
g)
|
Termination by You for Good Reason Following Change in Control
. In the event that within 24 months following a Change of Control as defined in
Section 3(a)(vii) (1 – 4) hereof you terminate for Good Reason in accordance with the provisions of Section 3(a)(vii) hereof, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v))
then in addition to the amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you:
|
|
|
(i)
|
You will be paid a cash lump sum amount equal to two year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty
(60) days following your termination;
|
10
|
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in
Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
|
|
(iii)
|
You will be paid an amount equal to three times the Applicable Bonus, to be paid in a cash lump sum no later than sixty (60) days following your termination;
|
|
|
(iv)
|
You will be paid a pro rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on
the number of days you were employed by the Company during such year and calculated as if all targets were met, to be paid in a cash lump sum no later than sixty (60) days following your termination;
|
|
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months
from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain
coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
|
|
(vi)
|
All outstanding and unvested Restricted Shares shall immediately vest upon said termination, with outstanding options remaining exercisable for the shorter of one year
or their remaining term.
|
|
|
h)
|
No severance benefits or payments provided pursuant to this Section 4, other than the amounts described in Section 4(a), will be provided to
you unless you execute a waiver and release in the form specified in
Exhibit B
hereto (with such changes as may be required due to change in applicable law or regulation) within forty-five (45) days following your employment termination
date and do not revoke such release. To the extent required to avoid penalty taxes under Section 409A of the Code, any payment or benefit payment hereunder shall commence on the 60
th
day following your termination, including any payments that would otherwise have been made prior to such date.
|
|
|
i)
|
In the event of any termination of your Employment by the Company, or by you in conformity with this Agreement, you shall be under no obligation to seek other
employment, and there shall be no offset against amounts due you under this Agreement on account of any remuneration attributable to any subsequent employment you may obtain. Any amounts due under this Section 4 are considered to be reasonable
by the Company and not in the nature of a penalty.
|
11
|
5)
|
Resignation from Directorships and Other Offices
|
In addition, upon your termination of employment with the Company for any reason, you agree to resign from all directorships and other offices that you hold in connection with your employment with the
Company (including any directorships with subsidiaries or other affiliates of the Company).
During employment with the Company, you may not use your position, influence, knowledge of Confidential Information or Trade Secrets or the Company’s assets for personal gain. A direct or indirect
financial interest (excluding investments in mutual funds or other similar investment vehicles), including joint ventures in or with a supplier, vendor, customer or prospective customer without disclosure and the express written approval of the
Chief Executive Officer of the Parent is strictly prohibited during employment with the Company.
|
7)
|
Confidential Information
|
|
|
a)
|
As an executive of the Company, you will learn or have access to, or may assist in the development of, highly confidential and sensitive information and trade secrets
about the Company, its operations, its subsidiaries and affiliates, its employees, and its customers, which are the property of the Company. Such Confidential Information and Trade Secrets include but are not limited to: (i) financial and
business information relating to the Company, such as information with respect to costs, commissions, fees, profits, expenses, sales, markets, mailing lists, strategies and plans for future business, new business, product or other development,
potential acquisitions or divestitures, and new marketing ideas; (ii) product and technical information relating to the Company, such as product formulations, new and innovative product ideas, methods, procedures, devices, machines, equipment,
data processing programs, software, software codes, computer models, and research and development projects; (iii) customer information, such as the identity of the Company’s customers, the names of representatives of the Company’s
customers responsible for entering into contracts with the Company, the amounts paid by such customers to the Company, specific customer needs and requirements, specific customer risk characteristics, policy expiration dates, policy terms and
conditions, information regarding the markets or sources with which insurance is placed, and leads and referrals to prospective customers; (iv) personnel information, such as the identity and number of the Company’s other employees, their
salaries, bonuses, benefits, skills, qualifications, and abilities; (v) any and all information in whatever form relating to any client or prospective customer of the Company, including but not limited to, its business, employees, operations,
systems, assets, liabilities, finances, products, and marketing, selling and operating practices; (vi) any information not included in (i) or (ii) above which you know or should know is subject to a restriction on disclosure or which
you know or should know is considered by the Company or the Company’s customers or prospective customers to be confidential, sensitive, proprietary or a trade secret or is not readily available to the public; and (vii) intellectual
property, including inventions and copyrightable works. Confidential Information and Trade Secrets are not generally known or available to the general public, but have been developed, compiled or acquired by the Company at its great effort and
expense. Confidential Information and Trade Secrets can be in any form: oral, written or machine readable, including electronic files, but shall not included any information known generally to the public or within the Company’s industry.
|
|
|
b)
|
You acknowledge and agree that the Company is engaged in a highly competitive business and that its competitive position depends upon its ability to
maintain the
|
12
|
|
confidentiality of the Confidential Information and Trade Secrets which were developed, compiled and acquired by the Company at its great effort and expense. You further acknowledge and agree
that any disclosing, divulging, revealing, or using of any of the Confidential Information and Trade Secrets, other than in connection with the Company’s business or as appropriate to carry out your duties for the Parent Group, will be highly
detrimental to the Company and cause it to suffer serious loss of business and pecuniary damage.
|
|
|
c)
|
Accordingly, you agree that you will not, while associated with the Company and for so long thereafter as the pertinent information or documentation remains
confidential, for any purpose whatsoever, directly or indirectly use, disseminate or disclose to any other person, organization or entity Confidential Information or Trade Secrets, except as appropriate to carry out your duties as an executive of
the Parent and except (i) as expressly authorized by the Board, (ii) appropriate to enforce the terms of this Agreement, or (iii) required by law or legal process; provided, that you give notice to the Company promptly on becoming
aware of any obligations to disclose such information under this provision, and not less than ten days prior to making any such disclosure.
|
|
|
d)
|
Immediately upon the termination of employment with the Company for any reason, or at any time the Company so requests, you will return to the Company: (i) any
originals and all copies of all files, notes, documents, slides (including transparencies), computer disks, printouts, reports, lists of the Company’s clients or leads or referrals to prospective clients, and other media or property in
Employee’s possession or control which contain or pertain to Confidential Information or Trade Secrets; and (ii) all property of the Company, including, but not limited to, supplies, keys, access devices, books, identification cards,
computers, telephones and other equipment.
|
|
|
a)
|
You agree that all inventions, improvements, products, designs, specifications, trademarks, service marks, discoveries, formulae, processes, software or computer
programs, modifications of software or computer programs, data processing systems, analyses, techniques, trade secrets, creations, ideas, work product or contributions thereto, and any other intellectual property, regardless of whether patented,
registered or otherwise protected or protectable, and regardless of whether containing or constituting Trade Secrets or Confidential Information as defined in this Agreement (referred to collectively as “Intellectual Property”), that were
conceived, developed or made by you during the period of your employment by the Company and that relate directly to the Company’s insurance and reinsurance business and any other business in which the Company was engaged as of the date of your
termination of employment with the Company (the “Proprietary Interests”), shall belong to and be the property of the Company.
|
|
|
b)
|
You further covenant and agree that you will: (i) promptly disclose such Intellectual Property to the Company; (ii) make and maintain for the Company,
adequate and current written records of your innovations, inventions, discoveries and improvements; (iii) assign to the Company, without additional compensation, the entire rights to Intellectual Property for the United States and all foreign
countries; (iv) execute assignments and all other papers and do all acts necessary to carry out the above, including enabling the Company to file and prosecute applications for, acquire, ascertain and enforce in all countries, letters patent,
trademark registrations and/or copyrights covering or otherwise relating to Intellectual Property and to enable the Company to protect its proprietary interests therein; and (v) give testimony, at the Company’s expense, in any action or
proceeding to enforce rights in the Intellectual Property.
|
13
|
|
c)
|
You further covenant and agree that it shall be conclusively presumed as against you that any Intellectual Property related to the Proprietary Interests described by
you in a patent, service mark, trademark, or copyright application, disclosed by you in any manner to a third person, or created by you or any person with whom you have any business, financial or confidential relationship, within one (1) year
after cessation of your employment with the Company, was conceived or made by you during the period of employment by the Company and that such Intellectual Property be the sole property of the Company.
|
|
|
d)
|
Nothing in this Section 8 shall be construed as granting or implying any right to you under any patent or unpatented intellectual property right of the Company, or
your right to use any invention covered thereby.
|
|
|
e)
|
In the event that you are requested or required (by oral questions, interrogatories, requests for information or documents, subpoena or similar process) to disclose any
information protected by Sections 7 and 8 (collectively, “Restricted Material,”) you agree to provide the Company with prompt notice of such request(s) so that the Company may seek an appropriate protective order or other appropriate
remedy and/or waive your compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, or that the Company grants a waiver hereunder, you may furnish that portion (and only that portion)
of the Restricted Material which you are legally compelled to disclose and will exercise your reasonable best efforts to obtain reliable assurance that confidential treatment will be accorded any Restricted Material so furnished.
|
|
|
a)
|
You acknowledge and agree that the Company is engaged in a highly competitive business and that by virtue of your senior executive position and responsibilities with
the Company and your access to the Confidential Information and Trade Secrets, engaging in any business which is directly competitive with the Company during the 24-month period following the termination of your employment will cause it great and
irreparable harm.
|
|
|
b)
|
Accordingly, you covenant and agree that so long as you are employed by the Company and for a period of twenty four (24) months after such employment ends for any
reason whatsoever, whether voluntarily or involuntarily, you will not, without the express written consent of the Chief Executive Officer of the Parent, directly or indirectly, own, manage, operate or control, or be employed in the same or
substantially the same position or duties as the position(s) held by you with the Company or the Parent, by any company or entity engaged in the insurance or reinsurance business in which the Company is engaged or has announced an intention to
become engaged as of the date of termination of employment, and for which you had responsibility or about which you had knowledge of or access to Confidential Information and Trade Secrets. In recognition of the global nature of the Company’s
business which includes the sale of its products and services around the world, and in nature of your senior executive position, this restriction shall apply throughout the United States and Bermuda.
|
|
10)
|
Non-Solicitation of Employees
|
|
|
a)
|
You acknowledge and agree that solely as a result of employment with the Company, and in light of the broad responsibilities of such employment which include working
with other employees of the Company, you have and will come into contact with and acquire Confidential Information and Trade Secrets regarding other employees of the Company, and will develop relationships with those employees.
|
14
Accordingly, you covenant and agree that for so long as you are employed by the Company and
for a period of twenty four (24) months after such employment ends, whether voluntarily or involuntarily and whether with or without cause, you shall not, either on your own account or on behalf of any person, company, corporation, or other
entity, directly or indirectly, solicit any employee of the Company to leave employment with the Company. This restriction shall apply to those employees of the Company with whom you came into contact or about whom you obtained Confidential
Information or Trade Secrets during the last two (2) years of your employment with the Company.
|
|
a)
|
The parties acknowledge and agree that compliance with the covenants set forth in this Agreement is necessary to protect the Confidential Information and Trade Secrets,
business and goodwill of the Company, and that any breach of this Agreement will result in irreparable and continuing harm to the Company, for which money damages may not provide adequate relief. Accordingly, in the event of any breach or
anticipatory breach of this Agreement by you, or your claim in a declaratory judgment action that all or part of this Agreement is unenforceable, the parties agree that the Company shall be entitled to the following particular forms of relief as a
result of such breach, in addition to any remedies otherwise available to it at law or equity: (a) injunctions, both preliminary and permanent, enjoining or restraining such breach or anticipatory breach, and you consent to the issuance thereof
forthwith and without bond by any court of competent jurisdiction; and (b) recovery of all reasonable sums and costs, including attorneys’ fees, incurred by the Company to defend or enforce the provisions of this Agreement if you argue
that such covenants are unreasonable or unenforceable.
|
|
|
b)
|
The parties hereto hereby declare that it is impossible to measure in money the damages that will accrue to the Company by reason of your failure to perform any of your
obligations under Sections 7, 8, 9, and 10. Accordingly, if the Company institutes any action or proceeding to enforce the provisions hereof, to the extent permitted by applicable law, you hereby waive the claim or defense that the Company has an
adequate remedy at law, and you shall not urge in any such action or proceeding the defense that any such remedy exists at law. The foregoing rights shall be in addition to any other rights and remedies available to the Company under law or in
equity.
|
|
|
c)
|
If any of the covenants contained in Sections 7, 8, 9, and 10, or any part thereof, is construed to be invalid or unenforceable, the same shall not affect the remainder
of the covenant or covenants, which shall be given full effect, without regard to the invalid portion(s). In addition, if any of the covenants contained in Sections 7, 8, 9, and 10 hereof, or any part thereof, is held by any person or entity with
jurisdiction over the matter to be invalid or unenforceable because of duration of such provision or the geographical area covered thereby, the parties agree that such person or entity shall have the power to reduce the duration and/or geographical
area of such provision and, in its reduced form, said provisions shall then be enforceable.
|
|
|
d)
|
It is understood and agreed that no failure or delay by the Company in exercising any right, power or privilege contained in Sections 7, 8, 9, and 10 shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege contained in Sections 7, 8, 9, or 10.
|
|
|
e)
|
It is understood and agreed that references to the “Company” in the foregoing Sections 7, 8, 9 and 10 include the Company, Parent and its affiliates.
|
15
|
12)
|
Disclosure of Agreement; Disclosure of New Employment
|
You agree that you will promptly disclose the existence of this Agreement and the post-employment restrictions contained herein to all subsequent employers until all such covenants have expired.
You shall not willfully or knowingly make any public statement that would disparage or defame the Company, Parent or its affiliates.
Parent and the Company shall not, and shall cause each of the executives and directors of the Company, Parent and its affiliates not to, willfully or knowingly make any public statement that would disparage or defame you. Notwithstanding the
foregoing, nothing in this Section 13 shall prevent any person from (i) responding publicly to any incorrect, disparaging or defamatory public statement to the extent reasonably necessary to correct or refute such public statement or
(ii) making any truthful statement to the extent (A) such disclosure is in confidence to an attorney for the purpose of obtaining legal advice, (B) such disclosure is in connection with any litigation, arbitration or mediation
involving this Agreement or other agreements or arrangements involving the parties, including, but not limited to, the enforcement of this Agreement or such other agreement or arrangements or (C) you are required to disclose such information
(whether or not in connection with a disclosure required in clause (B)) by law or by an court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction.
The Parent is an international insurance company, and has subsidiaries that conduct business in the United States (including New York) and
other countries. You and the Company are desirous of having any disputes resolved in a forum having a substantial body of law and experience with the matters contained herein. As a result, you and the Company have a strong interest in providing a
single forum and governing law for the convenience of you and the Company to resolve any and all legal claims. In addition, you recognize that the Company’s and the Parent’s savings from limiting the forum for legal claims allow them and
their affiliates to maintain lower business expenses, which help all of them provide more cost effective and competitive insurance products and services. For all of these reasons, you and the Company agree that any action or proceeding brought in
any court or other forum with respect to this Agreement and Employee’s employment shall be brought exclusively in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of
New York, or in any other court of competent jurisdiction sitting in the County and State of New York, and the parties agree to the personal jurisdiction thereof. The parties hereby irrevocably waive any objection they may now or hereafter have to
the laying of venue of any such action in the said court(s), and further irrevocably waive any claim they may now or hereafter have that any such action brought in said court(s) has been brought in an inconvenient forum. The parties recognize that,
should any dispute or controversy arising from or relating to this agreement be submitted for adjudication to any court or other third party, the preservation of the secrecy of Confidential Information or Trade Secrets may be jeopardized.
Consequently, the parties agree that all issues of fact shall be tried without a jury. If you substantially prevail on any material issue in a dispute with Parent, the Company or any of their direct or indirect subsidiaries, the Company shall
reimburse you for reasonable costs and expenses incurred in such dispute (including reasonable attorney fees).
16
You
and the Company agree that for the reasons recited in the foregoing paragraph 14, this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to its conflict of laws provisions.
You and the Company understand and agree that certain payments contemplated by this Agreement may be “nonqualified deferred
compensation” for purposes of Section 409A of the Code. No nonqualified deferred compensation payable hereunder shall be paid or be subject to acceleration or to any change in the specified time or method of payment, except as otherwise
provided under this Agreement and consistent with Section 409A of the Code. Notwithstanding any other provision of this Agreement to the contrary, and to the extent required by Section 409A of the Code (as amended from time to time), in
the event that payment of nonqualified deferred compensation made pursuant to this Agreement is based upon or attributable to your termination of employment and you are at the time of your termination a “Specified Employee,” then any
payment of nonqualified deferred compensation otherwise required to be made to you shall be deferred and paid in a lump sum to you on the day after the date that is six (6) months from the date of your “Separation from Service” within
the meaning of Section 409A of the Code; provided, however, if you die prior to the expiration of such six (6) month period, payment to your beneficiary shall be made as soon as practicable following your death. You will be a
“Specified Employee” for purposes of this Agreement if, on the date of your Separation from Service, you are an individual who is, under the method of determination adopted by the Company designated as, or within the category of employees
deemed to be, a “specified employee” within the meaning and in accordance with Treasury Regulation Section 1.409A-1(i). The Company shall determine in its sole discretion all matters relating to who is a “Specified Employee”
and the application of and effects of the change in such determination.
The Parent shall indemnify you and advance expenses to the same extent and by the same means as provided to members of the Board, if more
favorable to you, or other executive officers generally, but in no event less than the fullest extent permitted or authorized by the Bye-laws of Parent or, if greater, by Bermuda law.
|
|
a)
|
Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered
personally or three days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed to the relevant party at the
address provided for such party on the first page hereof, or to such other address as any party hereto may designate by notice to the other in accordance with the foregoing.
|
|
|
b)
|
This Agreement constitutes the entire agreement among you and the Company, the Parent and any affiliate with respect to your employment by the Company, and supersedes
and is in full substitution for any and all prior understandings or agreements with respect to your employment, including but not limited to, the Employment Agreement between you and the Parent dated November 1, 2010. This Agreement shall be
binding upon execution by both parties, it being understood and agreed that your employment hereunder shall not commence until the close of business on May 3, 2012.
|
17
|
|
c)
|
This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing
signed by the party against whom or which enforcement of such waiver is sought. Any amendment to this Agreement must comply with the requirements of Section 409A of the Code.
|
|
|
d)
|
The Company shall withhold from any compensation and benefits payable under this Agreement all applicable U.S. federal, state, local, or other taxes.
|
|
|
e)
|
Except as otherwise set forth herein, in the event of any contest or dispute between you and the Company with respect to this Agreement, each of the parties shall be
responsible for their respective legal fees and expenses.
|
|
|
f)
|
If any term or provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such
term or provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.
|
|
|
g)
|
Except as otherwise provided in this Agreement, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs,
representatives, successors and assigns. Your rights and benefits under this Agreement are personal to you and no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer; provided, however, that nothing
in this Section 17 shall preclude you from designating a beneficiary or beneficiaries to receive any benefit payable on your death.
|
|
|
h)
|
The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.
|
|
|
i)
|
Except as otherwise expressly set forth in this Agreement, to the extent necessary to carry out the intentions of the parties hereunder, the respective rights and
obligations of the parties hereunder shall survive any termination of your employment or expiration or termination of this Agreement.
|
|
|
j)
|
Nothing in this Agreement shall be construed as giving you any claim against any specific assets of the Company, Parent or any affiliate or as imposing any trustee
relationship upon the Company in respect of you. The Company shall not be required to establish a special or separate fund or to segregate any of its assets in order to provide for the satisfaction of its obligations under this Agreement. Your
rights under this Agreement shall be limited to those of an unsecured general creditor of the Company, Parent and its affiliates.
|
|
|
k)
|
Both parties, through their respective counsel, have participated in the preparation of this Agreement and its
Exhibit B
. Accordingly, both parties shall be
deemed to be the drafter of this Agreement or its
Exhibit B
for purposes of construing their provisions. The language in all parts of this Agreement and its exhibits shall be interpreted according to its fair meaning, and shall not be
interpreted for or against either of the Parties as the drafter of the language.
|
|
|
l)
|
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute on
and the same Agreement.
|
18
If the terms of this Agreement meet with your approval, please sign and return one copy to
the Company.
[signatures on following page]
19
|
|
|
|
|
AXIS SPECIALTY U.S. SERVICES, INC.
|
|
|
|
|
By:
|
|
/s/ Brian W. Goshen
|
|
|
|
|
|
Name:
|
|
Brian W. Goshen
|
|
Title:
|
|
Chief Administrative Officer
|
|
|
|
|
|
|
|
AXIS CAPITAL HOLDINGS LIMITED
|
|
|
|
|
By:
|
|
/s/ Michael A. Butt
|
|
|
|
|
|
Name:
|
|
Michael A. Butt
|
|
Title:
|
|
Chairman
|
Accepted and Agreed
as of the date first set forth above:
|
|
|
/s/ Albert Benchimol
|
|
Albert Benchimol
|
20
Exhibit 10.2
A
XIS
C
APITAL
H
OLDINGS
L
IMITED
2007 L
ONG
-T
ERM
E
QUITY
C
OMPENSATION
P
LAN
Employee Restricted Stock Agreement
You, Albert A. Benchimol, (the
“Participant”), have been granted a restricted stock award (the “Award”) of 500,000 ordinary shares, par value $0.0125 per share (the “Award Shares”), of AXIS Capital Holdings Limited, a Bermuda company (the
“Company”), pursuant to the AXIS Capital Holdings Limited 2007 Long-Term Equity Compensation Plan, as amended (the “Plan”). The date of grant of the Award (the “Award Date”) is as set forth in your restricted stock
account maintained on the Morgan Stanley Smith Barney Benefit Access website or such other website as may be designated by the Committee (“Benefit Access”).
By your acceptance of the grant of the Award on Benefit Access, you agree that the Award is granted under and governed by the terms and conditions of the Plan and this Restricted Stock Agreement (the
“Agreement”).
|
1.
|
GRANT OF RESTRICTED STOCK.
|
(a) Award.
On the terms and conditions set forth in this Agreement, the Company hereby grants to the Participant on the Award Date
the Award Shares.
(b) Plan and Defined Terms.
The Award is granted pursuant to the Plan, a copy of which the
Participant acknowledges having received. The terms and provisions of the Plan are incorporated into this Agreement by this reference. All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings
ascribed to them in the Plan.
Subject to Section 4, the Award Shares will be issued to the Participant and generally shall have the rights and privileges of a
shareholder of the Company.
|
3.
|
PERIOD OF RESTRICTION.
|
(i) The Award Shares shall be restricted during the period (the “Period of Restriction”) commencing on the Award Date and
expiring on the first to occur of:
(a)
The vesting of the Award Shares. The Award Shares shall vest as follows:
(I) Fifty percent (50%) of the Award Shares shall vest in three equal installments on the first, second and third
anniversary of the Award Date; provided, that if the Award Shares are not evenly devisable by three, then no fractional shares shall vest and the installments shall be as equal as possible with any smaller installments vesting first; and
(II) The remaining fifty percent of the Award Shares will be eligible to vest on the third
anniversary of the Award Date, provided, that the three-year growth in diluted book value per share of the Company, measured as of March 31, 2015, is greater than the median of the Company’s peer group (with such peer group being the same
peer group as set forth in the Company’s proxy statement filed with the Securities and Exchange Commission on March 22, 2012).
(b)
The Participant’s death or permanent Disability; or
(c)
The date of the Participant’s termination without Cause or termination for Good Reason, in each case, within 24 months following a Change in Control.
(d)
Definitions. As used herein, the following terms shall have the meanings set forth below:
1) “
Cause
” shall have the meaning set forth in the Participant’s employment agreement with the Company, if any, or in the absence of an employment agreement definition shall mean
(A) any act or omission which constitutes a material breach by the Participant of the terms of his or her employment, (B) the Participant’s conviction of a felony or commission of any act which would rise to the level of a felony,
(C) the Participant’s conviction or commission of a lesser crime or offense that adversely impacts or potentially could impact upon the business or reputation of the Company and/or affiliates and subsidiaries in a material way,
(D) the Participant’s willful violation of specific lawful directives of the Company, (E) the Participant’s commission of a dishonest or wrongful act involving fraud, misrepresentation, or moral turpitude causing damage or
potential damage to the Company and/or its affiliates and subsidiaries, (F) the Participant’s willful failure to perform a substantial part of the Participant’s duties or (G) the Participant’s breach of fiduciary duty.
(2) “
Good Reason
” shall have the meaning set forth in the Participant’s employment agreement with the
Company, if any, or in the absence of an employment agreement definition shall mean (A) the scope of the Participant’s position, authority or duties with the Company is materially adversely changed, (B) the Participant’s
compensation is not paid or is materially reduced or there is a material adverse change in the Participant’s employee benefits or (C) the Participant is required by the Company to relocate to a place more than 50 miles from the
Participant’s current place of employment;
provided
that, in each case, “Good Reason” shall not exist unless the Participant provides the Company with written notice of the Participant’s intent to terminate employment as a
result of such event, providing the specific reasons therefore, and the Company does not make the necessary corrections within thirty days of receipt of the Participant’s written notice, following which the Participant may terminate his or her
employment for “Good Reason” within the ten days following expiration of such thirty day notice period.
2
(ii) Absent subsequent Committee action, the Award Shares will not automatically vest upon the
Participant’s Retirement.
(iii) Notwithstanding the foregoing, to the extent that the Participant is party to an employment agreement
with the Company that provides for vesting of the Participant’s restricted stock awards on an accelerated or otherwise more favorable basis as compared to the terms set forth in this Section 3, then the Award Shares shall vest pursuant to
the terms set forth in such employment agreement.
|
4.
|
RESTRICTIONS, VOTING RIGHTS AND DIVIDENDS.
|
(a) Restrictions.
During the Period of Restriction, the following restrictions shall apply: (i) the Award Shares may not be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated and (ii) the stock certificates, if any, representing the Award Shares shall be deposited with the Company or as the Committee may otherwise direct and the Participant shall not be entitled to delivery of a stock certificate. If
the Participant’s employment terminates during the Period of Restriction for any reason other than: (i) death or permanent Disability or (ii) without Cause or for Good Reason, in each case, within 24 months following a Change in
Control, the Award Shares shall be immediately repurchased by the Company for an aggregate repurchase price of US$1 (One United States Dollar) without liability or further action or obligation on the part of the Company. Upon the repurchase of any
Award Shares, any dividends and interest set aside thereon shall be transferred to the Company without further action by the Participant, and the Participant shall immediately thereby relinquish and cease to hold any right, title or interest to any
such dividends and interest.
(b) Voting Rights.
Participant shall be entitled to exercise full voting rights with
respect to the Award Shares during the Period of Restriction.
(c) Dividends.
Dividends shall be paid to Participant
with respect to the Award Shares during the Period of Restriction, to the extent declared by the Committee on the Company’s common stock. Any Dividends paid with respect to the Award Shares during the Period of Restriction will be held by the
Company, or a depository appointed by the Committee, for the Participant’s account, and interest may be paid on the amount of cash dividends held at a rate and subject to such terms as may be determined by the Committee. All cash or share
dividends so held, and any interest so paid, shall initially be subject to forfeiture as set forth in subsection 4(a) but shall become non-forfeitable and payable at upon the expiration or termination of the Period of Restriction.
(d) Leaves of Absence.
For any purpose under this Agreement, employment shall be deemed to continue while the Participant is on a
bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of employment for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).
3
|
5.
|
RESTRICTIONS ON TRANSFER.
|
(a) Transfer Restrictions.
Regardless of whether the offering and sale of Award Shares under the Plan have been registered under
the U.S. Securities Act of 1933, as amended (the “Securities Act”) or otherwise, the Company, in its sole discretion, may impose restrictions upon the sale, pledge or other transfer of such Award Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary in order to achieve compliance with the Company’s Bye-Laws, the Securities Act, the
U.S. Securities Exchange Act of 1934, as amended, the securities laws of any country or state or any other applicable law, rule or regulation.
(b) Legends.
All certificates evidencing Award Shares issued under this Agreement shall bear such restrictive legends as are required or deemed advisable by the Company under the provisions of any
applicable law, rule or regulation. If, in the opinion of the Company and its counsel, any legend placed on a stock certificate representing Award Shares issued under this Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same number of Award Shares but without such legend.
|
6.
|
MISCELLANEOUS PROVISIONS.
|
(a) Bye-Laws.
All Award Shares acquired pursuant to this Agreement shall be subject to any applicable restrictions contained in the
Company’s Bye-Laws.
(b) No Retention Rights.
Nothing in this Agreement or in the Plan shall confer upon the
Participant any right to continue employment for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or any Affiliate employing or retaining the Participant or of the Participant, which rights
are hereby expressly reserved by each, to terminate his or her employment at any time and for any reason, with or without Cause.
(c) Notice.
Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon delivery by hand, upon delivery by reputable express courier or, if the
recipient is located in the United States, upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the
Participant at the address that he or she most recently provided in writing to the Company.
(d) Choice of Law.
This
Agreement shall be governed by, and construed in accordance with, the laws of Bermuda.
4
(e) Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(f)
Modification or Amendment.
This Agreement may be amended or modified by the Committee;
provided
that any amendment or modification that would adversely effect the Participant’s rights with respect to the Award must be made by written
agreement executed by the parties hereto; and
provided
, that the adjustments permitted pursuant to Section 4(b) and 7(c) of the Plan may be made without such written agreement.
(g) Severability.
In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.
5
Exhibit 10.3
AMENDMENT NO. 5
to
EMPLOYMENT AGREEMENT
dated December 15, 2003
by and between
AXIS Specialty Limited (the “Company”)
and
John R. Charman (the “Executive”)
Dated May 3, 2012
WHEREAS, the Company and the Executive entered into an amended and restated employment agreement dated as of December 15, 2003 (the
“Agreement”);
WHEREAS, the Company and the Executive entered into Amendment No. 1 to the Agreement as of October 23,
2007;
WHEREAS, the Company and the Executive entered into Amendment No. 2 to the Agreement as of February 19, 2008;
WHEREAS, the Company and the Executive entered into Amendment No. 3 to the Agreement as of May 20, 2008;
WHEREAS, the Company and the Executive entered into Amendment No. 4 to the Agreement as of December 31, 2010; and
WHEREAS, the Compensation Committee of the Board of Directors of AXIS Capital Holdings Limited, the Company and the Executive have determined that it is
in the best interests of the Company and its shareholders to revise the Agreement in order to change Executive’s title from President and Chief Executive Officer to Chairman of the Board of Directors;
NOW, THEREFORE, the Agreement is hereby amended, effective as of May 3, 2012 as follows:
|
|
1.
|
Section 2(a) of the Agreement, as amended (General), is hereby modified by inserting “Chairman of the Board of Directors” in lieu of “President and
Chief Executive Officer” in the first sentence thereof.
|
|
|
2.
|
Section (i)(C) of
Exhibit B
to the Agreement, as amended (Good Reason), is hereby modified by inserting “Chairman of the Board of Directors” in lieu of
“President and Chief Executive Officer” in the first sentence thereof.
|
|
|
3.
|
Except as set forth herein, all other terms and conditions of the Agreement (as previously amended) shall remain in full force and effect.
|
[signatures on following page]
2
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above.
|
|
|
|
|
AXIS Specialty Limited
|
|
|
|
|
By:
|
|
/s/ Michael A. Butt
|
|
|
|
|
|
Name: Michael A. Butt
|
|
Title: Chairman
|
|
|
|
|
|
|
|
Executive
|
|
|
|
/s/ John R. Charman
|
|
John R. Charman
|
3
Exhibit 10.4
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and
Release (“Agreement”) is entered into as of this 3
rd
day of May, 2012, between AXIS Specialty Limited (the “Company”) and Michael A. Butt (the “Executive”).
The Executive and the Company agree as follows:
|
1.
|
In connection with Executive’s retirement, the employment relationship between the Executive and the Company will terminate as of the date hereof (the
“Termination Date”). Effective on the Termination Date, the Executive will resign all officer positions with the Company and its Affiliates (as defined below).
|
|
2.
|
In consideration of the covenants of the Executive and the release of claims by the Executive contained herein, the Company shall pay, or provide benefits to, the
Executive as set forth below. Executive and Company hereby agree that these payments are in lieu of any and all amounts that Executive might otherwise claim from the Company or its Affiliates and, pursuant to Section 17 of the Service Agreement
dated December 15, 2003 by and between Executive and the Company, as amended (the “Service Agreement”), Executive hereby waives any claim of right to any payment, right or benefit under the Service Agreement (including, without
limitation, under Section 8 thereof) other than those set forth in this Separation Agreement. Provided that Executive has executed and delivered to the Company the General Release and Waiver set forth as
Exhibit A
hereto, and provided
further that the statutory period during which Executive is entitled to revoke the General Release and Waiver has expired without revocation, the Company will make these payments on the schedule set forth herein:
|
|
|
(a)
|
3,204,674 U.S. Dollars, payable in a lump sum no later than sixty (60) days following the Termination Date;
|
|
|
(b)
|
the Executive shall be reimbursed for business expenses reasonably incurred by him prior to the Termination Date in accordance with the Company’s expense
reimbursement program;
|
|
|
(c)
|
notwithstanding the terms of any applicable award agreements, all outstanding and unvested stock options and restricted stock granted to the Executive under AXIS
Capital Holdings Limited’s (the “Parent”) equity-based incentive compensation plans (a complete list of which is attached hereto as
Exhibit B
) shall continue to vest on the applicable dates set forth in the applicable award
agreements granting such shares, as if no termination of employment or service had occurred;
|
|
|
(d)
|
the Executive will be entitled to elect medical benefit plan coverage (including dental and vision benefits if provided under the applicable plans)
continuation for the Executive (and the Executive’s dependents, if any) for a period up and until December 31, 2013 under the Company’s medical benefit plans or similar plans upon substantially the same terms and conditions as is then
in existence for other executives during the coverage period; provided, however, that, in the event the Executive becomes
|
|
|
reemployed with another employer and becomes eligible to receive medical benefits from such employer, the medical benefits described herein shall immediately cease; and further provided that the
Executive shall pay the full premium cost thereof;
|
|
|
(e)
|
the Executive’s vested accrued benefits under the Company’s pension and deferred compensation plans shall be paid to the Executive in accordance with the
terms of such plans; and
|
|
|
(f)
|
Executive’s current 2012 flight benefits for personal use of Company aircraft will continue up and until December 31, 2012.
|
|
3.
|
The Executive acknowledges and agrees that he is not entitled to any salary, bonuses, long-term or short-term incentive compensation or other compensation, payments,
rights or benefits of any kind in respect of his employment with the Company and/or other positions with its Affiliates, the termination of such employment and/or other positions, or under any of the compensation or benefit plans of the Company or
its Affiliates, except as provided by this Agreement or under any benefit or equity plan or arrangement or as indemnification or director and officers liability insurance coverage or in connection with service as a non-executive director on the
boards of directors of the Company or its Affiliates.
|
|
4.
|
At all times hereafter, (i) the Executive agrees not to make any disparaging statements about the Company, its Affiliates or their current or former officers,
directors and/or employees, to anyone, including but not limited to the Company’s customers, competitors, suppliers, employees, former employees or the press or other media, and (ii) at all times hereafter, the Company agrees that it shall
not make any disparaging statements about the Executive to anyone, except, in either case, if placed under legal compulsion to do so by a court or other governmental authority or such statements are normal competitive type statements or rebuttal of
statements by the other.
|
|
|
|
|
|
|
|
5.
|
|
(a)
|
|
The Executive covenants that he shall not, without the prior written consent of the Company, use for the Executive’s own benefit or the benefit of any other person or entity
other than the Company and its Affiliates or disclose to any person, other than an employee of the Company or other person to whom disclosure is made in the course of the performance by the Executive of his duties under that certain Consulting
Agreement between the parties hereto dated contemporaneously herewith (the “Consulting Agreement”) (the disclosure of which shall be governed by the terms contained therein), any confidential, proprietary, secret or privileged information
about the Company or its Affiliates or their business or operations, including, but not limited to, information concerning trade secrets, know-how, software, data processing systems, policy language and forms, inventions, designs, processes,
formulae, notations, improvements, financial information, business plans, prospects, referral sources, lists of suppliers and customers, legal advice and other information with respect to the affairs, business, clients, customers, agents or other
business relationships of the Company or its Affiliates. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret, confidential, proprietary or privileged information or data relating to the Company or any of its
Affiliates or predecessor companies, and their respective businesses, which
|
2
|
|
|
|
|
|
|
|
|
|
|
shall have been obtained by the Executive during his employment, unless and until such information has become known to the public generally (other than as a result of unauthorized
disclosure by the Executive) or unless he is required to disclose such information by a court or by a governmental body with apparent authority to require such disclosure. The foregoing covenant by the Executive shall be without limitation as to
time and geographic application. The Executive acknowledges and agrees that he shall have no authority to waive any attorney-client or other privilege without the express prior written consent of the Company, as evidenced by the signature of the
Parent’s General Counsel.
|
|
|
(b)
|
For the avoidance of doubt, all trademarks, policy language or forms, products or services (including products and services under development), trade names, trade
secrets, service marks, designs, computer programs and software, utility models, copyrights, know-how and confidential information, applications for registration of any of the foregoing and the right to apply for them in any part of the world
(whether any of the foregoing shall be registered or unregistered) created or discovered or participated in by the Executive during the course of his employment or under the instructions of the Company or its Affiliates are and shall be the absolute
property of the Company and its Affiliates, as appropriate. Without limiting the foregoing, the Executive hereby assigns to the Company any and all of the Executive’s right, title and interest, if any, pertaining to insurance and reinsurance,
risk assumption, risk management, brokerage, financial and other products or services developed or improved upon by the Executive (including, without limitation, any related “know-how”) while employed by the Company or its Affiliates,
including any patent, trademark, trade name, copyright, ownership or other right that may pertain thereto.
|
|
|
(c)
|
Since the Executive has obtained in the course of the Executive’s employment with the Company and its Affiliates knowledge of trade names, trade secrets, know-how,
products and services (including products and services under development), techniques, methods, lists, computer programs and software and other confidential information relating to the Company and its Affiliates, and their employees, clients,
business or business opportunities, the Executive hereby undertakes that for the period from the date hereof through the first anniversary of the Termination Date without the prior written consent of the Company:
|
|
|
(i)
|
the Executive will not (either alone or jointly with or on behalf of others and whether directly or indirectly) encourage, entice, solicit or endeavor to encourage,
entice or solicit away from employment with the Company or its Affiliates, or hire or cause to be hired, any employee of the Company or its Affiliates, or encourage, entice, solicit or endeavor to encourage, entice or solicit any such officer or
employee to violate the terms of any employment agreement or arrangement between such individual and the Company or any of its Affiliates, provided that the foregoing shall not be violated by advertising not specifically targeted at the foregoing
persons or by serving as a personal referral at any such person’s request to any entity with which Executive is not associated;
|
3
|
|
(ii)
|
the Executive will not (either alone or jointly with or on behalf of others and whether directly or indirectly) interfere with or disrupt or seek to interfere with or
disrupt (A) the relationships between the Company and its Affiliates, on the one hand, and any customer or client of the Company and its Affiliates, on the other hand, (including any insured or reinsured party) who during the period of
twenty-four months immediately preceding such termination shall have been such a customer or client, or (B) the supply to the Company and its Affiliates of any services by any supplier or agent or broker who during the period of twenty-four
months immediately preceding such termination shall have supplied services to any such person, nor will the Executive interfere or seek to interfere with the terms on which such supply or agency or brokering services during such period as aforesaid
have been made or provided; and
|
|
|
(iii)
|
the Executive will not (either alone or jointly with or on behalf of others and whether directly or indirectly) whether as an employee, consultant, partner, principal,
agent, distributor, representative or stockholder (except solely as a less than one percent stockholder of a publicly traded company), engage in any activities in Bermuda, the United States or greater London if such activities are competitive with
the businesses that (i) are then being conducted by the Company or its Affiliates and (ii) during the period of the Executive’s employment were either being conducted by the Company or its Affiliates or actively being developed by the
Company or its Affiliates.
|
|
|
(d)
|
For purposes of this Agreement, an “Affiliate” of the Company includes any person, directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with the Company, and such term shall specifically include, without limitation, the Company’s majority-owned subsidiaries.
|
|
|
(e)
|
The limitations on the Executive set forth in this Section shall also apply to any agent or other representative acting on behalf of the Executive.
|
|
|
(f)
|
While the restrictions aforesaid are considered by both parties to be reasonable in all the circumstances, it is recognized that restrictions of the nature in question
may fail for reasons unforeseen and accordingly it is hereby declared and agreed that if any of such restrictions or the geographic, duration or other scope thereof shall be adjudged to be void as going beyond what is reasonable in the circumstances
for the protection of the interests of the Company and its Affiliates but would be valid if part of the wording thereof were deleted and/or the periods (if any) thereof reduced and/or geographic or other area dealt with thereby reduced in scope then
said restrictions shall apply with such modifications as may be necessary to make them valid and effective.
|
|
|
(g)
|
The Executive acknowledges that the Company and its Affiliates will suffer irreparable injury, not readily susceptible of valuation in monetary
damages, if the Executive breaches his obligations under Section 5 hereof. Accordingly, the Executive agrees that the Company and its Affiliates will be entitled, in addition to any other available remedies, to obtain injunctive relief against
any breach or prospective breach by the
|
4
|
|
Executive of his obligations under Section 5 hereof in any Federal or state court sitting in the City and State of New York or court sitting in Bermuda or the United Kingdom, or, at the
Company’s or any Affiliate’s election, in any other jurisdiction in which the Executive maintains his residence or his principal place of business. The Executive hereby submits to the non-exclusive jurisdiction of all those courts for the
purposes of any actions or proceedings instituted by the Company or its Affiliates to obtain such injunctive relief or otherwise enforce this Agreement, and the Executive agrees that process in any or all of those actions or proceedings may be
served by registered mail or delivery, addressed to the last address of the Executive known to the Company or its Affiliates, or in any other manner authorized by law. The Executive further agrees that, in addition to any other remedies available to
the Company or its Affiliates by operation of law or otherwise, because of any breach by the Executive of his obligations under Section 5 hereof he will forfeit any and all rights to any payments, distributions or benefits to which he might
otherwise then be entitled by virtue of this Agreement and such payments, distributions or benefits may be suspended so long as any good faith dispute with respect thereto is continuing.
|
|
6.
|
Promptly after the Termination Date (or such other date specified by the Company in a written notice to the Executive), the Executive shall return all property of the
Company and its Affiliates in the Executive’s possession or control, including, but not limited to, the Company’s credit, telephone, identification and similar cards, keys, cellular phones, computer equipment, software and peripherals and
originals and copies of books, records, and other information pertaining to the business of the Company or its Affiliates; provided, however, that the Executive shall be permitted to retain any such property that is necessary to perform the services
required under the Consulting Agreement or in Executive’s capacity as a non-executive director for the Company or its affiliates, and the return of such property shall be governed by the terms of the Consulting Agreement.
|
|
7.
|
The Executive shall, at the request of the Company, reasonably cooperate with the Company in the defense and/or investigation of any third party claim, dispute or any
investigation or proceeding, whether actual or threatened, including, without limitation, meeting with attorneys and/or other representatives of the Company to provide reasonably requested information regarding same and/or participating as a witness
in any litigation, arbitration, hearing or other proceeding between the Company or an Affiliate and a third party or any government body with regard to matters related to Executive’s employment period with the Company. The Company shall
reimburse the Executive for all reasonable expenses and costs incurred by him in connection with such assistance including, without limitation, reasonable travel expenses.
|
|
8.
|
This Agreement shall be governed by and construed in accordance with the laws of New York, without reference to the principles of conflict of laws thereof.
|
|
9.
|
The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld therefrom
pursuant to any applicable law or regulation.
|
5
|
10.
|
This Agreement represents the complete agreement between the Executive and the Company concerning the subject matter in this Agreement and supersedes all prior
agreements or understandings, written or oral, including the Service Agreement; provided, however, that the parties hereto acknowledge and agree that the covenants contained in Section 5(c) hereof are in addition to, and not in lieu of, any
similar covenants contained in the Consulting Agreement, and that the Company shall be entitled to enforce either or both sets of covenants in its sole discretion. This Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal representatives.
|
|
11.
|
Each of the sections contained in this Agreement shall be enforceable independently of every other section in this Agreement, and the invalidity or nonenforceability of
any section shall not invalidate or render unenforceable any other section contained in this Agreement.
|
|
12.
|
This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal and legal representatives, executors, administrators, heirs,
distributees, devisees and legatees. If the Executive dies while any amounts are still payable to his 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.
|
|
13.
|
Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or sent by
courier, or by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such arty may subsequently by similar process give notice of:
|
If to the Company:
AXIS Specialty Limited
92 Pitts Bay Road
AXIS House
Pembroke HM 08 Bermuda
Attention: General Counsel
If to the Executive:
To the last address delivered to the
Company by the Executive in the
Manner set forth herein.
|
14.
|
This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
|
6
The parties to this Agreement have executed this Agreement as of the day and year first written above.
|
|
|
|
|
Executive
|
|
|
|
|
By
|
|
/s/ Michael A. Butt
|
|
|
|
|
|
Name:
|
|
Michael A. Butt
|
|
Title:
|
|
Chairman
|
|
|
|
|
|
|
|
AXIS Specialty Limited
|
|
|
|
|
By
|
|
/s/ John R. Charman
|
|
|
|
|
|
Name: John R. Charman
|
|
Title: Chief Executive Officer
|
7
Exhibit A
GENERAL RELEASE AND WAIVER
In consideration of the payment by AXIS Capital Holdings Limited (the “Company”) to or for the benefit of Michael A. Butt of the payments and benefits set forth in that certain Separation
Agreement and Release by and between Michael A. Butt (“Executive”) and AXIS Specialty Limited dated May 3, 2012 (the “Separation Agreement”), and in compliance with the terms of the Separation Agreement, Executive hereby
makes and delivers to the Company this General Release and Waiver (“Release”) as set forth herein:
|
1.
|
Release of All Claims.
|
Executive voluntarily, knowingly and willingly on behalf of himself, his heirs, executors, administrators, successors and assigns, hereby irrevocably and unconditionally releases the Company, its parents,
their subsidiaries, divisions and affiliates, together with their respective owners, assigns, agents, directors, partners, officers, employees, consultants, shareholders, attorneys and representatives, and any of their predecessors and successors
and each of their estates, heirs and assigns (collectively, the “Company Releasees”) from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, causes of action, rights, costs, losses, debts and expenses
of any nature whatsoever, known or unknown, which he or his heirs, executors, administrators, successors or assigns ever had, now have or hereafter can, will or may have (either directly, indirectly, derivatively or in any other
representative capacity) against the Company or any of the other Company Releasees by reason of any matter, cause or thing whatsoever arising on or before the date this Release is executed by Executive. In addition, this Release includes, without
limitation, any rights or claims relating in any way to any and all employment relationships between Executive and the Company or any of the Company Releasees, or the termination thereof, arising under the Employment Act 2000 of Bermuda, the Human
Rights Act 1981 of Bermuda, Title VII of the Civil Rights Act of 1964, Sections 1981 through 1988 of Title 42 of the United States Code, The Employee Retirement Income Security Act of 1974 (“ERISA”) (except for any vested benefits under
any tax qualified benefit plan), The Immigration Reform and Control Act, The Americans with Disabilities Act of 1990, The Age Discrimination in Employment Act of 1967 (“ADEA”), The Workers Adjustment and Retraining Notification Act, The
Fair Credit Reporting Act, New York State Human Rights Law, New York Human Rights Law, New York Rights of Persons With Disabilities, New York Confidentiality of Records of Genetic Tests, New York Whistleblower Law, New York Statutory Provision
Regarding Retaliation/Discrimination for Filing a Workers’ Compensation Claim, New York Adoptive Parents’ Child Care Leave Law, New York Smokers’ Rights Law, New York Equal Pay Law, New York AIDS Testing Confidentiality Act, New York
Nondiscrimination Against Genetic Disorders Law, New York Bone Marrow Leave Law, New York Equal Rights Law, New York Confidentiality of Records of Genetic Tests, New York Executive Law Section 290 et seq., The New York State Labor Relations
Act, the general regulations of the New York State Division of Human Rights, The New York Labor Law, The New York Wage Hour and Wage Payment Laws, The New York Minimum Wage Law, as amended, The New York City Administrative Code, New York State
Public Employee Safety and Health Act, New
8
York Executive Law §290
et
seq
., the New York City Charter and Administrative Code, New York Labor Law §740
et
seq
., the New York Legal Activities Law, New
York Labor Law §201-d, the New York occupational safety and health laws, and any other federal, state or local law, statute, rule, regulation, or ordinance, any public policy, contract, tort, or common law whether of any state in the United
States or Bermuda; or any basis for recovering costs, fees, or other expenses including attorneys’ fees incurred in these matters. Executive is not waiving, and shall not be deemed to have waived, claims for indemnity or contribution that
survive the termination of the Employment Agreement or allowable under the Company’s Bye-Laws.
|
2.
|
Acknowledgements and Affirmations.
|
|
|
a.
|
Executive affirms and agrees that the Company has fulfilled all of its obligations to him under Bermuda employment law, including without limitation the Employment
Act 2000 as may be amended from time to time, and has not violated his rights under Bermudan employment law. Executive affirms and acknowledges that the payments made under the Separation Agreement fully, fairly and finally compensate him for any
and all monies that may be due or become to him under Bermuda law in connection with his employment or termination of his employment, including without limitation any severance allowance or repatriation expenses.
|
|
|
b.
|
By signing this Release, Executive represents that Executive has not commenced or joined in any claim, charge, action or proceeding whatsoever against the Company
or any of the Company Releasees. Executive further represents that he will not be entitled to any personal recovery in any action or proceeding of any nature whatsoever against the Company or any of the other Company Releasees that may be commenced
on his behalf arising out of any of the matters released hereby.
|
|
|
c.
|
Executive agrees and acknowledges that the Company has fully satisfied any and all obligations owed him to arising out of his employment with the Company (or the
termination thereof), and no further sums are owed to him by the Company except as expressly provided in the Separation Agreement.
|
|
|
d.
|
Executive affirms he has been granted any leave to which he was entitled under the Employment Act 2000 of Bermuda, the Family and Medical Leave Act or similar state or
local leave or disability accommodation laws. Executive further affirms that he has no known workplace injuries or occupational diseases.
|
|
3.
|
Return and Possession of Property.
|
In each case, except as contemplated under the Separation Agreement and Consulting Agreement (as defined in the Separation Agreement), Executive affirms that he (i) has returned all of the
Company’s property, documents, and/or any confidential information in his possession or control, and (ii) is in possession of all of his property that he had at the Company’s premises and that the Company is not in possession of any
of his property.
9
|
4.
|
No Admission by Company.
|
The Company’s acceptance and acknowledgement of this Release and the payments and benefits set forth herein are not, and shall not be construed as, any admission of liability or wrongdoing on the
part of the Company or any of the Company Releasees.
EXECUTIVE IS ADVISED THAT HE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER THIS RELEASE. EXECUTIVE ALSO IS ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO HIS SIGNING OF THIS RELEASE.
EXECUTIVE MAY REVOKE THIS RELEASE FOR A PERIOD OF SEVEN (7) CALENDAR DAYS FOLLOWING THE DAY HE SIGNS THIS RELEASE.
ANY REVOCATION WITHIN THIS PERIOD MUST BE SUBMITTED, IN WRITING, TO RICHARD T. GIERYN, JR., GENERAL COUNSEL, AND STATE, “I HEREBY REVOKE MY ACCEPTANCE OF THE RELEASE.” THE REVOCATION MUST BE PERSONALLY DELIVERED TO RICHARD T. GIERYN, JR.
OR HIS/HER DESIGNEE, OR MAILED TO RICHARD T. GIERYN, JR. AND POSTMARKED WITHIN SEVEN (7) CALENDAR DAYS AFTER EXECUTIVE SIGNS THIS RELEASE.
EXECUTIVE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS GENERAL RELEASE, DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL UP TO TWENTY-ONE (21) CALENDAR DAY CONSIDERATION
PERIOD.
EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS RELEASE INTENDING TO WAIVE,
SETTLE AND RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST RELEASEES.
|
6.
|
No Assignment; Intended Beneficiaries.
|
This Agreement is personal to Executive and may not be assigned by Executive. This Agreement inures and will inure to the benefit of the Company and the other Company Releasees.
|
7.
|
Modification and Waiver.
|
This Agreement may not be changed orally, but may be changed only in a writing that expressly refers to this Agreement and that is signed by Executive and by a duly authorized representative of the
Company. The failure of Executive or the Company to enforce any of the terms, provisions or covenants of this Agreement will not be construed as a waiver of the same or of the right of such party to enforce the same. Waiver by Executive or the
Company of any breach or default by the other party of any term or provision of this Release will not operate as a waiver of any other breach or default.
10
The Section headings contained herein are for reference purposes only and will not in any way affect the meaning or interpretation of this Release.
It is the desire and intent of the parties that the provisions of this Release shall be enforced to the fullest extent permissible. In the
event that any one or more of the provisions of this Release is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder hereof will not in any way be affected or impaired thereby and any such
provision or provisions will be enforced to the fullest extent permitted by law.
|
10.
|
Each Party the Drafter.
|
This Release, and the provisions contained in it, shall not be construed or interpreted for, or against, any party to this Release because that party drafted or caused that party’s legal
representatives to draft any of its provisions.
This Release shall be governed by, and construed and enforced in accordance with, the laws of New York, without reference to its
choice of law rules. The parties hereby irrevocably consent to the jurisdiction of New York and courts located in New York for purposes of resolving any dispute under this Release and expressly waive any objections as to venue in any such courts.
Executive affirms and acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to execute and deliver this Release,
except for those set forth in or expressly referenced herein.
11
Now therefore, intending to be fully and irrevocably bound by the terms hereof,
Executive has executed this Release and has delivered it to AXIS Specialty Limited as of this 3
rd
day of May, 2012.
Executed and delivered by:
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
By:
|
|
/s/ Michael A.
Butt
|
|
|
|
|
|
Name:
|
|
Michael A. Butt
|
|
Title:
|
|
Chairman
|
|
|
|
Accepted by:
|
|
|
|
AXIS SPECIALTY LIMITED
|
|
|
|
|
|
Name:
|
|
John R. Charman
|
|
Title:
|
|
Chief Executive Officer
|
12
Exhibit B
Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
Granted
|
|
|
Outstanding
|
|
|
Grant Price
|
|
|
Expiration
|
|
30-Sep-2002
|
|
|
80,000
|
|
|
|
80,000
|
|
|
$
|
12.65
|
|
|
30-Sept-2012
|
|
12-Dec-2002
|
|
|
40,000
|
|
|
|
40,000
|
|
|
$
|
14.50
|
|
|
12-Dec-2012
|
|
02-Jan-2004
|
|
|
55,000
|
|
|
|
55,000
|
|
|
$
|
29.62
|
|
|
3-May-2013¹
|
|
13-Jan-2005
|
|
|
55,000
|
|
|
|
55,000
|
|
|
$
|
28.02
|
|
|
3-May-2013¹
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
230,000
|
|
|
|
230,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
¹
|
Options expire 12 months after retirement.
|
Restricted Shares
|
|
|
|
|
|
|
Award Date
|
|
Unvested
|
|
|
09-Feb-2009
|
|
|
11,250
|
|
|
08-Feb-2010
|
|
|
37,500
|
|
|
01-Jan-2011
|
|
|
75,000
|
|
|
07-Feb-2011
|
|
|
56,250
|
|
|
06-Feb-2012
|
|
|
150,000
|
|
|
|
|
|
|
|
|
Total
|
|
|
330,000
|
|
|
|
|
|
|
|
13
Exhibit 10.5
CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of May 3, 2012, by and between
AXIS Specialty Limited, a Bermuda company and wholly-owned subsidiary of AXIS Capital Holdings Limited (“Parent”) and Michael A. Butt (the “
Consultant
”), an individual.
WHEREAS, the Consultant previously was employed by the Company as the Chairman of the Board of Parent; and
WHEREAS, the Company desires to retain the services of the Consultant, and the Consultant desires to be retained by the Company, subject to and in
accordance with the terms and conditions set forth herein; and
WHEREAS, the Consultant and the Company have agreed to the noncompetition,
nonsolicitation and confidentiality provisions set forth herein.
NOW, THEREFORE, in consideration of the conditions and covenants set forth
herein, the parties hereto hereby agree as follows:
|
1.
|
Agreement
. The Company hereby retains the Consultant as a consultant to the Company on and subject to the terms and conditions set forth herein, and the
Consultant hereby accepts such consultancy, on and subject to such terms and conditions.
|
|
2.
|
Consulting Services
. During the Consulting Term (as defined below), the Consultant shall provide such consulting services to the Company commensurate with his
status and experience as the former Chairman of the Board of the Parent with respect to such matters as shall be reasonably requested from time to time by the Chief Executive Officer of the Company, including the services set forth in the attached
Appendix A
. The Company and the Consultant intend that the Consultant’s services pursuant to this Agreement will average no less than 45 hours per month. The Consultant shall not, by virtue of the consulting services provided hereunder,
be considered an officer or employee of the Company, and he shall have no power or authority to contract in the name of or bind the Company or its Affiliates. The Consultant shall be free at all times to arrange the time and manner of performance of
the consulting services described herein. As an independent contractor, the mode, manner, method and means used by the Consultant in the performance of services shall be of the Consultant’s selection and under the sole control and direction of
the Consultant. The Consultant shall be responsible for all risks incurred in the operation of the Consultant’s business and shall enjoy all the benefits thereof. In addition, the Consultant will comply, at the Consultant’s own expense,
with the provisions of all applicable laws, regulations, ordinances, requirements, and codes which are applicable to the performance of services hereunder. The forgoing requirement includes, but is not limited to, all applicable laws relating to
employment discrimination.
|
|
3.
|
Consulting Fee
. Consultant shall receive no fee for the May 4, 2012 – December 31, 2012 portion of the Consulting Term. During
the January 1, 2013 – December 31, 2013 portion of the Consulting Term, in consideration of the services to be provided by the Consultant to the
|
|
|
Company described herein and in consideration for the covenants of the Consultant set forth herein, the Company shall pay the Consultant a fee in the amount of $950,000, payable in the amount of
$237,500 no later than the end of each of January 1, April 1, July 1 and October 1, 2013. The Company will pay all applicable Bermuda payroll taxes attributable to Consultant’s services during the Consulting Term.
The Consultant shall not be entitled to participate in any employee benefit plans maintained by the Company or any of its Affiliates by reason of this Agreement.
|
|
4.
|
Consulting Term
. The period during which the Consultant will be retained by the Company to provide the consulting services hereunder shall commence on
May 4, 2012 and shall terminate on December 31, 2013, unless sooner terminated as provided in this Section 4 (the “
Consulting Term
”). Notwithstanding the foregoing, the Consulting Term will end on the date of the
Consultant’s death or termination of service due to his Disability (as defined below), and the Consulting Term may be terminated by the Company for Cause (as defined below). For purposes of this Agreement, the term “
Cause
”
shall mean the Consultant’s (a) fraud or dishonesty in connection with the performance or provision by the Consultant of his services under this Agreement, (b) material breach of any of the terms of this Agreement or (c) the
Consultant’s conviction of, or plea of
nolo contendere
to, a felony. For purposes of this Agreement, the term “
Disability
” means those circumstances where the Consultant has been unable to substantially provide his
services as described in this Agreement for at least 90 continuous days.
|
|
5.
|
Reimbursement of Expenses
. The Company shall reimburse the Consultant for all reasonable expenses incurred by him in the course of performing his services under
this Agreement (which expenses are consistent with the Company’s policies in effect from time to time with respect to travel and other business expenses), subject to the Company’s requirements with respect to reporting and documentation of
expenses.
|
|
6.
|
Office Space
. The Company shall provide Consultant with reasonable office accommodations, access to a computer workstation, administrative support and office
supplies.
|
|
7.
|
Personal Use of Company Aircraft
. Consultant shall be entitled to personal use of Company aircraft during the Consulting Term, subject to aircraft availability
at the discretion of the Company. Consultant shall be solely responsible for all variable operating costs for such aircraft use.
|
|
8.
|
Noncompetition and Nonsolicitation
. Since the Consultant has obtained in the course of his employment with the Company, and is likely to obtain in the
course of his service as a consultant hereunder, knowledge of trade names, trade secrets, know-how, products and services (including products and services under development), techniques, methods, lists, computer programs and software and other
confidential information relating to the Company and its Affiliates, and their employees, clients, business or business opportunities, the Consultant hereby undertakes that, during the period beginning on the date hereof and ending on
December 31, 2014:
|
|
|
(a)
|
the Consultant will not (either alone or jointly with or on behalf of others and whether directly or indirectly) encourage, entice, solicit or endeavor to encourage,
entice or solicit away from employment with the Company or its Affiliates, or hire or cause to be hired, any employee of the Company or its Affiliates, or encourage, entice, solicit or endeavor to encourage, entice or solicit any such officer or
employee to violate the terms of any employment agreement or arrangement between such individual and the Company or any of its Affiliates;
|
2
|
|
(b)
|
the Consultant will not (either alone or jointly with or on behalf of others and whether directly or indirectly) interfere with or disrupt or seek to interfere with or
disrupt (A) the relationships between the Company and its Affiliates, on the one hand, and any customer or client of the Company and its Affiliates, on the other hand, (including any insured or reinsured party) who during the period of
twenty-four months immediately preceding the date of this Agreement shall have been such a customer or client, or (B) the supply to the Company and its Affiliates of any services by any supplier or agent or broker who during the period of
twenty-four months immediately preceding the date of this Agreement shall have supplied services to any such person, nor will the Consultant interfere or seek to interfere with the terms on which such supply or agency or brokering services during
such period as aforesaid have been made or provided; and
|
|
|
(c)
|
the Consultant will not (either alone or jointly with or on behalf of others and whether directly or indirectly) whether as an employee, consultant, partner, principal,
agent, distributor, representative or stockholder (except solely as a less than one percent stockholder of a publicly traded company), engage in any activities in Bermuda, the United States or greater London if such activities are competitive with
the businesses that (i) are then being conducted by the Company or its Affiliates and (ii) during the period of the Consultant’s employment or consultancy were either being conducted by the Company or its Affiliates or actively being
developed by the Company or its Affiliates.
|
For purposes of this Agreement, an “
Affiliate
” of
the Company includes any person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Company, and such term shall specifically include, without limitation, the Company’s
majority-owned subsidiaries.
The limitations on the Consultant set forth in this Section 7 shall also apply to any agent
or other representative acting on behalf of the Consultant.
While the restrictions aforesaid are considered by both parties to
be reasonable in all the circumstances it is recognized that restrictions of the nature in question may fail for reasons unforeseen and accordingly it is hereby declared and agreed that if any of such restrictions or the geographic, duration or
other scope thereof shall be adjudged to be void as going beyond what is reasonable in the circumstances for the protection of the interests of the Company and its Affiliates but would be valid if part of the wording thereof were deleted and/or the
periods (if any) thereof reduced and/or geographic or other area dealt with thereby reduced in scope then said restrictions shall apply with such modifications as may be necessary to make them valid and effective.
3
|
9.
|
Confidential Information
. The Consultant covenants that he shall not, without the prior written consent of the Company, use for his own benefit or the benefit of
any other person or entity other than the Company and its Affiliates or disclose to any person, other than an employee of the Company or other person to whom disclosure is necessary to the performance by the Consultant of his duties as a consultant
to the Company, any confidential, proprietary, secret, or privileged information about the Company or its Affiliates or their business or operations, including, but not limited to, information concerning trade secrets, know-how, software, data
processing systems, policy language and forms, inventions, designs, processes, formulae, notations, improvements, financial information, business plans, prospects, referral sources, lists of suppliers and customers, legal advice and other
information with respect to the affairs, business, clients, customers, agents or other business relationships of the Company or its Affiliates (the “Confidential Information”). The Consultant shall hold in a fiduciary capacity for the
benefit of the Company all secret, confidential proprietary or privileged information or data relating to the Company or any of its Affiliates or predecessor companies, and their respective businesses, which shall have been obtained by the
Consultant during his employment or consultancy, unless and until such information has become known to the public generally (other than as a result of unauthorized disclosure by the Consultant) or unless he is required to disclose such information
by a court or by a governmental body with apparent authority to require such disclosure. The foregoing covenant by the Consultant shall be without limitation as to time and geographic application. The Consultant acknowledges and agrees that he shall
have no authority to waive any attorney-client or other privilege without the express prior written consent of the Management Development and Compensation Committee of the Company’s Board of Directors as evidenced by the signature of the
Company’s General Counsel.
|
|
10.
|
Return of Company Property
. The Consultant agrees that, upon the expiration or termination of the Consulting Term, he will immediately return to the Company all
materials containing or reflecting the Confidential Information and all copies, reproductions and summaries thereof, in his possession or under his control and shall erase all Confidential Information from all media in his possession or under his
control, and, if the Company so requests, shall certify in writing that he has done so. All Confidential Information is and shall remain the property of the Company or its Affiliates, as the case may be.
|
|
11.
|
Indemnification
. The Company shall indemnify the Consultant against expenses incurred and damages paid or payable by him with respect to claims based on actions
or failures to act by the Consultant in his capacity as a consultant under this Agreement, but not including expenses incurred or damages paid or payable by the Consultant arising out of his gross negligence or willful misconduct.
|
|
12.
|
Professional Liability Coverage
. Company will add Consultant as a named insured to the Company’s professional lines liability coverage for Consultant’s
services as a Consultant during the Consulting Term.
|
4
|
|
(a)
|
This Agreement constitutes the entire understanding of the Company and the Consultant with respect to the subject matter hereof and supersedes all prior understandings,
written or oral, with respect thereto; provided, however, that the parties hereto acknowledge and agree that the covenants contained in Section 7 hereof are in addition to, and not in lieu of, any similar covenants contained in that certain
Separation Agreement and Release between the parties hereto, entered into contemporaneously herewith, and that the Company shall be entitled to enforce either or both sets of covenants in its sole discretion. The terms of this Agreement may be
changed, modified or discharged only by an instrument in writing signed by the parties hereto. A failure of the Company or the Consultant to insist on strict compliance with any provision of this Agreement shall not be deemed a waiver of such
provision or any other provision hereof. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.
|
|
|
(b)
|
This Agreement shall be construed, enforced and interpreted in accordance with and governed by the laws of the State of New York, without regard to its conflict of laws
provisions.
|
|
|
(c)
|
This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.
|
|
|
(d)
|
Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or sent by
courier, or by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:
|
If to the Company:
AXIS Specialty Limited
92 Pitts Bay Road
AXIS House
Pembroke HM08 Bermuda
Attention: General Counsel
5
If to Consultant:
To the last address delivered to
The Company by the Consultant in
the manner set forth herein.
|
|
(e)
|
The Consultant and the Company agree that the Consultant is acting as an independent contractor to the Company for all purposes with regard to the performance of his
services hereunder during the Consulting Term. The Consultant shall be solely responsible for fulfilling when due any and all applicable income tax and self-employment tax obligations arising in connection with his consultancy for the Company.
Should the Company be required to pay any such tax or payment, the Consultant shall promptly reimburse the Company for such tax or payments, including any interest and penalties with respect thereto. Should it be determined that any payment
hereunder is subject to withholding of tax under applicable law, all payments to be made hereunder shall be net of applicable income, employment, social security or other taxes required to be withheld therefrom.
|
|
|
(f)
|
The Consultant acknowledges that the Company and its Affiliates will suffer irreparable injury, not readily susceptible of valuation in monetary damages, if the
Consultant breaches his obligations under Section 6 or 7 hereof. Accordingly, the Consultant agrees that the Company and its Affiliates will be entitled, in addition to any other available remedies, to obtain injunctive relief against any
breach or prospective breach by the Consultant of his obligations under Section 6 or 7 hereof in any Federal or state court sitting in the City and State of New York or court sitting in Bermuda or the United Kingdom, or, at the Company’s
or any Affiliate’s election, in any other jurisdiction in which the Consultant maintains his residence or his principal place of business. The Consultant hereby submits to the non-exclusive jurisdiction of all those courts for the purposes of
any actions or proceedings instituted by the Company or its Affiliates to obtain such injunctive relief or otherwise enforce this Agreement, and the Consultant agrees that process in any or all of those actions or proceedings may be served by
registered mail or delivery, addressed to the last address of the Consultant known to the Company or its Affiliates, or in any other manner authorized by law. The Consultant further agrees that, in addition to any other remedies available to the
Company or its Affiliates by operation of law or otherwise, because of any breach by the Consultant of his obligations under Section 6 or 7 hereof he will forfeit any and all rights to any payments to which he might otherwise then be entitled
by virtue of this Agreement and such payments may be suspended so long as any good faith dispute with respect thereto is continuing.
|
|
|
(g)
|
This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. No rights or obligations of the Consultant
under this Agreement may be assigned or transferred by him. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred pursuant to
a merger or consolidation or amalgamation or scheme of arrangement in which the
|
6
|
|
Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee assumes by operation of law or in writing duly executed by the assignee or transferee all of the liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law.
|
7
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized representative
and the Consultant has hereunto set his hand as of the day and year first above written.
|
|
|
|
|
Consultant
|
|
|
|
|
By
|
|
/s/ Michael A. Butt
|
|
Name: Michael A. Butt
|
|
|
|
AXIS Specialty Limited
|
|
|
|
|
By
|
|
/s/ John R. Charman
|
|
Name: John R. Charman
|
|
Title: Chief Executive Officer
|
8
Appendix A
Scope of Services
:
It is expected, that in the course of Mr. Butt’s Consulting
Term that, as a representative of the AXIS group, he will:
|
|
•
|
|
Serve as the Chairman of AXIS Re Limited, subject to due election and regulatory approval.
|
|
|
•
|
|
Attend and represent AXIS at key industry events as needed and requested by the Chief Executive Officer.
|
|
|
•
|
|
Act as a senior adviser to the Chief Executive Officer of AXIS Re.
|
|
|
•
|
|
Provide guidance and advice as to director, executive officer and senior manager professional development.
|
|
|
•
|
|
Advise and assist the Chairman of the Board as to Board and Committee matters as needed.
|
|
|
•
|
|
Provide assistance with regulatory agencies.
|
9