AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment
Agreement (this “Agreement”), is dated as of
o
, 2009 and is entered into between
Endurance Specialty Holdings Ltd. (the “Company”), and
[Executive] (the “Executive”).
WHEREAS, the Company and the
Executive entered into an Employment Agreement, dated as of
o
, 2007 (the “Original
Employment Agreement”) in order to embody the terms of the
Executive’s continued employment; and
WHEREAS, the Company and the
Executive desire to amend and restate the Original Employment
Agreement and the Executive desires to enter into this Agreement in
order to revise the terms and provisions of the Original Employment
Agreement.
NOW, THEREFORE, in consideration of
the premises and the mutual agreements contained herein, the
Company and the Executive hereby agree as follows:
ARTICLE I.
Definitions
1.1 “ Board ”
shall mean the Board of Directors of the Company.
1.2 “ Business ”
shall mean the brokerage, underwriting, advising or consulting of
or with respect to any line of property or casualty insurance or
reinsurance underwritten by the Company or any of its subsidiaries
or affiliates as an insurer or reinsurer during the
Term.
1.3 " Cause " shall
mean:
(a) any intentional act of fraud,
embezzlement or theft by the Executive in connection with his
duties hereunder or in the course of his employment hereunder or
the Executive's admission or conviction of, or plea of nolo
contendere to either, (i) a felony or (ii) a misdemeanor involving
moral turpitude, fraud, embezzlement, theft or
misrepresentation;
(b) any gross negligence or willful
misconduct of the Executive resulting in a loss to the Company or
any of its subsidiaries or affiliates;
(c) any breach by the Executive of
any one or more of the covenants contained in Section 5.2, 5.3, 5.4
or 5.5 hereof, provided the Executive has received 15 calendar
days’ prior written notice of such breach in accordance with
Section 7.3 of this Agreement; or
(d) any violation of any statutory
or common law duty of loyalty to the Company or any of its
subsidiaries or affiliates.
1.4 “ Change in Control
” shall mean:
(a) the acquisition by any
individual, entity or group (a "Person"), including any "person"
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of beneficial ownership within the meaning of Rule
13d-3 promulgated under the Exchange Act, of 50% or more of either
(i) the then outstanding ordinary shares, par value $1.00 per
share, of the Company (the "Outstanding Ordinary Shares") or (ii)
the combined voting power of the then outstanding securities of the
Company entitled to vote generally in the election of directors
pursuant to the Bye-Laws of the Company (the "Outstanding Voting
Securities"); excluding , however , the following:
(A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of an exercise, conversion
or exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company), (B)
any acquisition by the Company, (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of this
definition of Change in Control; provided , further ,
that for purposes of clause (B), if any Person (other than the
Company or any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company) shall become the beneficial owner of 50% or more of the
Outstanding Ordinary Shares or 50% or more of the Outstanding
Voting Securities by reason of an acquisition by the Company, and
such Person shall, after such acquisition by the Company, become
the beneficial owner of any additional Outstanding Ordinary Shares
or any additional Outstanding Voting Securities and such beneficial
ownership is publicly announced, such additional beneficial
ownership shall constitute a Change in Control;
(b) individuals who, as of the date
hereof, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board within a 24
month period; provided , that any individual who becomes a
director of the Company subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders,
was approved by the vote of at least a majority of the directors
then comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided , further , that any
individual who was initially elected as a director of the Company
as a result of an actual or threatened solicitation by a Person
other than the Board for the purpose of opposing a solicitation by
any other Person with respect to the election or removal of
directors, or any other actual or threatened solicitation of
proxies or consents by or on behalf of any Person other than the
Board shall not be deemed a member of the Incumbent
Board;
(c) the consummation of a
reorganization, amalgamation, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the
Company (a "Corporate Transaction"); excluding ,
however , a Corporate Transaction pursuant to which (i) all
or substantially all of the individuals or entities who are the
beneficial owners, respectively, of the Outstanding Ordinary Shares
and the Outstanding Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than 55% of, respectively, the outstanding shares
of common stock, and the combined voting power of the outstanding
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting
from such Corporate Transaction
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of
the Company's assets either directly or indirectly) in
substantially the same proportions relative to each other as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Ordinary Shares and the Outstanding Voting Securities,
as the case may be, (ii) no Person (other than: the Company; any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company; the
corporation resulting from such Corporate Transaction; and any
Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 50% or more of the
Outstanding Ordinary Shares or the Outstanding Voting Securities,
as the case may be) will beneficially own, directly or indirectly,
50% or more of, respectively, the outstanding shares of common
stock of the corporation resulting from such Corporate Transaction
or the combined voting power of the outstanding securities of such
corporation entitled to vote generally in the election of directors
and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate
Transaction; or
(d) the consummation of a plan of
complete liquidation or dissolution of the Company.
1.5 “ Change in Control
Period ” shall mean the period commencing three months
prior to the date of a Change in Control and ending on the first
annual anniversary of the date of a Change in Control.
1.6 “ Code ”
means the Internal Revenue Code of 1986, as amended.
1.7 “ Confidential
Information ” shall mean any confidential or proprietary
information, trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales
plans, manufacturing plans, management organization information,
operating policies or manuals, business plans, financial records,
packaging design or other financial, commercial, business or
technical information relating to the Company or any of its
divisions, subsidiaries or affiliates, or that the Company or any
of its divisions, subsidiaries or affiliates may have received
belonging to suppliers, customers or others who do business with
the Company or any of its divisions, subsidiaries or
affiliates.
1.8 " Date of Separation from
Service " shall mean the following:
(a) if the Executive's employment is
terminated for Cause, the date specified in the Notice of
Separation from Service;
(b) if the Executive's employment is
terminated by the Executive's death, the date of the Executive's
death;
(c) if the Executive's employment is
terminated for Disability, 15 calendar days after the Notice of
Separation from Service is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during such 15 calendar day period);
(d) if the Executive's employment is
terminated by the Executive with Good Reason, 30 calendar days
after the Notice of Separation from Service is given (provided that
the Company shall not have cured the event giving rise to the
Executive’s right to separation from service for Good Reason
during such 30 calendar day period);
(e) if the Executive’s
employment is terminated by the Company by delivery of a notice of
non-renewal of this Agreement pursuant to Section 3.1 with respect
to a Renewal Date occurring within a Change in Control Period, such
Renewal Date; and
(f) if the Executive's employment is
terminated by the Executive or the Company for any other reason,
the date specified in the Notice of Separation from Service (which,
in the case of a separation from service by the Executive, shall
not be less than 14 calendar days nor more than 30 calendar days
from the date such Notice of Separation from Service is
given).
1.9 “ Disability
” shall mean any condition which (i) prevents the Executive
from substantially performing his duties under this Agreement for a
period of at least 120 consecutive days, or 180 non-consecutive
days within any 365-day period, and (ii) causes the Executive to
become eligible for the Company’s long-term disability
plan.
1.10 “ Good Reason
” shall mean:
(a) a material diminution in (i) the
Executive’s Base Salary, (ii) the Executive’s
authority, duties or responsibilities, (iii) the authority, duties
or responsibilities of the Executive’s Direct Supervisor or
(iv) the budget over which the Executive retains
authority;
(b) a material change in the
geographic location at which the Executive must perform his
services on behalf of the Company; or
(c) any other action or inaction
that constitutes a material breach by the Company of this
Agreement.
1.11 “ Maximum Annual
Incentive Compensation Percentage ” shall mean the
percentage set forth as the Maximum Annual Incentive Compensation
Percentage in Exhibit A, subject to adjustment from time to time by
the Board; provided that any such adjustment shall not cause the
sum of the Maximum Annual Incentive Compensation Percentage plus
the Maximum Long-Term Compensation Percentage to be lower than the
sum of the Maximum Annual Incentive Compensation Percentage plus
the Maximum Long-Term Compensation Percentage set forth in Exhibit
A.
1.12 “ Maximum Long-Term
Incentive Compensation Percentage ” shall mean the
percentage set forth as the Maximum Long-Term Incentive
Compensation Percentage in Exhibit A, subject to adjustment from
time to time by the Board; provided that any such adjustment shall
not cause the sum of the Maximum Annual Incentive Compensation
Percentage plus the Maximum Long-Term Compensation Percentage to be
lower than the sum of the Maximum
Annual Incentive Compensation Percentage plus
the Maximum Long-Term Compensation Percentage set forth in Exhibit
A.
1.13 " Notice of Separation from
Service " shall mean a notice that shall indicate the specific
separation from service provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for severance of the Executive's service
with the Company under the provision so indicated.
1.14 “ Target Annual
Incentive Compensation Percentage ” shall mean the
percentage set forth as the Target Annual Incentive Compensation
Percentage in Exhibit A, subject to adjustment from time to time by
the Board; provided that any such adjustment shall not cause the
sum of the Target Annual Incentive Compensation Percentage plus the
Target Long-Term Compensation Percentage to be lower than the sum
of the Target Annual Incentive Compensation Percentage plus the
Target Long-Term Compensation Percentage set forth in Exhibit
A.
1.15 “ Target Long-Term
Incentive Compensation Percentage ” shall mean the
percentage set forth as the Target Long-Term Incentive Compensation
Percentage in Exhibit A, subject to adjustment from time to time by
the Board; provided that any such adjustment shall not cause the
sum of the Target Annual Incentive Compensation Percentage plus the
Target Long-Term Compensation Percentage to be lower than the sum
of the Target Annual Incentive Compensation Percentage plus the
Target Long-Term Compensation Percentage set forth in Exhibit
A.
1.16 “ Term ”
shall mean the term of employment of the Executive with the
Company, which shall commence as of the date first written above
and continue until the earlier of (a) the first anniversary of the
date first written above or (b) the Executive’s Date of
Separation from Service, and shall be subject to successive one
year renewals in accordance with Section 3.1.
1.17 “ Threshold Annual
Incentive Compensation Percentage ” shall mean the
percentage set forth as the Threshold Annual Incentive Compensation
Percentage in Exhibit A, subject to adjustment from time to time by
the Board.
1.18 “ Threshold Long-Term
Incentive Compensation Percentage ” shall mean the
percentage set forth as the Threshold Long-Term Incentive
Compensation Percentage in Exhibit A, subject to adjustment from
time to time by the Board.
ARTICLE II.
Employment, Duties and
Responsibilities
2.1 Employment . During the
Term, the Company agrees to employ the Executive and the Executive
hereby agrees to be employed as a key employee of the Company upon
the terms and subject to the conditions contained in this
Agreement.
2.2 Duties and
Responsibilities . The Executive shall have such duties and
responsibilities during the Term as specified by the person to
which the Executive directly
reports and who supervises the Executive’s
work on a regular basis (the “Direct Supervisor”).
These duties and responsibilities may be modified from time to time
in a manner consistent with the Executive’s position. The
Executive agrees to serve as a director and/or officer of any
subsidiary of the Company at a level commensurate with his position
as may be reasonably requested by the Board or the
Executive’s Direct Supervisor.
2.3 Base of Operation . The
Executive’s principal base of operation for the performance
of his duties and responsibilities under this Agreement shall be
the offices of the Company in Pembroke, Bermuda; provided ,
however , that the Executive shall perform such duties and
responsibilities outside of Pembroke, Bermuda as shall from time to
time be reasonably necessary to fulfill his obligations hereunder.
The Company and the Executive may at any time during the Term
mutually agree to change the principal base of operation for the
performance of the Executive’s duties and responsibilities.
The Executive’s performance of any duties and
responsibilities shall be conducted in a manner consistent with any
tax operating guidelines promulgated from time to time by the
Board.
ARTICLE III.
Term
3.1 Term . The employment of
the Executive under this Agreement shall be for the Term. The Term
shall be extended for successive one-year periods as of each annual
anniversary date of the date first written above (each, a
“Renewal Date”) unless, with respect to any such
Renewal Date, either party hereto gives the other party at least 90
days prior written notice of its election not to so extend the
Term.
ARTICLE IV.
Compensation and
Expenses
4.1 Salary, Bonuses, Incentive
Awards and Benefits . As compensation and consideration for the
performance by the Executive of his obligations under this
Agreement, the Executive shall be entitled, during the Term, to the
following:
(a) Base Salary . During the
Term, the Company shall pay to the Executive a base salary at the
Executive’s base salary rate on the date of this Agreement,
subject to increase from time to time as determined by the Board,
upon recommendation of the Direct Supervisor, or if such Direct
Supervisor is not an officer of the Company, an officer of the
Company (“Base Salary”). The Executive’s Base
Salary shall be payable in accordance with the Company’s
normal payroll procedures and shall not during the Term be reduced
below the annual rate payable to the Executive on the date of this
Agreement.
(b) Annual Incentive
Compensation . The Executive shall be eligible each calendar
year for incentive compensation payable in cash (“Annual
Incentive Compensation”), the amount of which shall be
between the Threshold Annual Incentive Compensation Percentage and
the Maximum Annual Incentive Compensation Percentage of the
Executive’s Base Salary as of the immediately preceding
December 31 st and shall
be determined by the Board, upon
recommendation of the Direct Supervisor, or if such Direct
Supervisor is not an officer of the Company, an officer of the
Company. The Annual Incentive Compensation shall be based upon the
performance of the Company, the Executive’s business unit and
the Executive, determined in accordance with performance criteria
established by the Board and the Direct Supervisor at the
commencement of each calendar year. The performance criteria for
the determination of the Company portion of the Executive’s
Annual Incentive Compensation for the 2009 calendar year are as set
forth on Exhibit A attached hereto. The Annual Incentive
Compensation payable to the Executive upon the Company attaining
the target Company and individual performance established by the
Board and the Direct Supervisor at the commencement of each
calendar year shall be the Target Annual Incentive Compensation
Percentage of the Executive’s Base Salary as of the
immediately preceding December 31 st . The Annual
Incentive Compensation shall be paid to the Executive at the same
time as annual incentive compensation is paid to other employees of
the Company in accordance with the Company’s normal payroll
procedures and shall be conditioned upon the Executive’s
continued employment with the Company through and including the
scheduled date of payment of annual incentive compensation by the
Company to its employees generally.
(c) Equity Incentive Awards .
The Executive shall also be eligible each calendar year during the
Term for incentive compensation in the form of equity incentive
awards (the “Equity Incentive Awards”), the amount of
which shall be between the Threshold Long Term Incentive
Compensation Percentage and the Maximum Long-Term Incentive
Compensation Percentage of the Executive’s Base Salary as of
the immediately preceding December 31 st and shall be
determined by the Board, upon recommendation of the Direct
Supervisor, or if such Direct Supervisor is not an officer of the
Company, an officer of the Company. The Equity Incentive Awards
shall be based upon the performance of the Company, the
Executive’s business unit and the Executive, determined in
accordance with performance criteria established by the Board and
the Direct Supervisor at the commencement of each calendar year.
The performance criteria for the determination of the Company
portion of the Executive’s Equity Incentive Award for the
2009 calendar year are as set forth on Exhibit A attached hereto.
The Equity Incentive Award deliverable to the Executive upon the
Company attaining the target Company and individual performance
established by the Board and the Direct Supervisor at the
commencement of each calendar year shall be the Target Long-Term
Incentive Compensation Percentage of the Executive’s Base
Salary as of the immediately preceding December 31 st .
The Equity Incentive Awards shall be delivered to the Executive at
the same time as equity incentive awards are delivered to other
employees of the Company in accordance with the Company’s
normal procedures and shall be conditioned upon the
Executive’s continued employment with the Company through and
including the scheduled date of delivery of equity incentive awards
by the Company to its employees generally. The Equity Incentive
Awards shall be in a form determined by the Board, consistent with
equity incentive awards to employees of the Company generally and
shall be issued in accordance with the terms of the equity
incentive plans of the Company, as amended through the date hereof
and hereafter from time to time (the “Plans”). The
Executive shall enter into separate award agreements with respect
to such Equity Incentive Awards and his rights with respect to such
Equity Incentive Awards shall be governed by the Plans and such
award agreements.
(d) Housing Expense
Reimbursement . The Company shall reimburse the Executive for
expenses relating to the rental and maintenance of the
Executive’s residence in Bermuda which are properly and
reasonably incurred by the Executive during the Term and are
reimbursable under the Company’s housing expense
reimbursement policy, as amended from time to time. Prior to such
payment the Executive shall provide to the Company any written
substantiation for such expenses requested by the Company. The
maximum amount of rental and maintenance expenses the Company shall
reimburse the Executive pursuant to this Section 4.1(d) shall be
$ o per 12 month period, which maximum amount shall
be prorated if the Executive’s employment with the Company
terminates prior to the scheduled expiration of the
Term.
(e) Travel Reimbursement .
The Company shall reimburse the Executive for travel expenses
relating to the Executive’s commutation to and from Bermuda
which are properly and reasonably incurred by the Executive during
the Term and are reimbursable under the Company’s commutation
expense reimbursement policy, as amended from time to time. Prior
to such payment the Executive shall provide to the Company any
written substantiation for such expenses requested by the
Company.
(f) Tax Gross-Up . To the
extent that the Executive incurs any United States federal or state
ordinary income tax liability on account of the housing expense
reimbursement and travel expense reimbursement specified in Section
4.1(d) and (e) hereof, the Company shall reimburse the Executive
for all such tax liability incurred and all United States federal
and state ordinary income tax liability incurred as a result of the
tax gross-up payments specified pursuant to this Section
4.1(f).
(g) Tax Preparation Expense
Reimbursement . The Company shall reimburse the Executive for
the reasonable cost of the preparation of the Executive’s
home country federal and state income tax returns by KPMG, or an
alternate tax preparation service provider elected by the Executive
and approved by the Company, for those calendar years falling
entirely within the Term; provided that the maximum amount of tax
preparation expense reimbursable by the Company pursuant to this
sentence shall be $2,500 per annum. Prior to such payment the
Executive shall provide to the Company any written substantiation
for such expenses requested by the Company.
(h) Benefits . The Executive
shall be eligible to participate in such 401(k) savings plan, life
insurance, health insurance, disability insurance and major medical
insurance benefits, and in such other employee benefit plans and
programs for the benefit of the employees and officers of the
Company generally, as may be maintained from time to time during
the Term, in each case to the extent and in the manner available to
other employees of the Company, subject to the terms and provisions
of such plan or program.
(j) Vacation . The Executive
shall be entitled to reasonable paid vacation periods, in
accordance with Company policy, to be taken in the
Executive’s discretion, in a manner consistent with the
Executive’s obligations to the Company under this Agreement,
and subject, with respect to timing, to the reasonable approval of
the Executive’s Direct Supervisor.
(k) Indemnification/Liability
Insurance . The Company shall indemnify the Executive as
required by the Bye-laws of the Company, and may maintain
customary
insurance policies providing for
indemnification of the Executive. In addition to the foregoing, the
Executive and the Company agree to enter into the Indemnification
Agreement attached hereto as Exhibit B concurrent with the
execution and delivery of this Agreement.
4.2 Expenses; Other Benefits
. During the Term, the Company shall provide the Executive with the
following expense reimbursements and perquisites:
(a) Business Expenses . The
Company will reimburse the Executive for reasonable
business-related expenses incurred by the Executive in connection
with the performance of the Executive’s duties hereunder
during the Term, subject, however, to the Company’s policies
relating to business-related expenses as in effect from time to
time.
(b) Other Benefits . The
Company may also provide for or withdraw other benefits for the
Executive as it determines from time to time during the Term,
consistent with practices governing similarly situated senior
executives of the Company.
4.3 Tax Withholding . The
Company shall be permitted to deduct from the amounts payable to
the Executive pursuant to this Agreement the amount of taxes that
the Company is required to withhold pursuant to applicable laws,
rules and regulations.
ARTICLE V.
Exclusivity, Etc.
5.1 Exclusivity . During the
Term, the Executive shall perform faithfully and loyally and to the
best of the Executive’s abilities the duties assigned to the
Executive hereunder and shall devote the Executive’s full
business time, attention and effort to the affairs of the Company
and its subsidiaries and affiliates and shall use the
Executive’s reasonable best efforts to promote the interests
of the Company and its subsidiaries and affiliates. Notwithstanding
the foregoing, the Executive may engage in charitable, civic or
community activities, provided that such memberships and activities
do not interfere with the Executive’s duties hereunder or
violate any of the Executives obligations under this
Agreement.
5.2 Non-Competition;
Non-Solicitation .
(a) General . The Executive
acknowledges that in the course of the Executive’s employment
with the Company the Executive will become familiar with trade
secrets and other confidential information concerning the Company
and its divisions, subsidiaries and affiliates and that the
Executive’s services will be of special, unique and
extraordinary value to the Company and its divisions, subsidiaries
and affiliates.
(b) Non-Competition . The
Executive agrees that during the Term and the period from the Date
of Separation from Service until the 6 month anniversary of the
Date of Separation from Service, the Executive shall not in any
manner, directly or indirectly, through any person, firm or
corporation, alone or as a member of a partnership or as an
officer, director, stockholder, investor, broker, advisor, employee
of or consultant to any
other corporation or enterprise or
otherwise, engage or be engaged, or assist any other person, firm,
corporation or enterprise in engaging or being engaged, in the
Business in any geographic area in which the Company or any of its
divisions, subsidiaries or affiliates is then conducting the
Business.
(c) Non-solicitation . The
Executive further agrees that during the Term and the period from
the Date of Separation from Service until the 6 month anniversary
of the Date of Separation from Service, the Executive shall not (i)
in any manner, directly or indirectly, induce or attempt to induce
any employee of the Company or any of its divisions, subsidiaries
or affiliates to terminate or abandon his or her employment for any
purpose whatsoever or (ii) in connection with the Business, call
on, service, solicit or otherwise do business with any customer of
the Company or any of its divisions, subsidiaries or
affiliates.
(d) Exceptions . Nothing in
this Section 5.2 shall prohibit the Executive from being (i) a
stockholder in a mutual fund or a diversified investment company or
(ii) an owner of not more than two percent of the outstanding stock
of any class of a corporation, any securities of which are publicly
traded, so long as the Executive has no active participation in the
business of such corporation.
5.3 Confidential Information
.
(a) General . The Executive
agrees that the Executive will not, at any time during or after the
Term, make use of or divulge to any other person, firm or
corporation any Confidential Information which he may have learned
in connection with his employment hereunder.
(b) Exceptions . The
Executive’s obligation under this Section 5.3 shall not apply
to any information which (i) is disclosed or used during the Term
by the Executive as required or appropriate in connection with his
duties as an officer of the Company or a subsidiary or affiliate
thereof, (ii) is disclosed as required by a court of law, by any
governmental agency having supervisory authority over the business
of the Company or any of its divisions, subsidiaries or affiliates
or by any administrative or l
