Exhibit 10.6
2009 FORM OF EMPLOYMENT
AGREEMENT
AGREEMENT, made and entered into
as of the _____ day of __________, 2009, by and between, XL Capital
Ltd, a Cayman Islands corporation (the “Company”),
__________, 1 and _______________ (the
“Executive”).
WHEREAS, the Company and the
Executive each desire that the Executive become employed by the
Company and that the terms and conditions of such employment be
memorialized by a written agreement to be effective for two years
following the Executive’s date of hire;
NOW, THEREFORE, in consideration
of the premises and mutual covenants contained herein and for other
good and valuable consideration, the Company, _____________
1 and the Executive (the “Parties”) agree as
follows:
1.
EMPLOYMENT.
The
Company hereby employs the Executive, and the Executive hereby
accepts employment with the Company, for the term of this Agreement
as set forth in Section 2, below, in the position and with duties
and responsibilities set forth in Section 3, below, and upon such
other terms and conditions as are hereinafter stated.
2.
TERM OF EMPLOYMENT.
The
stated term of employment under this Agreement shall commence on
___________ (the “Date of the Agreement”) and shall
continue through the close of business on the second anniversary of
the Date of the Agreement, subject to earlier termination as
provided in Section 8, below. If the Executive’s employment
by the Company continues following the expiration of the term of
this Agreement, the Executive’s employment with the Company
shall be “at will,” such that the Company may terminate
the Executive’s employment at any time, with or without
reason, and the Executive may resign at any time, with or without
reason.
3.
POSITIONS, DUTIES AND RESPONSIBILITIES.
(a)
GENERAL. The Executive shall be employed as ___________________ of
the Company. In such position, the Executive shall have the duties,
responsibilities and authority normally associated with the office,
position and titles of such an officer of an insurance and
reinsurance company, or holding company, whose shares are publicly
traded in the United States. In carrying out his duties and
responsibilities, the Executive shall report to the
______________________ of the Company. During the term of this
Agreement, the Executive
1 Subsidiaries to be added if
applicable.
shall devote his full business time to the business and affairs
of the Company, and shall use his best efforts, skills and
abilities to promote the Company’s interests.
(b)
PERFORMANCE OF SERVICES. The Executive’s services under this
Agreement, which are global in nature, shall be performed at the
location or locations reasonably requested by the Company. The
Executive acknowledges that the Company may require the Executive
to travel to the extent such travel is reasonably necessary to
perform the services hereunder and that such travel may be
extensive. To the extent reasonably requested by the Company, the
Executive shall allocate greater business time to a location other
than his principal business location, and if reasonably requested
by the Company, the Executive shall relocate to such other
locations. Any such relocation will not be considered to be a
breach of this Agreement. In the event of a relocation under this
Section, Executive will receive relocation assistance as provided
in the Company’s executive relocation policy then in
effect.
4.
BASE SALARY.
The
Executive shall be paid an annual base salary by the Company equal
to US$ ___________, payable in accordance with the Company’s
regular payroll practices. Commencing in April of 20__, such base
salary shall be subject to annual review in accordance with the
Company’s practices for executives as in effect from time to
time and may be increased at the discretion of the Compensation
Committee of the Board of Directors of the Company (the
“Compensation Committee”). The annual base salary in
effect from time to time is referred to herein as the “Base
Salary.”
5.
BONUS. In addition to the Base Salary provided for in Section 4,
above, the Executive shall be eligible for an annual bonus under
the Company’s Annual Incentive Compensation Plan as in effect
from time to time, with an annual target bonus equal to ___% of
Base Salary. The Executive may be awarded such annual bonuses
thereunder as may be approved by the Compensation Committee based
on corporate, individual and business unit performance measures, as
appropriate, established or approved from time to time, by the
Compensation Committee. Any annual bonus shall be paid in cash in a
lump sum after the end of the calendar year for which the annual
bonus is paid and no later than March 15 following such calendar
year, unless deferred at the Executive’s option in accordance
with the provisions of any applicable deferred compensation plan of
the Company or its subsidiaries in effect from time to time. [The
Executive’s minimum annual bonus for 20__ shall be $
_________. The Executive shall not have a right to a minimum bonus
for any other year.] 2
6.
EMPLOYEE BENEFIT PROGRAMS.
(a)
GENERAL. During the term of the Executive’s employment under
this Agreement, the Executive shall be entitled to participate in
all employee benefit programs of the
2 If applicable.
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Company as are in effect from time to time and in which
similarly situated senior executives of the Company are eligible to
participate.
(b)
[INITIAL STOCK OPTION GRANT. On ______________, and consistent with
the Company’s Guidelines for the Granting of Equity-Based
Compensation, the Company will grant to the Executive, under its
1991 Performance Incentive Program, a nonqualified stock option to
purchase ________ ordinary shares of the Company. The exercise
price per share of the stock option will be equal to the fair
market value per share on the date of grant. The stock option will
vest __________________, provided the Executive’s employment
continues through such vesting dates, and the term of the stock
option will be for ten years from the date of grant, subject to
earlier termination upon termination of the Executive’s
employment as set forth in the applicable award agreement. The
stock option will also be subject to the other terms of the
applicable award agreement.] 3
7.
BUSINESS EXPENSE REIMBURSEMENT AND FRINGE BENEFITS.
During
the term of the Executive’s employment under this Agreement,
the Executive shall be entitled to participate in the
Company’s travel and entertainment expense reimbursement
programs and its executive fringe benefit plans and arrangements,
all in accordance with the terms and conditions of such programs,
plans and arrangements as in effect from time to time as applied to
the Company’s similarly situated executives in the same
jurisdiction as the Executive.
8.
TERMINATION OF EMPLOYMENT.
(a)
TERMINATION WITHOUT CAUSE. Anything in this Agreement to the
contrary notwithstanding, the Executive’s employment may be
terminated by the Company without Cause. Except as otherwise set
forth in Section 8(b) below, in the event the Executive’s
employment is terminated by the Company prior to the second
anniversary of the Date of the Agreement without Cause, the
Executive shall be entitled to:
(A) unpaid Base Salary through the
date on which termination without Cause occurs, to be paid in
accordance with the Company’s regular payroll practices;
(B) provided the Executive
executes, on or before the date that is fifty (50) days following
the date of his termination of employment, a general release of
claims against the Company and its Affiliates (as defined below) in
form and substance satisfactory to the Company and does not revoke
such release prior to the end of the seven day statutory revocation
period, a cash lump sum payment made, subject to Section 25 below,
sixty (60) days after termination of employment equal to (x) two
times the Executive’s annual Base Salary, and (y) one times
the Executive’s targeted annual bonus for the year of such
termination;
3 If applicable.
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(C) for a period of twelve months
following the termination of the Executive’s employment,
continued medical benefit plan coverage (including dental and
vision benefits if provided under the applicable plans) for the
Executive (and the Executive’s dependents, if any) under the
Company’s medical benefit plans upon substantially the same
terms and conditions (including cost of coverage to the Executive)
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
(D) the vested accrued benefits,
if any, under the employee benefit programs of the Company, as
provided in Section 6 above, and reimbursement of properly incurred
unreimbursed business expenses under the business expense
reimbursement program as described in Section 7 above, determined
in accordance with the applicable terms and provisions of such
employee benefit and expense reimbursement programs.
(b)
TERMINATION WITHOUT CAUSE OR FOR GOOD REASON AFTER CHANGE IN
CONTROL. In the event the Executive’s employment is
terminated prior to the second anniversary of the Date of the
Agreement and following a Change in Control (as defined in Exhibit
A hereto) (x) by the Company without Cause or (y) by the Executive
for “Good Reason” (as defined in Exhibit B hereto), the
Executive shall not be entitled to the payments and benefits
provided for in Section 8(a) above, but he shall be entitled to the
following:
(A) unpaid Base Salary through the
date on which termination occurs, to be paid in accordance with the
Company’s regular payroll practices;
(B) a cash lump sum payment made,
subject to Section 25 below, sixty (60) days after termination of
employment equal to (x) two times the Executive’s annual Base
Salary, and (y) two times the Executive’s targeted annual
bonus for the year of such termination;
(C) for a period of twelve months
following the termination of the Executive’s employment,
continued medical benefit plan coverage (including dental and
vision benefits if provided under the applicable plans) for the
Executive (and the Executive’s dependents, if any) under the
Company’s medical benefit plans upon substantially the same
terms and conditions (including cost of coverage to the Executive)
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
(D) the vested accrued benefits,
if any, under the employee benefit programs of the Company, as
provided in Section 6 above, and reimbursement of properly incurred
unreimbursed business expenses under the business expense
reimbursement program as described in Section 7 above, determined
in accordance with the applicable terms and provisions of such
employee benefit and expense reimbursement programs.
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(c)
OTHER TERMINATION. The Executive may terminate his employment prior
to the expiration of the term of this Agreement upon at least three
months’ prior written notice to the Company; provided,
however , that any termination by the Executive for Good Reason
in accordance with Section 8(b) above shall be effected in
accordance with the notice and cure provisions set forth in Exhibit
B hereto. In the event the Executive’s employment under this
Agreement is terminated due to his disability (as determined under
the Company’s long-term disability plan), due to his death,
by the Company for Cause (such termination for Cause to be
effective upon the Company giving the Executive written notice of
termination in accordance with this Agreement), or by the Executive
(other than for Good Reason in accordance with Section 8(b) above),
the Executive shall be entitled only to:
(A) unpaid Base Salary through the
date on which termination occurs, to be paid in accordance with the
Company’s regular payroll practices; and
(B) the vested accrued benefits,
if any, under employee benefit programs of the Company, as provided
in Section 6, above, and reimbursement of properly incurred
unreimbursed business expenses under the business expense
reimbursement program as described in Section 7 above, determined
in accordance with the applicable terms and provisions of such
employee benefit and expense reimbursement programs.
For purposes of this Agreement, “Cause” shall mean:
(A) conviction of the Executive of a felony involving moral
turpitude, dishonesty or laws to which the Company or its
Affiliates are subject in connection with the conduct of its or
their business; (B) the Executive, in carrying out his duties for
the Company under this Agreement, has been guilty of (1) willful
misconduct or (2) refusal by the Executive to perform the duties
assigned to the Executive pursuant to the terms hereof; or (C) the
Executive’s refusal to obey any lawful policy or requirement
duly adopted by the Board of Directors of the Company and the
continuance of such refusal after receipt of written notice.
9.
EXCISE TAX CUTBACK.
(a)
Notwithstanding any other provision of this Agreement, in the event
that the amount of payments or other benefits payable to the
Executive under this Agreement (including, without limitation, the
acceleration of any payment or the accelerated vesting of any
payment or other benefit), together with any payments, awards or
benefits payable under any other plan, program, arrangement or
agreement maintained by the Company or one of its Affiliates, would
constitute an “excess parachute payment” (within the
meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”)), the payments under Section
8(a)(B) or 8(b)(B), as applicable, of this Agreement shall be
reduced (by the minimum possible amounts) until no amount payable
to the Executive under this Agreement constitutes an “excess
parachute payment” (within the meaning of Section 280G of the
Code); provided , however , that no such reduction
shall be made if the net after-tax payment (after taking into
account federal, state, local or other income, employment and
excise taxes) to which the Executive would otherwise be entitled
without such reduction would be greater than the net after-tax
payment (after taking into account federal, state, local or other
income, employment and excise taxes) to the Executive resulting
from the receipt of such payments with such reduction.
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(b)
All determinations required to be made under this Section 9,
including whether a payment would result in an “excess
parachute payment” and the assumptions to be utilized in
arriving at such determinations, shall be made by an accounting
firm designated by the Company (the “Accounting Firm”)
which shall provide detailed supporting calculations both to the
Company and the Executive as requested by the Company or the
Executive. All fees and expenses of the Accounting Firm shall be
borne solely by the Company and shall be paid by the Company.
Absent manifest error, all determinations made by the Accounting
Firm under this Section 9 shall be final and binding upon the
Company and the Executive.
10.
NO MITIGATION; NO OFFSET.
In
the event of any termination of employment under Section 8, above,
the Executive shall be under no obligation to mitigate damages or
seek other employment, and, except as expressly set forth herein,
there shall be no offset against amounts due the Executive under
this Agreement on account of any remuneration attributable to any
subsequent employment that he may obtain.
11.
EXECUTIVE REPRESENTATIONS.
The
Executive hereby represents and warrants to the Company that (a)
the execution, delivery and performance of this Agreement by the
Executive does not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Executive is a party or by which he
is bound, (b) except for agreements provided to the Company, the
Executive is not a party to or bound by any employment agreement,
noncompetition agreement, confidentiality agreement or similar
agreement with any other person, and (c) upon the execution and
delivery of this Agreement by the Company, this Agreement will be
the valid and binding obligation of the Executive, enforceable in
accordance with its terms. The Executive represents and warrants
that he will not use the confidential or proprietary information of
any other person in violation of any agreement or rights of others
known to him.
12.
EXECUTIVE COVENANTS.
The
Executive agrees that the products of the Company and its
Affiliates shall constitute their exclusive property. 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 (whether or not pursuant to the terms of this A
