EXHIBIT 10.12
Execution Copy
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “ Agreement ”) , dated as of
January 10, 2007 by and between Greenlight Capital Re, Ltd. (the
“ Parent ”), Greenlight Reinsurance, Ltd. (the
“ Company ”) and Leonard Goldberg (“
Executive ”).
WHEREAS, the Parent, the Company and
Executive entered into an employment agreement dated July 26, 2005
which became effective as of August 15, 2005 (the “
Original Agreement ”); and
WHEREAS, the Parent, the Company and
Executive desire to amend and restate the Original Agreement as set
forth below.
IN CONSIDERATION of the premises and
the mutual covenants set forth below, the parties hereby agree as
follows:
1. Employment . The Company
hereby agrees to continue to employ Executive as the Chief
Executive Officer of the Company (the “ CEO ”),
and Executive hereby accepts such continued employment, on the
terms and conditions hereinafter set forth.
2. Term . The period of
employment of Executive by the Company under this Agreement (the
“ Employment Period ”) commenced on August 15,
2005 (the “ Effective Date ”) and shall continue
through August 15, 2008. The Employment Period may be sooner
terminated by either party in accordance with Section 6 of this
Agreement. This Agreement is conditioned upon the Company
maintaining a work permit for Executive and Executive complying
with the Cayman Islands Immigration laws and regulations from time
to time in force.
3. Position and Duties .
During the Employment Period, Executive shall serve as CEO and
shall report directly to the Board of Directors of the Company (the
“ Board ”). Executive shall have those powers
and duties normally associated with the position of CEO of entities
comparable to the Company and such other powers and duties as may
be prescribed by the Board; provided that , such
other powers and duties are consistent with Executive’s
position as CEO and do not violate any applicable laws or
regulations. Executive shall perform his duties to the best of his
abilities and shall devote all of his working time, attention and
energies to the performance of his duties for the Company. During
the first year of the Employment Period, Executive’s duties
shall include, without limitation: developing a comprehensive
business plan for the Company, to be approved by the Board (the
“ Business Plan ”); recruiting and hiring the
Company’s management team; supervising the establishment of
an appropriate infrastructure to support the long-term goals of the
Company; developing long-term bonus and employee incentive plans,
subject to approval by the Board; commencing reinsurance operations
as per the Business Plan; working closely with the Company’s
investment manager to ensure an appropriate asset-liability
balance; supervising and directing the Company’s outside
service providers; and representing the Company in meetings with
regulators and rating agencies. During the Employment Period, it is
anticipated that Executive shall also serve as a member of the
Board for no additional compensation, subject to his continued
election to serve on the Board
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by the Company’s shareholders.
If requested by the Board of Directors of the Parent, Executive
shall also serve as an officer and/or director of the Parent or any
other subsidiary or affiliate of the Parent or the Company for no
additional compensation.
4. Place of Performance . The
Company’s principal place of business is the Cayman Islands.
Executive shall be required to travel to the Cayman Islands as
necessary to perform his duties hereunder. During the Employment
Period, Executive shall comply with all Company and Parent
policies, as may be amended from time to time, including, without
limitation, conducting the business affairs of the Company and
Parent such that neither entity is deemed to be engaging in a trade
or business within the United States.
5. Compensation and Related
Matters .
(a) Base Salary and Bonus .
During the Employment Period, the Company shall pay Executive a
base salary at the rate of not less than US $500,000 per year
(“ Base Salary ”). Executive’s Base
Salary shall be paid in accordance with the Company’s
customary payroll practices. The Board shall periodically review
Executive’s Base Salary for increase (but not decrease),
consistent with the compensation practices and guidelines of the
Company. If Executive’s Base Salary is increased by the
Company, such increased Base Salary shall then constitute the Base
Salary for all purposes of this Agreement. In addition to Base
Salary, during the Employment Period, Executive shall be eligible
for an annual bonus based on pre-established performance metrics
established by the Board after consulting with Executive with a
target of 100% of Base Salary (the “ Bonus ”).
Any Bonus earned during a calendar year shall be paid at such time
as the Company customarily pays annual bonuses and shall be subject
to such other terms and conditions as are set forth in the
Company’s bonus program, as established from time to
time.
(b) Expenses . During the
Employment Period, the Company shall promptly reimburse Executive
for all reasonable business expenses upon the presentation of
reasonably itemized statements of such expenses in accordance with
the Company’s policies and procedures now in force or as such
policies and procedures may be modified with respect to all senior
executive officers of the Company.
(c) Vacation . During the
Employment Period, Executive shall be entitled to six (6) weeks of
paid vacation per year to be used and accrued in accordance with
the Company’s policy as it may be established from time to
time. In addition to vacation, Executive shall be entitled to the
number of sick days, personal days and national holidays per year
to which other senior executive officers of the Company with
similar tenure are entitled under the Company’s policies, but
in no event less that the minimum days mandated by Cayman Islands
statutory requirements.
(d) Welfare, Pension and
Incentive Benefit Plans . During the Employment Period,
Executive shall be entitled to participate in such employee benefit
plans and insurance programs offered by the Company, or which it
may adopt from time to time, for its employees, in accordance with
Cayman Islands Laws and regulations from time to time in force and
in accordance with the eligibility requirements for participation
therein. Prior to the time that the Company establishes welfare and
health plans, the Company shall reimburse Executive for
the
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cost of health insurance for himself
and his family that is comparable to the health insurance Executive
has in effect as of the Effective Date. In addition, during the
Employment Period, the Company shall reimburse Executive for his
reasonable expenses incurred in having an accountant assist and
prepare his annual tax return. The Company will provide a
workers’ compensation plan that meets or exceeds the
statutory requirements of the Cayman Islands.
(e) Housing Allowance .
During the Employment Period, Executive shall be entitled to
receive a Cayman Islands housing allowance of US $10,000 per month.
Employee will be responsible for any taxes due on such
allowance.
(f) Stock Options
.
(i) On August 15, 2005, the Parent
granted Executive a stock option (an “ Option ”)
to acquire 500,000 shares of the Parent’s Class A Ordinary
Shares, $0.10 par value per share (“ Shares ”)
at an exercise price per Share equal to US $11.10 (i.e., the fair
market value per Share as of the date of grant), under such terms
and conditions as provided for under the Parent’s then
existing stock incentive plan which are not inconsistent with
clauses (ii) and (iii) below.
(ii) The Options described herein
shall be granted subject to the following terms and conditions: (A)
the Options shall be granted under and subject to the
Parent’s stock incentive plan (the “ Plan
”); (B) the exercise price per Share subject to the Options
shall be equal to the fair market value per Share as of the date of
grant; (C) the Options shall be vested as to 33-1/3% of the Shares
subject thereto on each of the first three anniversaries of the
date of grant; provided , that , the Options shall
cease to vest upon Executive’s termination of employment with
the Company; (D) the Options shall be exercisable for the ten (10)
year period following the date of grant; provided ,
that , except as otherwise provided herein, upon
Executive’s termination of employment with the Company for
any reason, any unvested portion of the Options shall automatically
terminate and the vested portion of the Options shall remain
exercisable for 90 days after Executive’s termination of
employment with the Company; and (E) the Options shall be
evidenced by, and subject to, a stock option agreement whose terms
and conditions are consistent with the terms hereof.
(iii) The Options shall provide that
upon a termination of employment by the Company for Cause (as
defined below), the Options (whether or not vested) shall
terminate. Upon a termination of employment due to
Executive’s death or Disability (as defined below), or for
Family Reasons (as defined below), any unvested portion of the
Options shall terminate and any vested portion shall remain
exercisable for the remainder of its term (except that on a
termination for Family Reasons, the vested portion shall terminate
if the Executive becomes employed by a Competing Entity (as defined
below)). Upon a termination of employment by the Company without
Cause or by Executive for Good Reason (as defined below), or upon
expiration of the Employment Period where the Company has failed to
offer Executive continued employment with the Company on
substantially comparable terms as provided in this Agreement, any
unvested portion of the Options shall vest, and the Options
(including the portion which becomes
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vested pursuant to this paragraph
(iii)) shall remain exercisable for the remainder of its
term.
(iv) On October 5, 2006, the Parent
granted Executive an additional Option to acquire 100,000 Shares at
an exercise price per Share equal to US $13.48 (i.e., the fair
market value per Share as of the date of grant). On August 15, 2007
and on each anniversary thereof for the remainder of the Employment
Period, the Parent shall grant Executive an additional Option to
acquire 50,000 Shares. All Options granted pursuant to this Section
5(f)(iv) shall be subject to the same terms and conditions as
provided in Section 5(f) (i) – (iii) above.
(v) The Shares acquired upon
exercise of the Options described herein shall be subject to the
terms and conditions of the Parent’s Shareholders’
Agreement dated as of August 11, 2004 as it may be amended from
time to time and Executive shall become a party to such agreement
at such time.
6. Termination .
Executive’s employment hereunder may be terminated during the
Employment Period under the following circumstances:
(a) Death . Executive’s
employment hereunder shall terminate upon his death.
(b) Disability . If, as a
result of Executive’s incapacity due to physical or mental
illness, Executive shall have been substantially unable to perform
his duties hereunder for an entire period of at least 90
consecutive days or 180 non-consecutive days within any 365-day
period, the Company shall have the right to terminate
Executive’s employment hereunder for “
Disability ”, and such termination in and of itself
shall not be, nor shall it be deemed to be, a breach of this
Agreement.
(c) Cause . The Company shall
have the right to terminate Executive’s employment for Cause,
and such termination in and of itself shall not be, nor shall it be
deemed to be, a breach of this Agreement. For purposes of this
Agreement, “ Cause ” shall mean
Executive’s (i) drug or alcohol use which impairs the ability
of Executive to perform his duties hereunder; (ii) conviction by a
court of competent jurisdiction, or plea of “no
contest” or guilty to a criminal offense; (iii) engaging in
fraud, embezzlement or any other illegal conduct with respect to
the Company and/or the Parent or any of their affiliates
(collectively, the “ Group ”); (iv) willfully
violating the Restrictive Covenants set forth in Section 9 of this
Agreement; (v) willful failure or refusal to perform his duties
hereunder (other than such failure caused by Executive’s
Disability or while on vacation) after a written demand for
performance is delivered to Executive by the Board which
specifically identifies the manner in which the Board believes that
Executive has failed or refused to perform his duties; or (vi)
breach of any material provision of this Agreement or any Group
policies related to conduct which is not cured, if curable, within
10 days after written notice thereof. The Company shall have the
right to suspend Executive with pay in order to investigate any
event which it reasonably believes may provide a basis to terminate
Executive’s employment for Cause and such action shall not
give Executive Good Reason to terminate his employment.
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(d) Good Reason . Executive
may terminate his employment with the Company for “ Good
Reason ” within thirty (30) days after Executive has
knowledge of the occurrence, without the Executive’s written
consent, of one of the following events that has not been cured, if
curable, within thirty (30) days after written notice thereof has
been given by Executive to the Company and such termination in and
of itself shall not be, nor shall it be deemed to be, a breach of
this Agreement. “Good Reason” shall be limited to the
following: (i) any material and adverse change to Executive’s
duties or authority which are inconsistent with his title and
position set forth herein, (ii) a diminution of Executive’s
title or position; (iii) a reduction of Executive’s Base
Salary, (iv) a failure by the Company to comply with any other
material provisions of this Agreement, or (v) upon a Change in
Control of the Parent (as defined below). For purposes of this
Agreement, the term “ Change in Control of the Parent
” means the occurrence of one of the following events: (i)
any “person” or “group” becomes the
“beneficial owner” (as such terms are used in
Rule 13d-3 promulgated under the U.S. Securities Exchange Act
of 1934, as amended, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that
such person or group has the right to acquire, whether such right
is exercisable immediately or only after the passage of time),
directly or indirectly, of 51% or more of the Shares (measured by
voting power rather than number of shares); provided ,
however , that an event described in this paragraph (i)
shall not be deemed to be a Change in Control if any of following
becomes such a beneficial owner: (A) any tax-qualified, broad-based
employee benefit plan sponsored or maintained by the Parent, the
Company or any other member of the Group, (B) any Parent
underwriter temporarily holding securities pursuant to an offering
of such securities, or (C) any person or group pursuant to a
Non-Qualifying Transaction (as defined in paragraph (ii)); or (ii)
the Parent consolidates or merges with or into any other person or
group or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets and the assets
of the Parent’s direct and indirect subsidiaries (on a
consolidated basis) to any other person or group, in either one
transaction or a series of related transactions which occur within
six months, other than a consolidation or merger or disposition of
assets: (A) of or by the Parent into or to a 100% owned
subsidiary of the Parent, or (B) pursuant to a transaction in
which the outstanding Shares are changed into or exchanged for
securities or other property with the effect that the beneficial
owners of the outstanding Shares immediately prior to such
transaction, beneficially own, directly or indirectly, at least a
majority of the Shares (measured by voting power rather than number
of shares) of the surviving corporation or the person or group to
whom the Parent’s assets are transferred immediately
following such transaction (any transaction which satisfies the
criteria specified in (A) or (B) above shall be deemed to be a
“ Non-Qualifying Transaction ”).
(e) Without Cause . The
Company shall have the right to terminate Executive’s
employment hereunder without Cause at any time by providing
Executive with a Notice of Termination and such termination shall
not in and of itself be, nor shall it be deemed to be, a breach of
this Agreement.
(f) Without Good Reason .
Executive shall have the right to terminate his employment
hereunder without Good Reason by providing the Company with a
Notice of Termination at least ninety (90) days prior to such
termination, and such termination shall not in and of itself be,
nor shall it be deemed to be, a breach of this
Agreement.
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(g) Expiration of the Employment
Period . Executive’s employment shall automatically
terminate upon expiration of the Employment Period and such
termination shall not be a breach of this Agreement;
provided , that , unless otherwise agreed to by the
parties hereto, if the Company fails to offer Executive continued
employment with the Company on substantially comparable terms as
provided in this Agreement at least six (6) months prior to such
expiration, upon such expiration, Executive’s employment
shall be deemed to be terminated under Section 6(e) of this
Agreement.
(h) Family Reasons .
Executive shall have the right to terminate his employment
hereunder for Family Reasons by providing the Company with a Notice
of Termination at least thirty (30) days prior to such termination,
and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement. For purposes of this
Agreement, “ Family Reasons ” shall mean
Executive’s permanent retirement from the
insurance/reinsurance industry. The determination as to whether
Executive has retired shall be made solely by the Board in good
faith after considering the circumstances surrounding such
retirement which shall include, without limitation, a material
change in Executive’s immediate family caused by the death or
disability of an immediate family member.
7. Termination Procedure
.
(a) Notice of Termination .
Any termination of Executive’s employment by the Company or
by Executive during the Employment Period (other than termination
pursuant to Section 6(a)) shall be communicated by written Notice
of Termination to the other party hereto in accordance with Section
13 of this Agreement. For purposes of this Agreement, a “
Notice of Termination ” shall mean a notice which
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so
indicated.
(b) Date of Termination .
“ Date of Termination ” shall mean (i) if
Executive’s employment is terminated by his death, the date
of his death, (ii) if Executive’s employment is terminated
pursuant to Section 6(b), thirty (30) days after Notice of
Termination (provided that Executive shall not have returned to the
substantial performance of his duties on a full-time basis during
such thirty (30) day period), and (iii) if Executive’s
employment is terminated for any other reason, the date on which a
Notice of Termination is given or any later date (within ninety
(90) days after the giving of such notice) set forth in such Notice
of Termination; provided , that , if applicable, the
Notice of Termination shall not be effective u
