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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
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(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 .
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(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 unti
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