EXHIBIT
10.11
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT dated as
of June 1, 2005 (the “Effective Date”), by and between
AmTrust North America, Inc., 59 Maiden Lane, 6 th Floor,
New York, New York, a Delaware corporation (the
“Company”) and Michael J. Saxon, an individual residing
at 514 Brookstone Court, Copley, Ohio 44321
(“Executive”).
WITNESSETH
WHEREAS
, The Company and Executive desire
to enter into this Employment Agreement (the
“Agreement”) in order to set forth the terms and
conditions of Executive’s employment, intending to supersede
any prior employment agreement, written or oral, whether with the
Company or other affiliates.
NOW,
THEREFORE , in
consideration of the mutual covenants and promises contained herein
and other good and valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:
1. Duties
and Responsibilities. The duties and responsibilities of
Executive shall be those of a senior executive of the Company as
the same shall be assigned to him, from time to time, by the Board
of Directors of the Company. Executive recognizes that, during the
period of his employment hereunder, he owes an undivided duty of
loyalty to the Company and agrees to devote all of his business
time and attention to the performance of his duties and
responsibilities and to use his best efforts to promote and develop
the business of the Company. Subject to the approval of the Board
of Directors, which shall not be unreasonably withheld, Executive
shall be entitled to serve on corporate, civic, and/or charitable
boards or committees and to otherwise reasonably participate as a
member in community, civic, or similar organizations and the
pursuit of personal investments which do not present any material
conflicts of interest with the Company.
It is the intention of the Company that
Executive shall be appointed President to serve in such position at
the pleasure of the Board of Directors, reporting on a day-to-day
basis directly to the president of Company’s parent
corporation, AmTrust Financial Services, Inc. (“AFS”).
If elected, Executive shall serve as a member of the Board of
Directors of the Company or such of its affiliates to which he may
be elected, in each case, without additional
compensation.
2.
Employment Period. For a period commencing on the Effective
Date hereof and ending on May 31, 2008 (the “Employment
Period”), the Company hereby employ Executive in the
capacities herein set forth. Executive agrees, pursuant to the
terms hereof, to serve in such
capacities for the Employment
Period. This Agreement shall renew for successive one year periods
unless one of the parties provides written notice of not less than
ninety days prior to the end of the Employment Period or any
successive Employment Period that the party will not renew the
Agreement.
3.
Compensation and Benefits.
(a) Salary. The
Company, collectively, shall pay Executive a salary at the rate of
Two Hundred Fifty Thousand Dollars ($250,000) per annum through
December 31, 2005 and Three Hundred Twenty-Five Thousand Dollars
($325,000) per annum effective January 1, 2006
(“Salary”), payable in accordance with the
Company’ normal payroll process. Executive shall be entitled
to a salary review annually commencing on the second anniversary of
the Effective Date of this Agreement. Such salary review shall be
based entirely on merit and any salary adjustments shall be
determined by the Board of Directors of the Company solely at its
discretion.
(b) Profit
Bonus. Executive shall receive an annual bonus equal to one percent
(1%) of the profit, as defined herein, of AFS during the Employment
Period or any successive Employment Period (the “Profit
Bonus”). Effective as of the Calendar year ending December
31, 2006, the Profit Bonus shall not exceed Executive’s then
current Salary. For purposes of computing the Profit Bonus, profits
shall mean AFS’ after tax net income, excluding extraordinary
income and all income of AmTrust Pacific Limited, as determined by
AFS’s independent public accountants whose determination
thereof shall be final, binding and conclusive. The Profit Bonus
for each year shall be paid within sixty (60) days after the
completion and issuance of AFS’s consolidated financial
statements for the prior calendar year. The Profit Bonus shall be
payable only if Executive is employed by the Company on the date
that the bonus is payable.
(c) Special
Bonus. It is understood and agreed that AFS intends to adopt a 2005
Incentive Stock Plan (the “Plan”). Upon such adoption
and based upon a proposed capitalization of thirty million issued
and outstanding shares of common stock, Executive shall be granted
an incentive stock option to purchase under the Plan 300,000 shares
of AFS common stock, subject to the terms and conditions of the
Plan. The number of shares covered by the option shall be adjusted
upward or downward, as the case may be, to an amount equal to one
percent of the issued and outstanding shares of common stock if the
number of said shares is greater or lesser than thirty million. In
the event that AFS, during the term of the option, does not have a
liquidity event, such as an initial public offering, a sale of in
excess of twenty percent (20%) of its outstanding shares to persons
currently not affiliated with AFS or a merger or sale of AFS to a
non-affiliated third party, exercise of the option, in whole or in
part, shall be deferred indefinitely unless and until such event
occurs.
(d) Executive
may also receive other bonus payments determined at the sole
discretion of the Board of Directors (“Discretionary
Bonus”).
(e) Executive
shall also be entitled to the following benefits:
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(i)
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three weeks (3) weeks of paid
vacation for each twelve (12) months of the Employment, or such
greater period as may be approved from time to time by Board of
Directors. Unused vacation time shall not be carried over to any
subsequent calendar year;
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(ii)
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paid holidays and any and all other
work-related leave (whether sick leave or otherwise) as provided to
the Company’ other executive employees; and
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(iii)
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participation in such employee
benefit plans to which executive employees of the Company, their
dependents and beneficiaries generally are entitled during the
Employment Period and, including, without limitation, health
insurance, disability and life insurance, retirement plans and
other present or successor plans and practices of Company for which
executive employees, their dependents and beneficiaries are
eligible.
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4.
Reimbursement of Expenses. The Company recognizes that
Executive, in performing Executive’s functions, duties and
responsibilities under this Agreement, may be required to spend
sums of money in connection with those functions, duties and
responsibilities for the benefit of the Company and, accordingly,
shall reimburse Executive for travel and other out-of-pocket
expenses reasonably and necessarily incurred in the performance of
his functions, duties and responsibilities hereunder upon
submission of written statements and/or bills in accordance with
the regular procedures of the Company in effect from time to
time.
5.
Disability. In the event that Executive shall be unable to
perform because of illness or incapacity, physical or mental, all
the functions, duties and responsibilities to be performed by him
hereunder for a consecutive period of two (2) months or for a total
period of three (3) months during any consecutive twelve (12) month
period, the Company may terminate this Agreement effective on or
after the expiration of such period (the “Disability
Period”) upon five (5) business days’ written notice to
Executive specifying the termination date (the “Disability
Termination Date”). Executive shall be entitled to receive
his Salary and any unreimbursed expenses to the Disability
Termination Date and for a period of the three months thereafter.
Disability under this paragraph, shall be determined by a physician
who shall be selected by the Company and approved by Executive.
Such approval shall not be unreasonably withheld or delayed, and a
physician shall be deemed to be approved unless he or she is
disapproved in writing by Executive within ten (10) days after his
or her name is submitted. The Company may obtain disability income
insurance for the benefit of Executive in such amounts as the
Company may determine.
6.
Death. In the event of the death of Executive during the
Employment Period, this Agreement and the employment of Executive
hereunder shall terminate on the date of death of Executive.
Executive’s heirs or legal representatives shall be entitled
to receive his Salary earned to the date of his death and for a
period of three months thereafter and any unreimbursed
expenses.
The Company may discharge Executive for Cause at
any time. Cause for discharge shall include (i) a material breach
of this Agreement by Executive, but only if such breach is not
cured within thirty (30) days following written notice by the
Company to Executive of such bre
