Exhibit 10.13
EMPLOYMENT
AGREEMENT
AGREEMENT, dated as of May 1, 2006
by and between Greenlight Capital Re, Ltd. (the
“Parent”), Greenlight Reinsurance, Ltd. (the
“Company”) and Tim Courtis
(“Executive”).
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 employ Executive as the Chief Financial Officer of
the Company (the “CFO”), and Executive hereby accepts
such employment, on the terms and conditions hereinafter set
forth.
2. Employment Period . The
period of employment of Executive by the Company under this
Agreement (the “Employment Period”) shall commence on
the later of (a) the date on which the Company obtains all
necessary work permits in order for Executive to work in the Cayman
Islands including, without limitation, any and all necessary
approvals of the Cayman Islands Monetary Authority and (b) the date
first written above (the “Effective Date”) and shall
continue until terminated by either party in accordance with
Section 6 of this Agreement. Executive’s employment shall at
all times be “at will” and not for a definite duration,
and nothing contained herein shall confer upon Executive any
contractual right to continued employment. 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 CFO and
shall report directly to the Company’s Chief Executive
Officer (the “CEO”) or such other officer of the
Company designated by the CEO or the Board of Directors of the
Company (the “Board”). Executive shall have those
powers and duties normally associated with the position of CFO of
entities comparable to the Company and such other powers and duties
as may be prescribed by the Company; provided , that
, such other powers and duties are consistent with
Executive’s position as CFO 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. 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 $250,000 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 (the “Bonus”). Executive shall be eligible to
receive a discretionary Bonus, based on performance goals
established by the Board, with a target of 50% of Base Salary. For
calendar year 2006, Executive’s guaranteed minimum bonus
shall be $125,000, pro-rated for the portion of the 2006 calendar
year he is employed by the Company. Any Bonus earned during a
calendar year shall be paid at such time as the Company customarily
pays annual bonuses; provided , that , Executive is
still employed as of such date. If Executive’s prior employer
fails to pay Executive the bonus earned by Executive during the
2005 calendar year, the Company shall pay Executive an additional
bonus (the “Additional Bonus”). The Additional Bonus
shall be payable in two installments, each in the amount of
$125,000, provided , that , Executive is employed by
the Company on each of the payment dates. The first installment
shall be paid on December 31, 2006, and the second shall be paid on
December 31, 2007.
(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 five (5) 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 employees of the Company with similar tenure are
entitled under the Company’s policies, but in no event less
than 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.
(e) Living Allowance . During
the Employment Period, Executive shall be entitled to receive a
Cayman Islands living allowance of US $6,000 per month. Executive
will be responsible for any taxes due on such allowance.
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(f) Relocation Allowance .
Within 30 days of Executive’s first day of employment,
Executive shall receive a relocation allowance in the amount of
$25,000.
(g) Stock Options
.
(i) On the Effective Date or as soon
as administratively feasible thereafter, the Parent shall grant
Executive a stock option (an “Option”) to acquire
75,000 shares of the Parent’s Class A ordinary shares, $0.10
par value per share (“Shares”) 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 Option described in
paragraph (i) above shall be granted subject to the following terms
and conditions: (A) the Option shall be granted under and subject
to the Parent’s stock incentive plan (the
“Plan”); (B) the exercise price per Share subject to
the Option shall be equal to the fair market value per Share as of
the date of grant; (C) the Option 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 Option
shall cease to vest upon Executive’s termination of
employment with the Company; (D) the Option shall be exercisable
for the ten (10) year period following the date of grant;
provided , that , upon Executive’s termination
of employment with the Company for any reason, any unvested portion
of the Option shall automatically terminate and the vested portion
of the Option shall remain exercisable for 90 days after
Executive’s termination of employment with the Company; and
(E) the Option shall be evidenced by, and subject to, a stock
option agreement whose terms and conditions are consistent with the
terms hereof.
(iii) The Shares acquired upon
exercise of the Options shall be subject to the terms and
conditions of the Parent’s Shareholders’ Agreement 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 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
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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 ten (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.
(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 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 which are inconsistent with his duties set forth herein,
(ii) a reduction of Executive’s Base Salary, or (iii) a
failure by the Company to comply with any other material provisions
of this Agreement.
(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.
7. Termination Procedure
.
(a) Notice of Termination .
Any termination of Executive’s employment by the Company or
by Executive (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
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(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
until the cure period has expired and such event or events leading
to such termination have not yet been cured.
8. Compensation Upon
Termination . In the event Executive’s employment is
terminated, the Company shall provide Executive with the payments
set forth below and shall not be required to provide any other
payments or benefits to Executive upon such termination. Executive
acknowledges and agrees that the payments set forth in this Section
8 constitute liquidated damages for termination of his employment
and that prior to receiving any such payments under Section 8 and
as a material condition thereof, Executive shall, if requested by
the Company, sign and agree to be bound by a general release of
claims against the Company and its affiliates related to
Executive’s employment (and termination of employment) with
the Company in such form as the Board deems appropriate. Upon
Executive’s termination of employment for any reason, upon
the request of the Board, he shall resign any membership or
positions that he then holds with the Company or any of its
affiliates.
(a) Termination By the Company
without Cause or By Executive for Good Reason . If
Executive’s employment is terminated by the Company without
Cause or by Executive for Good Reason:
(i) as soon as practicable following
such termination, the Company shall pay to Executive: (A) his
accrued, but unpaid Base Salary earned through the Date of
Termination, his accrued, but unpaid Bonus earned for the year
immediately prior to the year in which the Date of Termination
occurs and any accrued, but unused vacation pay through the Date of
Termination (the “Accrued Obligations”); (B) the target
Bonus Executive would have earned for the year of termination
assuming targets had been achieved, pro-rated based on the number
of days Executive was employed by the Company during the year over
the number of days in such year (the “Pro-Rated
Bonus”); and
(ii) commencing on the Severance
Payment Date (as defined below) and provided Executive does not
breach Section 9 of this Agreement following his termination in
which case all payments under this clause (ii) shall cease, the
Company shall continue to pay Executive the sum of his annual rate
of Base Salary and target Bonus (assuming targets had been
achieved) in twelve (12) equal monthly installments. For purposes
of this Agreement, the “Severance Payment Date” shall
mean (i) if the Board (or its delegate) determines in its
discretion that Executive is a “specified employee” (as
defined in Section 409A(a)(2)(B)(i) of the United States Internal
Revenue Code of 1986, as amended (the “Code”)) as of
the date of termination and that Section 409A of the Code applies
with respect to a payment to Executive pursuant to this Section
8(a), the six-month anniversary of the date of termination or (ii)
if the Board (or its delegate) determines in its discretion that
Executive is not a specified employee as of the date of termination
(or that Section 409A of the Code does not apply with respect to
a
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payment to Executive pursuant to
this Section 8(a)), the first day following the applicable
revocation period set forth in the release contemplated in this
Section 8; and
(iii) the Company shall reimburse
Executive pursuant to Section 5 for reasonable expenses incurred,
but not paid prior to such termination of employment;
and
(iv) Executive shall be entitled to
any other rights, compensation and/or b
