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Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of November 13, 2006 (the
"Effective Date"), is entered into between Max Re Capital Ltd. (the
"Company") and W. Marston Becker ("Executive").
WHEREAS, the Company employs Executive as its Chairman and Chief
Executive Officer pursuant to a certain Consulting Agreement dated
on or about October 30, 2006 ("Consulting Agreement"); and
WHEREAS, the Company desires to retain the services of Executive
and Executive desires to work for and be employed by the Company in
the capacity set forth above; and
WHEREAS, the parties now desire to enter into this Agreement
(the "Agreement") replacing and superseding the Consulting
Agreement and setting forth the terms and conditions of the
employment relationship of Executive with the Company;
NOW, THEREFORE, in consideration of the mutual premises,
covenants and agreements set forth below, it is hereby agreed as
follows:
ARTICLE I.
EMPLOYMENT, DUTIES AND
RESPONSIBILITIES
1.1 Employment .
(a) The Company shall employ Executive as Chairman and
Chief Executive Officer of the Company. Executive agrees to devote
his full business time, efforts and energies to the performance of
his duties hereunder. Executive agrees to continue to serve on the
board of any affiliate as a director and/or to serve as an officer
of any affiliate at a level commensurate with his position as may
be reasonably requested by the Board of Directors ("Board") without
additional compensation. Executive further agrees to serve as the
principal representative of any Bermuda insurance or reinsurance
subsidiary of the Company, for the purposes of the Bermuda
Insurance Act 1978 (as amended). Executive’s principal office
location and the executive offices of the Company shall be in
Bermuda. Notwithstanding the foregoing, to the extent the following
do not materially interfere with the performance of
Executive’s duties hereunder, Executive shall be permitted to
(i) manage his personal affairs; (ii) be involved with
charitable and professional activities and (iii) with the
consent of the Board, which consent shall not be unreasonably
withheld, conditioned or delayed, serve on the board of directors
of non-charitable entities.
(b) Executive agrees that, so long as he is employed by the
Company, he will not own, directly or indirectly, any controlling
or substantial stock or other beneficial interest in any business
enterprise which is engaged in, or competitive with, any business
engaged in by the Company. Notwithstanding the foregoing, Executive
(i) shall be permitted to maintain his equity holdings in his
prior employer and (ii) may own, directly or indirectly, up to
two percent (2%) of the outstanding capital stock or debt of any
business having a class of capital stock that is traded
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on any national stock exchange or on the over-the-counter market
and upon approval of the Board may be a passive investor in
investment entities so long as his interest therein is less than
two percent (2%).
1.2 Duties and Responsibilities . Executive shall have
such authority, duties and responsibilities as are customary and
consistent with the positions he holds and such other duties and
responsibilities as are determined from time to time by the Board
and commensurate with his position. During the Term, Executive
shall report solely and directly to the Board.
ARTICLE II.
TERM
2.1 Term . The term of employment under this Agreement
(the "Term") shall commence on November 13, 2006 (the
"Commencement Date") and subject to earlier termination under
Article V, continue for a period of five (5) years. Upon
termination of the Term or as soon thereafter as possible,
howsoever terminated, Executive shall deliver to the Company and
each affiliate of the Company, if applicable, letters of
resignation from directorships, officerships and any appointment as
principal representative (referred to in Section 1.1 above).
This obligation shall survive termination of the Executive’s
employment.
ARTICLE III.
COMPENSATION
3.1 Salary, Bonuses and Benefits . As compensation and
consideration for the performance by Executive of his obligations
under this Agreement, Executive shall be entitled to the following
(subject, in each case, to the provisions of Article V
hereof):
(a) The Company shall pay Executive a base salary during
the Term, payable in accordance with the normal payment procedures
of the Company as they may exist from time to time and subject to
such withholdings and other normal employee deductions as may be
required by law, at the rate of $750,000 (U.S.) per annum. The
Company agrees to review such compensation not less frequently than
annually during the Term commencing in January, 2008. Once
increased, the base salary shall not be reduced. The base salary as
increased from time to time shall be referred to herein as "Base
Salary."
(b) Executive shall participate during the Term in such
pension, life insurance, health, disability and major medical
insurance plans, and in such other employee benefit plans and
programs and fringes and perquisites, for the benefit of the
employees of the Company, as may be maintained from time to time
during the Term, in each case to the extent and in the manner
available to other senior executives or officers of the Company and
subject to the terms and provisions of such plans or programs. In
addition, Executive shall receive an automobile allowance of $1000
per month, the payment of country club dues not to exceed $1,000
per month, and the payment of a housing allowance not to exceed
$15,000 (U.S.) per month (plus a gross-up to the extent and in the
manner provided to other Company senior executive officers who are
subject to U.S. income tax), or, if more favorable to Executive in
the aggregate, as otherwise provided by the Company for senior
executive officers of the Company. Notwithstanding the foregoing,
Executive’s housing allowance shall be no less than any other
executive officer of the Company, however the housing allowance
provided hereunder will not commence until the Executive has leased
housing in Bermuda.
(c) For each calendar year beginning with 2006 (the "Bonus
Year"), the Company shall pay a bonus to Executive based on
pre-established performance goals established by the Board with a
target bonus of 100% of Base Salary and a range from 0% to 250% of
Base Salary (the "Bonus"); provided however that
Executive’s 2006 Bonus will be prorated based on the portion
of 2006 Executive serves as Chief Executive Officer of the Company.
Any such Bonus shall be payable no later than March 15 of the
year following the year to which such Bonus relates.
(d) Executive shall be entitled to six weeks of paid
vacation in accordance with the Company policy as it may exist from
time to time (but not necessarily consecutive vacation weeks)
during each year of the Term.
(e) Upon execution of this Agreement, the Company shall
grant Executive (i) restricted common stock (the "Restricted
Stock") in the amount of 100,000 shares minus any amount of Shares
received by Executive pursuant to his Consulting Agreement with the
Company dated October 30, 2006 and (ii) a stock option to
acquire 325,000 shares of the Company’s common stock pursuant
to the Company’s stock incentive plan (the "Plan") and
consistent with the terms set forth in this paragraph (e).
(i) 33-1/3% of the Restricted Stock and 33-1/3% of the
Stock Options shall vest on January 1, 2007 ("Tranche 1");
(ii) 33-1/3% of the Restricted Stock and Stock Options
shall vest on January 1, 2008 if the book value of the
underlying common shares on December 31, 2007 is at least 10%
greater than Baseline 1 (such number which is exactly 10% more than
Baseline 1 to be referred to as "Baseline 2"); provided, that,
Executive is still employed by the Company on the vesting date
("Tranche 2"). "Baseline 1" shall mean the book value of the
underlying common shares on December 31, 2006.
(iii) 33-1/3% of the Restricted Stock and Stock Options
shall vest on January 1, 2009 if the book value of the
underlying common shares on December 31, 2008 is at least 10%
greater than Baseline 2 on December 31, 2007 (such number
which is exactly 10% more than Baseline 2 to be referred to as
"Baseline 3"); provided, that, Executive is still employed by the
Company on the vesting date. If Tranche 2 is not vested on
January 1, 2008, but Baseline 3 is achieved as of
December 31, 2008, then both such tranches shall vest as of
January 1, 2009; provided, that, Executive is still employed
by the Company on the vesting date.
Example : Assume the book value of a common share is $100
on December 31, 2006. Therefore, Baseline 2 is $110 and
Baseline 3 is $121. As such, as long as the book value is at least
$121 by December 31, 2008, 100% of the Restricted Stock and
Stock Options shall vest if Executive is employed as of the
relevant vesting date(s).
(iv) Notwithstanding the foregoing, if Executive’s
employment is terminated by the Company without Cause (as defined
below) or Executive’s employment is terminated by the
Executive for Good Reason (as defined below), or following a Change
in Control (as defined below) or in the event Executive ceases
employment with the Company at the end of the Term, all unvested
Restricted Stock and Stock Options granted in accordance with this
paragraph (e) and any past or future equity awards granted to
Executive by the Company shall become immediately vested in full
upon such termination or cessation of employment.
(v) In the event Executive dies or Executive’s
employment is terminated by the Company for Disability (as defined
below) at any time during the Term, all unvested Restricted Stock
granted under this paragraph (e) shall become immediately
vested upon such termination.
For purposes of this Agreement, a Change in Control shall mean
(i) any sale, lease, exchange or other transfer (in one or a
series of related transactions) of all or substantially all of the
assets of the Company or Max Re Ltd.; (ii) any "person" as
such term is used in Section 13(d) and Section 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") is
or becomes, directly or indirectly, the "beneficial owner" as
defined in Rule 13d-3 under the Exchange Act of securities of
the Company that represent 51% or more of the combined voting power
of the Company’s then outstanding voting securities;
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board (together
with any new directors whose election by the Board whose nomination
by the shareholders of the Company was approved by a vote of the
Board then still in office who are either directors at the
beginning of such period or whose election or nomination for
election was so previously approved) cease for any reason to
constitute a majority of the Board then in office; or (iv) the
Board or the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent at least 80% of the total voting power
represented by the voting securities of the Company immediately
after such merger or consolidation, or the Board or shareholders of
the Company approve a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company (in one
or a series of transactions) of all or substantially all of the
Company’s assets.
3.2 Expenses . The Company will reimburse Executive for
reasonable business-related expenses incurred by him in connection
with the performance of his duties hereunder during the Term in
accordance with the Company’s policies relating to
business-related expenses as in effect from time to time during the
Term. Executive shall have access to private air charter as needed
in his reasonable discretion and in accordance with Company policy.
Executive shall submit quarterly to the Company’s Audit and
Risk Management Committee an accounting of all use of private air
charter utilized by Executive. In the event of Executive’s
termination for any reason, all payments required by this paragraph
will be paid no more than thirty (30) days following the Date
of Termination.
ARTICLE IV.
EXCLUSIVITY, ETC.
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4.1
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Restrictive Covenants.
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(a) Return of Property and Nondisclosure . Upon
termination or expiration of his employment, Executive will
promptly deliver to the Company all data, lists, information,
memoranda, documents and all other property belonging to the
Company or containing "Confidential Information" (as defined
below), including, among other things, that which relates to
services performed by Executive for the Company or any affiliate,
or was created or obtained by Executive while performing services
for the Company or any affiliate or by virtue of Executive’s
relationship with the Company or any affiliate, except that
Executive shall have no obligation to deliver to the Company his
rolodex, calendars and any documents containing Executive’s
personal contacts or information. Except (i) as required in
order to perform his obligations under this Agreement, (ii) as may
otherwise be required by law or any legal process, or (iii) as
is necessary in connection with any adversarial proceeding against
the Company (in which case Executive shall use his reasonable best
efforts in cooperating with the Company in obtaining a protective
order against disclosure by a court of competent jurisdiction),
Executive shall not, without the express prior written consent of
the Company, disclose or divulge to any other person or entity, or
use or modify for use, directly or indirectly, in any way, for any
person or entity, any of the Company’s or any
affiliate’s Confidential Information at any time (during or
after Executive’s employment). For purposes of this
Agreement, "Confidential Information" of the Company shall mean any
valuable, competitively sensitive data and information related to
the Company’s or any affiliate’s business including,
without limitation Trade Secrets (as defined below) that are not
generally known by or readily available to the Company’s or
any affiliate’s competitors other than as a result of an
improper disclosure directly or indirectly by Executive. "Trade
Secrets" shall mean information or data of the Company or any
affiliates including, but not limited to, technical or
non-technical data, financial information, programs, devices,
methods, techniques, drawings, processes, financial plans, product
plans, or lists of actual or potential customers or suppliers,
that: (A) derive economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from
their disclosure or use; and (B) are the subject of efforts
that are reasonable under the circumstances to maintain their
secrecy.
(b) Post-Employment Property . Executive agrees
that any and all intellectual property that Executive invents,
discovers, originates, makes, conceives, creates or authors either
solely or jointly with others and that is the result of or is
substantially derived from Confidential Information shall be the
sole and exclusive property of the Company unless in the public
domain. Executive shall promptly and fully disclose all such
property to the Company, shall provide the Company with any
information that it may reasonably request about such property and
shall execute such agreements, assignments or other instruments as
may be reasonably requested by the Company to reflect such
ownership by the Company.
(c) Protection of the Business; Nonsolicitation .
Executive acknowledges that as the Company’s Chief Executive
Officer, he has access to substantial Confidential Information,
including information regarding the Company’s clients,
customers, goals, strategies, pricing, and trade secrets. Executive
further acknowledges that should he leave the Company and become
employed by or in any way affiliated with a competitor of the
Company, he inevitably would disclose the Company’s
Confidential Information in the course of providing services to
such competitor. Therefore, and in light of the substantial
compensation and severance payments Executive is eligible to
receive under this Agreement, Executive hereby covenants as
follows: During the Term and until the first anniversary of
Executive’s Date of Termination (as defined below) for any
reason, (i) Executive will not anywhere within the
geographical areas in which the Company or any subsidiary (the
"Designated Entities") are conducting their business operations or
providing services as of the Date of Termination, pursue any
Company or subsidiary project known to Executive and which the
Designated Entities are actively pursuing, developing or attempting
to develop as of the Date of Termination (or within six
(6) months prior to the Date of Termination) while the Company
is (or is contemplating actively) pursuing such project directly or
indirectly, alone, in association with or as a shareholder,
principal, agent, partner, officer, director, employee or
consultant of any other organization; (ii) Executive will not
solicit, contact, interfere with, contract with, or endeavor to
entice away from any of the Designated Entities (aa) any of
the Designated Entities’ current clients or customers,
(bb) any persons or entities that were customers or clients of
any of the Designated Entities at any time in the one (i) year
prior to the Date of Termination, or (cc) any potential client
or customer that any of the Designated Entities were actively
pursuing or contemplating actively pursuing during
Executive’s employment; and (iii) Executive shall not
solicit any officer, employee (other than secretarial staff) or
consultant of any of the Designated Entities to leave the employ of
any of the Designated Entities.
(d) Non-Disparage . The parties acknowledge and
agree that they will not defame or publicly criticize the services,
business, integrity, veracity or personal or professional
reputation of the other party, and in the case of the Company, its
officers, directors, partners, employees, affiliates, or agents
thereof in either a professional or personal manner, except that
the foregoing shall not limit normal competitive activities.
(e) Blue Pencil . If, at any time, the provisions
of this Section 4.1 shall be determined to be invalid or
unenforceable under any applicable law, by reason of being vague or
unreasonable as to area, duration or scope of activity, this
Section 4.1 shall be considered divisible and shall become and
be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by
the court or other body having jurisdiction over the matter; and
Executive and the Company agree that this Section 4.1 as so
amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
4.2 Remedies . Executive acknowledges that the
Company’s remedy at law for a breach by him of the provisions
of this Article IV will be inadequate. Accordingly, in the
event of a breach or threatened breach by Executive of any
provision of this Article IV, the Company shall be entitled to
seek injunctive relief in Bermuda or elsewhere in addition to any
other remedy it may have. If any of the provisions of, or covenants
contained in, this Article IV are hereafter construed to be
invalid or unenforceable in any jurisdiction, the same shall not
affect the remainder of the provisions or the enforceability
thereof in any other jurisdiction, which shall be given full
effect, without regard to the invalidity or unenforceability in
such other jurisdiction. If any of the provisions of, or covenants
contained in, this Article IV are held to be unenforceable in
any jurisdiction because of the duration or geographical scope
thereof, the parties agree that the court making such determination
shall have the power to reduce the duration or geographical scope
of such provision or covenant and, in its reduced form, such
provision or covenant shall be enforceable; provided ,
however , that the determination of such court shall not
affect the enforceability of this Article IV in any other
jurisdiction.
ARTICLE V.
TERMINATION
5.1 Termination by the Company with Cause . The Company
shall have the right to terminate Executive’s employment at
any time with "Cause" by providing a Notice of Termination to
Executive not more than thirty (30) days after the
Board’s actual knowledge of the Cause event, and such
termination shall not be deemed to be a breach of this Agreement.
For purposes of this Agreement, "Cause" shall mean
(i) habitual drug or alcohol use which impairs the ability of
Executive to perform his duties hereunder;
(ii) Executive’s conviction during the Term by a court
of competent jurisdiction, or a pleading of "no contest" or guilty
to a felony or the equivalent if outside the United States;
(iii) Executive’s engaging in fraud, embezzlement or any
other illegal conduct with respect to the Company which acts are
materially harmful to, either financially, or to the business
reputation of, the Company; (iv) Executive’s willful
violation of Article IV hereof; (v) Executive’s
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 that specifically identifies the manner
in which the Board believes that Executive has failed or refused to
perform his duties, or (vi) Executive otherwise breaches any
material provision of this Agreement which is not cured, if
curable, within 30 days after written notice thereof.
Executive will be given the opportunity within five
(5) calendar days of receipt of such notice to meet with the
Board to defend such act or acts or failure to act. No act or
failure to act by Executive shall be deemed "willful" unless done,
or omitted to be done, (i) by Executive not in good faith and
(ii) without a reasonable belief that his action or omission
was in the best interest of the Company. However, acts or failures
to act will not be deem
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