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EXHIBIT 10.2
EMPLOYMENT
AGREEMENT
EMPLOYMENT
AGREEMENT, dated as of July 27, 2007 by and between Max
Capital Group Ltd. (the “Company”) and Joseph W.
Roberts (“Executive”).
WHEREAS,
the Company employs Executive as its Executive Vice President and
Chief Financial Officer and desires to continue to retain the
services of Executive and Executive desires to continue to work for
and be employed by the Company in such capacity; and
WHEREAS,
the parties now desire to enter into this Employment Agreement (the
“Agreement”) setting forth the terms and conditions of
the employment relationship of Executive with the Company; and
WHEREAS,
the Company and Executive desire that this Agreement replace and
supersede any and all existing employment arrangements and
agreements between Executive and the Company and/or its
subsidiaries.
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 Executive Vice President and 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 shall commence on April 1,
2007 (the “Effective Date”) and shall continue until
the third anniversary of the Effective Date (the “Initial
Term”). This Agreement shall be automatically extended for
successive additional one year terms (each a “Renewal
Term”), unless either party delivers to the other party
written notice of non-renewal at least six (6) months prior to
the end of the Initial Term or any Renewal Term (the Initial Term
and any Renewal Terms are hereinafter referred to as the
“Employment Period”). The Employment Period may be
sooner terminated as provided in Section 6 hereof.
3.
Position and Duties . During the Employment Period, except
as otherwise provided in this Agreement, Executive shall serve as
CFO and shall report directly to the Chief Executive Officer of the
Company. Executive shall have all of 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 substantially 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 Company (the
“Board”), Executive shall serve as an officer and/or
director of any of the Company’s affiliates or subsidiaries
(collectively with the Company, the “Group”) for no
additional compensation. 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 and
(ii) be involved with charitable and professional
activities.
4.
Place of Performance . The principal place of employment of
Executive shall be at the Company’s office in Bermuda;
provided , that , Executive may be required to travel
on Company business from time to time during the Employment Period
as may be reasonably necessary to carry out his duties under this
Agreement.
5.
Compensation and Related Matters .
(a)
Base Salary and Bonus . During the Employment Period, the
Company shall pay to Executive a base salary at the rate of not
less than US $325,000 per year (“Base Salary”).
Executive’s Base Salary shall be paid in accordance with the
Company’s customary payroll practices. Each year during the
Employment Period, the Board or its designated committee shall
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, Executive shall continue to be eligible
for an annual bonus (the “Bonus”) determined in
accordance with the bonus policy applicable to other senior
executive officers of the Group in the same geographic location. At
the commencement of each calendar year or shortly thereafter during
the Employment Period, the Board or its designated committee shall
provide to Executive a target bonus amount for such year (the
“Target Bonus”). 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; provided , further , that
if Executive’s employment terminates under Section 6(a),
6(b), 6(d), 6(e) or 6(h) hereof, he shall receive a pro-rata
portion of his Bonus for the year in which termination occurs, as
determined in the good faith opinion of the Board or its designated
committee (a “Pro-Rata Bonus”), which shall be paid on
or before March 15 of the calendar year following the year in
which it was earned. Except as otherwise provided by the Board or
herein, Executive shall not be paid any portion of the Bonus unless
he is employed on the date the Company customarily pays annual
bonuses; however, for the avoidance of doubt, the preceding
requirement that Executive be employed on the payment date shall
not be applicable to the Pro-Rata Bonus, and the Pro-Rata Bonus
shall be fully earned as of the first day of the fiscal year in
which such termination occurs and shall become payable when bonuses
are paid to other senior executives of the Company and Executive,
but in no event later than March 15 of the year following the
year of termination.
(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 the amount of paid vacation per year that other senior
executive officers of the Company with similar tenure are entitled
under the Company’s policies, but in no event less than four
(4) weeks 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
that other senior executive officers of the Group with similar
tenure and in the same geographic location are entitled under the
Company’s policies.
(d)
Employee Benefit Plans . During the Employment Period,
Executive shall continue to be entitled to participate in such
employee benefit plans and insurance programs offered to other
senior executive officers of the Group in the same geographic
location, in accordance with the eligibility requirements for
participation therein.
(e)
Other Perquisites . During the Employment Period, Executive
shall be entitled to receive such other perquisites commensurate to
the perquisites provided to other Executive Vice Presidents of the
Group in the same geographic location, including without limitation
(i) housing allowance, (ii) club dues allowance,
(iii) auto allowance, (iv) travel allowance, (v) tax
and financial planning services and (vi) tax gross-up
allowance; provided , that in no event will the
housing allowance be less than US$10,000 per month during the
Employment Period.
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 a period
of at least 120 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 or any law.
(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 (i) habitual drug or alcohol use which impairs the
ability of Executive to perform his duties hereunder;
(ii) Executive’s conviction during the Employment Period
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 or any other member
of the Group; (iv) Executive willfully violating the
Restrictive Covenants set forth in Section 9 of this
Agreement; (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;
(vi) Executive otherwise breaches 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; or (vii) Executive’s willful misconduct which
is directly related to the employment relationship and which has a
material and detrimental effect on the Company or the Group. 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 deemed to be “willful” if Executive is specifically
directed to take (or not take) such action by the Board, unless
Executive in good faith believes such directives are illegal and
Executive promptly notifies the Board 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. For purposes of this Agreement, “Good
Reason” shall mean: (i) any material and adverse change
to Executive’s duties, responsibilities, reporting or
authority which is inconsistent with his title and position of
Executive Vice President and Chief Financial Officer, (ii) a
diminution of Executive’s title or position as Executive Vice
President and Chief Financial Officer; (iii) the relocation of
Executive’s office outside of Bermuda; (iv) a reduction
of Executive’s Base Salary; (v) a reduction of
Executive’s Target Bonus opportunity below 50% of Base Salary
or (vi) a material breach by the Company of any other
obligations of the Company under this Agreement which is not cured,
if curable, within ten (10) days following written notice
thereof.
(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 at
least sixty (60) 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; provided , that ,
the Company may elect to immediately terminate Executive without
Cause under this clause (e) and in lieu of advance notice,
continue to pay to Executive the same compensation and benefits
during the advance notice requirement set forth herein (e.g., sixty
(60) days less the period, if any, of advance notice) as if
Executive had continued to remain employed during such advance
notice period in addition to compensation to be paid to Executive
under Section 8(a).
(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 where such termination
shall not be effective until the end of the month immediately
following the last day of the quarter of the fiscal year in which
such Notice of Termination is given, and such termination shall not
in and of itself be, nor shall it be deemed to be, a breach of this
Agreement. The Company may elect to waive any such advance notice
requirement in which case Executive’s termination under this
Section 6(f) shall be effective as of the date the Company provides
in such waiver.
(g)
Expiration of the Employment Period . Executive’s
employment hereunder shall terminate upon either the Company or
Executive providing notice not to renew the Employment Period in
the manner contemplated pursuant to Section 2 of this
Agreement.
(h)
Retirement . Executive may terminate employment on account
of Retirement, provided , that , the Company and
Executive mutually agree on such termination. For purposes hereof,
Executive will be eligible for Retirement if the sum of
Executive’s age and years of service as an employee of the
Company equal or exceed fifty-five (55) and Executive is at
least fifty (50) years of age.
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 that
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), (iii) if Executive’s employment
is terminated pursuant to Section 6(c), 6(d), or 6(e), at
least sixty (60) days after the giving of such notice unless
the Company elects to terminate Executive’s employment
immediately and continue to provide compensation as set forth in
Section 6(e), in which case the Date of Termination shall be
the date set forth in the Notice of Termination, (iv) if
Executive’s employment is terminated pursuant to
Section 6(f), the end of the month following the last day of
the quarter of the fiscal year in which the Notice of Termination
is given (unless waived by the Company), (v) if
Executive’s employment is terminated pursuant to
Section 6(g), the expiration of the Employment Period, and
(vi) if Executive’s employment is terminated pursuant to
Section 6(h), the date mutually agreed upon by Executive and
the Company; 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 with respect to the 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 any other members of the Group related to
Executive’s employment (and termination of employment) with
the Company substantially in the form attached hereto as
Exhibit A (the “General Release”), subject to such
changes as may be required to preserve the intent thereof for
changes in applicable law; provided , that , if
Executive should fail to execute such General Release within
45 days following the later of (i) the Date of
Termination or (ii) the date Executive actually receives an
execution copy of such General Release which shall be delivered to
Executive within five (5) business days following his Date of
Termination, the Company shall not have any obligations to provide
the payments contemplated under this Section 8. 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 other members
of the Group or is or was serving at the request of the Company or
any other member of the Group, as a director, officer, member,
employee or agent of another corporation or a partnership, joint
venture, trust or other enterprise.
(a)
Termination by the Company without Cause or by Executive for
Good Reason . If Executive’s employment is terminated by
the Company without Cause under Section 6(e) or by Executive for
Good Reason under Section 6(d):
(i) as
soon as practicable following such termination but no later than
ninety (90) days after the Date of Termination, the Company shall
pay to Executive: his accrued, but yet unpaid Base Salary earned
through the Date of Termination, his accrued, but unpaid Bonus, if
any, 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”); and
(ii) provided Executive does not breach Section 9 or any
other term of this Agreement following his termination, in which
case all payments under this clause (ii) shall cease, the
Company shall pay to Executive, in 12 substantially equal monthly
installments, an amount equal to the product of (A) and (B),
where (A) is equal to 1/12 and (B) is equal to the sum of
(i) the greater of (x) Executive’s Base Salary in
effect on the Date of Termination or (y) Executive’s
Base Salary in effect immediately before a reduction of such Base
Salary that would constitute Good Reason, plus
(ii) Executive’s Bonus (if any) paid or payable to
Executive with respect to the fiscal year that ended immediately
prior to the fiscal year in which such Date of Termination
occurred, with such payments beginning on the first day following
the applicable revocation period set forth in the General Release
contemplated in this Section 8 (the “ Severance
Payment Date ”). Notwithstanding the foregoing, if the
Board (or its delegate) determines in its discretion that severance
payments due under this Section 8(a)(ii) are determined to be
“nonqualified deferred compensation” subject to
Section 409A of the Internal Revenue Code of 1986, as amended
(the “ Code ”), and that Executive is a
“specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and the regulations and
other guidance issued thereunder, then such severance payments
shall commence no earlier than the first day of the seventh month
following the month in which Executive’s termination occurs
(the “ Specified Employee Severance Payment Date
”) (with the first such payment being a lump sum equal to the
aggregate severance payments Executive would have received during
such six-month period if no such delay had been imposed); for
purposes of this Agreement, whether Executive is a “specified
employee” will be determined in accordance with the written
procedures adopted by the Board subsequent to the execution of this
Agreement which are incorporated by reference herein;
(iii) the
Company shall reimburse Executive within ninety (90) days of
the Date of Termination pursuant to Section 5(b) for reasonable
expenses incurred, but not paid prior to such termination of
employment;
(iv) Executive shall be entitled to any other rights,
compensation and/or benefits as may be due to Executive in
accordance with the terms and provisions of any agreements, plans
or programs of the Company; and
(v) with
respect to 35,000 of the 48,699 shares of restricted common stock
granted to Executive pursuant to the Employee Restricted Stock
Award Agreement, dated as of February 14, 2007, for purposes of
calculating the pro rata vesting contemplated in clause (b) of
Section 3 thereof, Executive shall be deemed to have worked an
additional 730 days (but in no event shall the numerator
exceed 1,095 for purposes of making such calculation).
Notwithstanding clause (ii) of this Section 8(a), if
Executive’s employment is terminated pursuant to Section 6(d)
or Section 6(e) in connection with, or upon the occurrence of, or
within twelve (12) months following, a Change in Control, as
defined below, in lieu of the payments described in clause
(ii) of this Section 8(a), Executive shall receive a lump
sum payment, within ten (10) days of the Severance Payment
Date or the Specified Employee Severance Payment Date, whichever is
applicable, equal to two times the sum of (x) his then current
Base Salary plus (y) his then current Target Bonus. 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 Bermuda 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 pr
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