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Execution Copy
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") dated as of July 26, 2007
between
Scottish Re (U.S.), Inc. (the "Company") and Meredith Ratajczak
(the "Employee")
(together, the "Parties").
WHEREAS, the Parties wish to establish the terms of
Employee's
continued employment with the Company.
Accordingly, the Parties agree as follows:
1. Employment and Acceptance. The Company shall employ the
Employee,
and Employee shall accept employment, subject to the terms of
this Agreement, on
May 7, 2007 (the "Effective Date").
2. Term. Subject to earlier termination pursuant to Section 5
of
this Agreement, this Agreement and the employment relationship
hereunder shall
continue from the Effective Date until the second anniversary of
the Effective
Date and shall renew for two (2) year intervals thereafter
unless either party
shall have given at least sixty (60) days advanced written
notice to the other
that it does not wish to extend the Term. As used in this
Agreement, the "Term"
shall refer to the period beginning on the Effective Date and
ending on the date
the Employee's employment terminates in accordance with this
Section 2 or
Section 5, including all renewal intervals. In the event of the
Employee's
termination of employment during the Term, the Company's
obligation to continue
to pay all base salary, as adjusted, bonus and other benefits
then accrued shall
terminate except as may be provided for in Section 5 of this
Agreement.
2.1 Change of Control. In the event of a Change of Control
of
the Company (as defined below) during the Term, the Term shall
renew for a two
(2) year period following the date of the Change of Control, and
subsequent
renewal periods shall begin (unless notice of non-renewal is
provided) from the
second anniversary of such Change of Control. For purposes of
this
sub-paragraph, "Change of Control" means:
(a) The acquisition by any person, or group of related
persons
for purposes of Section 13(d) of the Securities Exchange Act
of 1934, as amended, of beneficial ownership of more than
fifty percent (50%) of the then outstanding shares of voting
stock of the Company;
(b) Consummation of a reorganization, merger, consolidation
or
sale, or other disposition of all or substantially all of
the Company's assets, not including transactions where the
previous owners of fifty percent (50%) or more of the
Company's voting stock continue to own a majority of the
voting securities of the surviving entity or assets of the
Company; or
(c) Approval by the shareholders of the Company of a
complete
liquidation or dissolution of the Company.
<PAGE>
3. Duties and Title.
3.1 Title. The Company shall employ the Employee to render
exclusive and full-time services to the Company and its
subsidiaries. The
Employee shall serve in the capacity of Executive Vice
President, Chief Actuary,
and shall report directly to the Chief Executive Officer of
North American
Operations of the Company. The Employee shall also serve during
the Term in
executive positions for one or more of the Company's
subsidiaries and affiliates
for no additional consideration.
3.2 Duties. The Employee will have such authority and
responsibilities and will perform such executive duties as are
customarily
performed by an Executive Vice President, Chief Actuary of a
company in similar
lines of business as the Company and its subsidiaries or as may
be assigned to
Employee by the Global Chief Executive Officer, the Chief
executive Officer of
North American Operations or the Board of Directors of the
Company (the
"Board"). The Employee will devote all her full working-time and
attention to
the performance of such duties and to the promotion of the
business and
interests of the Company and its subsidiaries.
3.3 Location. The Employee shall perform her full-time
services
to the Company and its subsidiaries in the Company's Charlotte,
NC office;
provided that the Employee shall be required to travel as
necessary to perform
her duties hereunder.
4. Compensation and Benefits by the Company. As compensation for
all
services rendered pursuant to this Agreement, the Company shall
provide the
Employee the following during the Term:
4.1 Base Salary. During the first year of the Term, the
Company
agrees to pay to the Employee an annual base salary of $375,000,
payable in
accordance with the customary payroll practices of the Company
("Base Salary").
For the second year of the initial two year Term and in each
renewal year, at
the Company's discretion, Employee may receive an increase in
Base Salary.
4.2 Bonuses. During the Term, the Employee shall be eligible
to
receive an annual bonus ("Bonus") under a plan established by
the Company in the
amount determined by the Board based upon achievement of
performance measures
established by the Company and approved by the Board. The
Employee's target
bonus shall be seventy five percent (75%) of Base Salary.
Notwithstanding the
foregoing, for each of the calendar years ending on December 31,
2007 and
December 31, 2008, Employee shall receive a Bonus of not less
than fifty percent
(50%) of her then current Base Salary. The Employee's Bonus
shall be payable at
such times and in the manner consistent with the Company's
policies regarding
compensation of executive employees. In addition, the Company
may pay the
Employee such other bonuses as it may establish within its sole
discretion.
4.3 Signing Bonus. Prior to the date hereof, the Company has
paid to the Employee a one-time, lump-sum payment in the amount
of $137,500 (the
"Signing Bonus"). If the Employee's employment with the Company
is terminated
(x) by the Company for Cause or (y) by the Employee without Good
Reason within
one (1) year of the Effective Date, the Employee agrees to
return the entire
amount of the Signing Bonus to the Company.
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<PAGE>
4.4 Participation in Employee Benefit Plans. The Employee
shall
be entitled during the Term, if and to the extent eligible, to
participate in
all of the applicable benefit plans of the Company, which may be
available to
other senior executives of the Company, including, but not
limited to any
supplemental health insurance program offered to other senior
executives of the
Company. The Company may at any time or from time to time amend,
modify, suspend
or terminate any employee benefit plan, program or arrangement
for any reason
without the Employee's consent if such amendment, modification,
suspension or
termination is consistent with the amendment, modification,
suspension or
termination for other executives of the Company.
4.5 Equity Compensation. During the Term, the Employee shall
be
eligible to participate in the 2007 Scottish Re Group Limited
Stock Option Plan,
an equity incentive compensation plan established by an
affiliate of the Company
(the "Equity Incentive Plan"), pursuant to the terms of the
Equity Incentive
Plan and any applicable agreements thereunder as determined from
time to time by
the Board. The Employee shall receive an initial grant of the
option to purchase
225,000 ordinary shares of an affiliate of the Company (the
"Initial Grant")
pursuant to the terms of the Equity Incentive Plan and any
applicable agreements
thereunder.
4.6 Expense Reimbursement. During the Term, the Employee
shall
be entitled to receive reimbursement for all appropriate
business expenses
incurred by her in connection with her duties under this
Agreement in accordance
with the policies of the Company as in effect from time to
time.
4.7 Legal Fees. The Company shall pay or reimburse the
Employee
for all reasonable attorneys' fees and costs (not to exceed
$10,000) incurred by
the Employee in connection with advice pertaining to and the
negotiation of this
Agreement, upon presentation to the Company of bills for such
services and such
other supporting information as the Company may reasonably
require.
5. Termination of Employment.
5.1 By the Company for Cause or by the Employee Without Good
Reason or Due to Death or Disability. If: (i) the Employee's
employment
terminates due to her death; (ii) the Company terminates the
Employee's
employment with the Company for Cause (as defined below); (iii)
the Company
terminates the Employee's employment with the Company due to the
Employee's
Disability (as defined below); or (iv) Employee terminates her
employment
without Good Reason (as defined below), provided that the
Employee shall be
required to give the Company at least sixty (60) days prior
written notice of
such termination, the Employee or the Employee's legal
representatives (as
appropriate), shall be entitled to receive the following (the
"Accrued
Benefits"):
(a) the Employee's accrued but unpaid Base Salary and
benefits set forth in Sections 4.1 and 4.4, if any, to the date
of termination;
(b) the unpaid portion of the Bonus, if any, relating to the
calendar year prior to the calendar year of the Employee's
death, Disability,
termination by the Company for Cause or by the Employee without
Good Reason,
payable in accordance with Section 4.2;
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<PAGE>
(c) in accordance with the Company's policies, any accrued
but unused vacation time or paid time off; and
(d) expenses reimbursable under Section 4.6 incurred but not
yet reimbursed to the Employee to the date of termination.
For the purposes of this Agreement, "Disability" means a
determination by the Company in accordance with applicable law
that as a result
of a physical or mental injury or illness, the Employee is
unable to perform the
essential functions of her job with or without reasonable
accommodation for a
period of (i) ninety (90) consecutive days; or (ii) one hundred
eighty (180)
days in any one (1) year period.
For the purposes of this Agreement, "Cause" means, as
determined
by the Board (or its designee), with respect to conduct during
the Employee's
employment with the Company, whether or not committed during the
Term, (i)
commission of a felony by Employee; (ii) acts of dishonesty by
Employee
resulting or intending to result in personal gain or enrichment
at the expense
of the Company or its subsidiaries; (iii) Employee's material
breach of her
obligations under this Agreement; (iv) conduct by Employee in
connection with
her duties hereunder that is fraudulent, unlawful or grossly
negligent; (v)
engaging in personal conduct by Employee (including but not
limited to employee
harassment or discrimination, the use or possession at work of
any illegal
controlled substance) which materially discredits or damages the
Company or its
subsidiaries; (vi) contravention of specific lawful direction
from the person or
entity to whom the Employee reports or continuing inattention to
or continuing
failure to adequately perform the duties to be performed by
Employee under the
terms of Section 3.2 of this Agreement or (vii) breach of the
Employee's
covenants set forth in Section 6 below before termination of
employment;
provided, that, the Employee shall have fifteen (15) days after
notice from the
Company to cure the deficiency leading to the Cause
determination (except with
respect to (i) above), if curable. A termination for "Cause"
shall be effective
immediately (or on such other date set forth by the
Company).
For the purposes of this Agreement, "Good Reason" means,
without
the Employee's consent, (i) a material adverse reduction in
Employee's
responsibilities or duties; (ii) a reduction in the Employee's
Base Salary or
bonus opportunity; provided that, the Company may at any time or
from time to
time amend, modify, suspend or terminate any bonus, incentive
compensation or
other benefit plan or program provided to the Employee for any
reason and
without the Employee's consent if such modification, suspension
or termination
(x) is a result of the underperformance of the Employee or the
Company under its
business plan, or (y) is consistent with an "across the board"
reduction for all
similar level executive employees of the Company, and, in each
case, is
undertaken in the Board's reasonable business judgment acting in
good faith and
engaging in fair dealing with the Employee; (iii) a requirement
that (A) the
Employee relocate her personal residence from the Charlotte,
N.C. area or (B)
the Employee regularly commute to a principal place of business
outside the
Charlotte, N.C. area (excluding ordinary travel pursuant to
Section 3.3), or
(iv) the Company's material breach of the Agreement; provided
that a suspension
of the Employee and the requirement that the Employee not report
to work shall
not constitute "Good Reason" if the Employee continues to
receive the
compensation and benefits required by this Agreement. The
Company shall have
thirty (30) days after receipt of notice from the Employee in
writing specifying
the deficiency to cure the deficiency that would result in Good
Reason.
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<PAGE>
5.2 By the Company Without Cause or By the Employee for Good
Reason. If during the Term the Company terminates Employee's
employment without
Cause (which may be done at any time without prior notice) or
Employee
terminates her employment for Good Reason, upon at least thirty
(30) days prior
written notice, upon execution without revocation of a valid
release agreement
in a form reasonably acceptable to the Company and not in
violation of any
applicable laws (the "Release"), the Employee shall be entitled
to receive:
(a) the Accrued Benefits;
(b) an amount equal to two (2) times the sum of (x) the
highest Base Salary received by the Employee with respect to any
calendar year
during the previous two (2) calendar years of the Term, and (y)
the highest
Bonus amount received by the Employee with respect to any
calendar year during
the previous two (2) calendar years of the Term (the "Severance
Amount"),
payable in twelve (12) equal monthly installments, less standard
income and
payroll tax withholding and other authorized deductions.
Notwithstanding the
foregoing, if the Employee is a "specified employee," as such
term is defined in
Section 409A of the Internal Revenue Code of 1986, as amended,
and the
regulations promulgated thereunder (the "Code"), (x) one-half
(1/2) of the
Severance Amount shall be payable six (6) months following the
date the
Employee's employment terminates and (y) the remainder of the
Severance Amount
shall be payable in six (6) equal monthly installments
thereafter; and
(c) if the Employee elects continuing group coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act
of 1985, as
amended ("COBRA"), reimbursement of the cost of such
continuation coverage for
the earlier of (x) nine (9) months or (y) such earlier date that
the Employee is
covered under another group health plan, subject to the terms of
the plans and
applicable law.
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