Exhibit 10.1
EXECUTION COPY
EMPLOYMENT
AGREEMENT
This EMPLOYMENT
AGREEMENT is made and entered into as of this 10
th
day of June 2009, by
and between RenaissanceRe Holdings Ltd. (the “ Company
”) and Jeffrey D. Kelly (“ Employee
”).
W I T N E S
S E T H :
WHEREAS, the Company desires to
enter into this employment agreement embodying the terms of
Employee’s employment with the Company (this “
Agreement ”), and Employee desires to enter into this
Agreement and to accept such employment, subject to the terms and
provisions of this Agreement.
NOW, THEREFORE, in consideration of
the promises and mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of
which are mutually acknowledged, the Company and Employee hereby
agree as follows:
Section 1.
Definitions.
(a) “
Accrued Obligations ” shall mean (i) all accrued
but unpaid Base Salary through the date of termination of
Employee’s employment, (ii) any unpaid or unreimbursed
expenses incurred in accordance with Company policy, including
amounts due under Section 6 hereof, to the extent incurred
prior to termination of employment, (iii) any benefits
provided under the Company’s employee benefit plans upon a
termination of employment, in accordance with the terms therein,
including rights in respect of Awards granted under the Equity
Plans, (iv) rights to indemnification pursuant to
Section 11 below, and (v) except in the case of a
termination of Employee’s employment hereunder by the Company
for Cause, the right of Employee and his spouse to continue to
participate in the Company’s health plans (at
Employee’s, or Employee’s spouse’s, sole expense
at the then-standard current rates assessed by the Company for an
employee or an employee family, as applicable), as are in effect
from time to time, through the earliest to occur of (w) the
Employee’s sixty-fifth (65 th ) birthday (regardless of
whether Employee has previously died), (x) the date that
Employee materially breaches any provision of Section 8 below,
(y) following the expiration of the Non-Competition Period,
the date that Employee engages in any Competitive Activities, and
(z) the date on which Employee becomes eligible to enroll in
the health plans of any subsequent employer.
(b) “ Affiliate ”
shall mean, as to any Person, any other Person that controls, is
controlled by, or is under common control with, such
Person.
(c) “ Agreement ”
shall have the meaning first set forth above.
(d) “ Annual Bonus
” shall have the meaning set forth in Section 4(b)
below.
(e) “ Awards ”
shall mean any stock options, restricted stock or other stock-based
awards granted to Employee at any time under the Equity
Plans.
(f) “ Base Salary
” shall mean the salary provided for in Section 4(a) or
any increased salary granted to Employee pursuant to
Section 4(a) below.
(g) “ Board ”
shall mean the Board of Directors of the Company.
(h) “ Cause ”
shall mean (i) a material act or material acts of willful
misconduct by Employee in connection with Employee’s
employment duties, (ii) Employee’s willful failure
(except where due to physical or mental incapacity) or refusal to
perform in any material respect his duties or responsibilities
under this Agreement, (iii) misappropriation by Employee of
the assets or business opportunities of the Company or its
Affiliates, (iv) embezzlement or fraud committed by Employee,
at his direction, or with his prior personal knowledge,
(v) Employee’s conviction of, or plea of guilty or
nolo contendere to, the commission of a criminal act that
would constitute a felony in the United States of America, or
(vi) Employee’s willful and material breach of any of
the provisions set forth in Section 3, 8, or 10 of this
Agreement.
(i) “ Change in Control
” shall have the meaning ascribed to such term in the
Company’s 2001 Stock Incentive Plan, as amended and
restated.
(j) “ Code ”
shall mean the United States Internal Revenue Code of 1986, as
amended.
(k) “ Commencement Date
” shall mean July 6, 2009.
(l) “ Compensation
Committee ” shall mean the Compensation and Corporate
Governance Committee of the Board.
(m) “ Company ”
except as otherwise expressly set forth herein, shall have the
meaning set forth in the preamble hereto.
(n) “ Competitive
Activities ” shall mean any business activities in which
the Company or any of its Affiliates are engaged (or have committed
plans to engage) during the Term of Employment, or at the time of a
termination of Employee’s employment were engaged (or had
committed plans to engage following such termination of
employment).
(o) “ Confidential
Information ” shall have the meaning set forth in
Section 8(a) below.
(p) “ Developments
” shall have the meaning set forth in Section 8(e)
below.
(q) “ Direct Supervisor
” shall mean the person to whom Employee directly reports and
who supervises Employee’s work on a regular basis.
(r) “ Disability
” shall mean any physical or mental disability or infirmity
that has prevented the performance of Employee’s duties for a
period of ninety (90) consecutive calendar days or one hundred
eighty (180) non-consecutive calendar days in any three
hundred sixty-five (365) day period. Any question as to the
existence, extent, or potentiality of Employee’s Disability
upon which Employee and the Company cannot agree shall be
determined by a qualified, independent physician selected by the
Company and approved by Employee (which approval shall not be
unreasonably withheld). The determination of any such physician
shall be final and conclusive for all purposes of this
Agreement.
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(s) “ Employee ”
shall have the meaning set forth in the preamble hereto.
(t) “ Equity Plans
” shall mean the stock option and incentive plans adopted and
maintained by the Company from time to time.
(u) “ Exchange Act
” shall mean the United States Securities Exchange Act of
1934, as amended.
(v) “ Good Reason
” shall mean, without Employee’s consent, (i) an
adverse change in Employee’s employment title, (ii) a
material diminution in Employee’s employment duties,
responsibilities or authority, or the assignment to Employee of
duties that are materially inconsistent with his position,
(iii) any reduction in Employee’s Base Salary,
(iv) a relocation of Employee’s principal place of
employment to a location more than thirty-five (35) miles
farther from his current principal residence than the location at
which Employee was employed immediately preceding such change, or
(v) any breach by the Company of any material provision of
this Agreement.
(w) “ Interfering
Activities ” shall mean (i) encouraging, soliciting,
or inducing, or in any manner attempting to encourage, solicit, or
induce, any Person who is employed by, an agent of, or a service
provider to, the Company or any Affiliate thereof to terminate (or,
in the case of an agent or service provider, reduce) such
Person’s employment, agency, or service, as the case may be,
with the Company or such Affiliate, (ii) hiring any Person who
was employed by, an agent of, or a service provider to, the Company
or any Affiliate thereof within the six (6) month period prior
to the date of such hiring, or (iii) encouraging, soliciting,
or inducing, or in any manner attempting to encourage, solicit, or
induce, any customer, supplier, licensee, or other business
relation of the Company or any Affiliate thereof to cease doing
business with or reduce the amount of business conducted with
(including by providing similar services or products to any such
Person) the Company or such Affiliate, or in any way interfering
with the relationship between any such customer, supplier,
licensee, or business relation and the Company or such
Affiliate.
(x) “ Losses ”
shall have the meaning set forth in Section 11(a)
below.
(y) “ Non-Competition
Consideration ” shall have the meaning set forth in
Section 1(z)(ii) below.
(z) “ Non-Competition
Period ” shall mean the period commencing on the
Commencement Date and:
(i) in the case of Employee’s
termination of employment hereunder for any reason other than
pursuant to Section 7(f) or (h) below, ending on the
twelve (12) month anniversary of the date of such termination;
or
(ii) in the case of Employee’s
termination of employment hereunder pursuant to Section 7(f)
or (h) below, ending on the date of such termination;
provided , however , that the Company may elect to
extend the Non-Competition Period up to an additional twelve
(12) months following the date of such termination by
providing Employee written notice of such election within five
(5) business days following such
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termination specifying the
applicable period of extension, in which case, Employee shall be
entitled to receive an amount equal to his then-current Base
Salary, prorated to the extent the Company has elected to extend
the Non-Competition Period for less than twelve (12) months
(such amount, so prorated, as applicable, the “
Non-Competition Consideration ”), payable as
follows: (A) an amount equal to 75% of the
Non-Competition Consideration shall be paid in substantially equal
installments over the Non-Competition Period, in accordance with
the Company’s then-regular payroll practices, and (B) an
amount equal to 25% of the Non-Competition Consideration shall be
paid in a lump sum upon the expiration of the Non-Competition
Period, subject in the case of both (A) and (B) to
Employee’s compliance during such period with the terms and
conditions of this Agreement.
(aa) “ Non-Extension
Notice ” shall have the meaning set forth in
Section 2 below.
(bb) “ Non-Interference
Period ” shall mean the period commencing on the
Commencement Date and ending on the twelve (12) month
anniversary of Employee’s termination of employment hereunder
for any reason.
(cc) “ Person ”
shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company,
trust (charitable or non-charitable), unincorporated organization,
or other form of business entity.
(dd) “ Release Expiration
Date ” shall mean the date that is twenty-one
(21) days following the date upon which the Company timely
delivers Employee the release contemplated in Section 7(i)
below, or in the event that such termination of employment is
“in connection with an exit incentive or other employment
termination program” (as such phrase is defined in the Age
Discrimination in Employment Act of 1967), the date that is
forty-five (45) days following such delivery date.
(ee) “ Restricted Area
” means (i) Bermuda, (ii) any State of the United
States of America, (iii) the Republic of Ireland, and
(iv) any other jurisdiction in which the Company or its
Affiliates engage (or have committed plans to engage) in business
during the Term of Employment, or at the time of a termination of
Employee’s employment were engaged in business (or had
committed plans to engage in business following such termination of
employment).
(ff) “ Retirement
” shall mean a termination of employment by Employee without
Good Reason on or following Employee’s Retirement Eligibility
Date.
(gg) “ Retirement
Eligibility Date ” shall mean the first date on which the
sum of Employee’s age and years of service (in each case
measured on a daily basis) with the Company equals 65.
(hh) “ Severance Term
” shall mean the twelve (12) month period following the
date of Employee’s termination of employment hereunder due to
death or Disability, by the Company without Cause, by Employee with
Good Reason, or from a Non-Extension Notice from the
Company.
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(ii) “ Term of
Employment ” shall mean the period specified in
Section 2 below.
Section 2. Acceptance and
Term of Employment .
The Company agrees
to employ Employee, and Employee agrees to serve the Company, on
the terms and conditions set forth herein. The Term of Employment
shall commence on the Commencement Date and, unless terminated
earlier pursuant to Section 7 hereof, shall continue until the
first (1 st ) anniversary of the
Commencement Date; provided , however , that the Term
of Employment shall be extended automatically, without further
action by either the Company or Employee, by one
(1) additional year first on such anniversary of the
Commencement Date, and on each subsequent anniversary of the
Commencement Date thereafter, unless, not less than thirty
(30) days prior to the end of the Term of Employment
(including any extension thereof), either Employee or the Company
shall have notified the other in writing of his or its intention
not to further extend the Term of Employment (a “
Non-Extension Notice ”).
Section 3. Position, Duties,
and Responsibilities; Place of Performance .
(a) Employee shall have such duties
and responsibilities as specified by the Direct Supervisor. These
duties and responsibilities may be modified from time to time and
as are consistent with Employee’s position.
(b) Subject to the terms and
conditions set forth in this Agreement, Employee shall devote his
full business time, attention, and efforts to the performance of
his duties under this Agreement and shall not engage in any other
business or occupation during the Term of Employment, including,
without limitation, any activity that (x) conflicts with the
interests of the Company or its Affiliates, (y) interferes
with the proper and efficient performance of Employee’s
duties for the Company, or (z) interferes with
Employee’s exercise of judgment in the Company’s best
interests. Notwithstanding the foregoing, nothing herein shall
preclude Employee from (i) serving, with the prior written
consent of the Board, as a member of the boards of directors or
advisory boards (or their equivalents in the case of a
non-corporate entity) of non-competing businesses and charitable
organizations, (ii) engaging in charitable activities and
community affairs, and (iii) managing his personal investments
and affairs; provided , however , that the activities
set out in clauses (i), (ii), and (iii) shall be limited by
Employee so as not to interfere, individually or in the aggregate,
with the performance of his duties and responsibilities hereunder.
In the event the Company determines in good faith that
circumstances arising, directly or indirectly, from
Employee’s employment with any prior employer have resulted
in Employee’s inability to adequately perform his duties and
responsibilities for the Company hereunder, the Company may, in its
sole discretion, require Employee to resign from his employment
pursuant to Section 7(f), which determination and action by
the Company shall constitute neither a termination by the Company
without Cause nor an event of Good Reason hereunder.
(c) Employee’s principal place
of employment shall be at the Company’s principal executive
offices in Hamilton, Bermuda, although Employee understands and
agrees that he may be required to travel from time to time for
business reasons.
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Section 4. Compensation
. During the Term of Employment, Employee shall be entitled to the
following compensation, subject to such withholding and other
employee deductions as may be required by law:
(a) Base Salary . The Company
shall pay Employee a Base Salary at a rate to be determined by the
Board, upon recommendation of the Direct Supervisor, or if such
Direct Supervisor is not an officer of the Company, an officer of
the Company. Base Salary shall be payable in accordance with the
normal payroll procedures of the Company.
(b) Annual
Bonus . Employee shall be eligible for an annual cash incentive
bonus award determined by the Compensation Committee in respect of
each fiscal year during the Term of Employment (the “
Annual Bonus ”). The actual Annual Bonus payable in
respect of each fiscal year shall be based upon the level of
achievement of performance objectives for such fiscal year, as
determined by the Compensation Committee and communicated to
Employee. The Annual Bonus shall be paid to Employee at the same
time as annual bonuses are generally payable to other senior
executives of the Company, but in no event later than two and one
half (2 1 / 2 ) months following the end
of the fiscal year to which such Annual Bonus relates.
(c) Equity Plans . Employee
shall be eligible to participate in the Equity Plans and may
receive Awards, as determined by the Compensation Committee from
time to time, and subject to the terms and conditions of the Equity
Plans and any Award agreement between the Company and Employee
evidencing such Awards.
(d) Special Treatment of Certain
Equity Awards Upon Retirement Eligibility Date . If Employee
remains employed through the Retirement Eligibility Date, then on
the Retirement Eligibility Date, subject to Employee’s
continued compliance with the provisions of Section 8 hereof,
all Awards consisting of restricted stock granted to Employee at
any time through the Retirement Eligibility Date that Employee has
then held for at least one year and:
(i) that vest based solely on
continued service shall immediately fully vest, and
(A) Employee may satisfy any tax withholding obligations by
having shares of Company common stock withheld from such Award, and
further may sell vested shares in respect of such Award to the
extent necessary to pay taxes in respect of such vesting (after
taking into account any such tax withholding), and (B) the
balance of the shares in respect of such Award (and any interest in
such shares) may not be sold, pledged, hedged, or otherwise
transferred until such shares would have become vested in the
ordinary course without regard to this clause (i), without regard
for any termination of Employee’s employment prior to the
scheduled vesting date, and in determining when such shares
otherwise would have vested, any withheld or sold shares shall be
deemed to come from each vesting tranche on a pro rata basis;
and
(ii) that vest based on both
continued service and the attainment of performance goals shall no
longer be subject to service-based vesting conditions, shall remain
outstanding through the last day of the applicable performance
periods, without regard for any termination of Employee’s
employment prior to such date, and shall vest (or not) based on the
level of actual attainment of performance goals at such time or
times as would have been the case had the service vesting
provisions continued to apply and Employee remained employed
through all applicable service vesting periods.
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(e) Special Treatment of Certain
Equity Awards Upon a Change in Control . Upon the occurrence of
a Change in Control, provided Employee remains employed by the
Company through the date of such Change in Control, all Awards
consisting of restricted stock that vest based on both continued
service and the attainment of performance goals shall immediately
fully vest based on target level attainment of the performance
goals applicable to such Awards, or if greater, based on pro-forma
performance over the entire performance period extrapolated from
the performance run rate through the end of the fiscal year
immediately preceding the year in which such Change in Control
occurred.
Section 5. Employee Benefits
and Perquisites .
(a) Employee Benefits .
During the Term of Employment, Employee shall be entitled to
participate in health, insurance, retirement, and other benefits
generally provided to other senior executives of the Company from
time to time, including use of the Company’s airplane in
accordance with such policies as may be established by the
Compensation Committee from time to time. Employee shall also be
entitled to the same number of holidays, vacation days, and sick
days as are generally allowed to senior executives of the Company
in accordance with the Company policy in effect from time to
time.
(b) Perquisites .
(i) General . During the Term
of Employment, the Company shall provide Employee with customary
perquisites relating to housing, automobile use, and other
expenses, subject to applicable policies of the Company as approved
from time to time by the Compensation Committee.
(ii) Gross-Up . Other than
with respect to your personal use of the Company’s airplane,
to the extent the perquisites under Section 5(b)(i) are
considered income and increase Employee’s income tax
liability, the Company shall pay Employee a tax reimbursement
payment in an amount such that, after deduction for all income
taxes payable with respect to such tax reimbursement benefit, the
amount retained by Employee will be equal to the amount of such
increased income tax liability. Each tax reimbursement payment to
Employee pursuant to this Section 5(b)(ii) shall be made no
later than the last day of the calendar year next following the
calendar year in which Employee remits to the applicable taxing
authority such taxes being reimbursed.
Section 6. Reimbursement of
Business Expenses .
Employee is authorized to incur
reasonable business expenses in carrying out his duties and
responsibilities under this Agreement, and the Company shall
promptly reimburse him for all such reasonable business expenses,
subject to documentation in accordance with the Company’s
policy as in effect from time to time.
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Section 7. Termination of
Employment .
(a) General . The Term of
Employment shall terminate upon the earliest to occur of
(i) Employee’s death, (ii) a termination by reason
of a Disability, (iii) a termination by the Company with or
without Cause, (iv) a termination by Employee with or without
Good Reason, and (v) upon the close of business on the last
day of the Term of Employment (as provided in Section 2
above). Upon any termination of Employee’s employment for any
reason, except as may otherwise be requested by the Board in
writing and agreed upon in writing by Employee, Employee shall
resign from any and all directorships, committee memberships, and
any other positions Employee holds with the Company or any of its
Affiliates. Notwithstanding anything herein to the contrary, the
payment (or commencement of a series of payments) hereunder of any
nonqualified deferred compensation (within the meaning of
Section 409A of the Code) upon a termination of employment
shall be delayed until such time as Employee has also undergone a
“separation from service” as defined in Treas. Reg.
1.409A-1(h), at which time such nonqualified deferred compensation
(calculated as of the date of Employee’s termination of
employment hereunder) shall be paid (or commence to be paid) to
Employee on the schedule set forth in this Section 7 as if
Employee had undergone such termination of employment (under the
same circumstances) on the date of his ultimate “separation
from service.”
(b) Death; Termination due to
Disability . Employee’s employment shall terminate
automatically upon his death. The Company may terminate
Employee’s employment upon the occurrence of a Disability,
such termination to be effective immediately upon Employee’s
receipt of written notice of such termination. In the event
Employee’s employment is terminated due to his death or
Disability, Employee or his estate or his beneficiaries, as the
case may be, shall be entitled to:
(i) The Accrued
Obligations;
(ii) Any unpaid Annual Bonus in
respect of any completed fiscal year that has ended prior to the
date of such termination, such amount to be paid at the same time
it would have otherwise been paid to Employee had no such
termination occurred;
(iii) In the case of any termination
as a result of Employee’s Disability only, an amount equal to
75% of Employee’s then-current Base Salary, such amount to be
paid in substantially equal installments over the Severance Term,
in accordance with the Company’s then-regular payroll
practices;
(iv) In the case of any termination
as a result of Employee’s Disability
