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
1
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.
(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. How
