SEPARATION OF EMPLOYMENT
AGREEMENT AND GENERAL RELEASE
This Separation of
Employment Agreement and General Release (the “
Agreement ”) is made as of September 23, 2005, by
and among ANNUITY AND LIFE RE (HOLDINGS), LTD., a Bermuda
corporation (“ Holdings ”), and ANNUITY AND LIFE
REASSURANCE, LTD., a Bermuda corporation (“ Annuity
Reassurance ” and together with Holdings, “
Employer ”), and JOHN F. BURKE (“
Executive ”).
WHEREAS Executive
is employed as President and Chief Executive Officer of Employer
pursuant to that certain Amended and Restated Employment Agreement
by and among Holdings, Annuity Reassurance and Executive, dated as
of July 28, 2003 (the “ Employment Agreement
”); and
WHEREAS Executive
and Employer mutually desire to terminate amicably
Executive’s employment with Employer; and
WHEREAS Executive
and Employer desire to set forth the terms and conditions for the
termination of their employment relationship and to resolve all
other matters between them.
NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
1.
(a) Executive, for and in consideration of the undertakings of
Employer set forth herein, does hereby permanently and irrevocably
sever his employment relationship with Employer effective as of
September 16, 2005, and Executive does hereby remise, release
and forever discharge Employer, its subsidiaries and affiliated
entities, and each of its and their officers, directors,
shareholders, employees, attorneys, insurers and other agents, and
its and their respective successors and assigns, heirs, executors,
administrators and representatives (hereinafter referred to
collectively as the “ Employer Releasees ”) of
and from any and all rights, obligations, promises, agreements,
losses, controversies, claims, actions, causes of action, suits,
debts, claims and demands, and expenses, including without
limitation attorneys’ fees and costs, of any nature
whatsoever, in law or in equity, whether known or unknown, asserted
or unasserted, which Executive ever had, now has, or hereafter may
have against the Employer Releasees, or any of them, relating to
Executive’s service as a director of Employer or any other
member of the Affiliated Group (as defined in the Employment
Agreement), Executive’s employment relationship with
Employer, the Employment Agreement or Executive’s separation
from Employer that arose or occurred at any time up to and
including the date hereof, including,
but not limited
to, any claims relating to Executive’s service as a director
of Employer or any other member of the Affiliated Group,
Executive’s employment relationship with Employer, the
Employment Agreement or Executive’s separation from Employer
arising under any foreign, Island of Bermuda or United States
federal, state or local statutes, ordinances or common law
principles, including without limitation the Employment Act 2000
(Bermuda), the Human Rights Act 1981 (Bermuda), Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974, the Family and Medical Leave Act of 1993, the
New York State Human Rights Law, the New York City Human Rights
Law, and other employee-protective law of any jurisdiction that may
apply.
(b) Employer
does hereby remise, release and forever discharge Executive of and
from any and all rights, obligations, promises, agreements, losses,
controversies, claims, actions, causes of action, suits, debts,
claims and demands, and expenses, including without limitation
attorneys’ fees and costs, of any nature whatsoever, in law
or in equity, whether known or unknown, asserted or unasserted,
which Employer ever had, now has, or hereafter may have against
Executive, relating to Executive’s service as a director of
Employer or any other member of the Affiliated Group (as defined in
the Employment Agreement), Executive’s employment
relationship with Employer, the Employment Agreement or
Executive’s separation from Employer that arose or occurred
at any time up to and including the date hereof, including, but not
limited to, any claims relating to Executive’s service as a
director of Employer or any other member of the Affiliated Group,
Executive’s employment relationship with Employer, the
Employment Agreement or Executive’s separation from Employer
arising under any foreign, Island of Bermuda or United States
federal, state or local statutes, ordinances or common law
principles, including without limitation the Employment Act 2000
(Bermuda), the Human Rights Act 1981 (Bermuda), Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974, the Family and Medical Leave Act of 1993, the
New York State Human Rights Law, the New York City Human Rights
Law, and other employee-protective law of any jurisdiction that may
apply. Notwithstanding the foregoing, Employer does not release
Executive from any claims involving knowing misrepresentation,
fraud, theft, intentional wrongdoing, intentional breach of
fiduciary duty, and/or intentional misappropriation of
Employer’s property.
2. Effective
as of September 16, 2005, Executive does hereby resign from
his position as a member of the Board of Directors of Employer and
from all positions that he holds or has ever held with Employer and
any other member of the Affiliated Group (as defined in the
Employment Agreement) and with any other entity with respect to
which Employer has requested Executive to perform
services.
3. In
consideration of this Agreement, Employer shall pay to Executive
the following amounts:
(a) Within
five business days following the date on which this Agreement
becomes irrevocable, (i) a lump sum severance payment in cash
of US$540,000, plus all accrued but unpaid salary of Executive
through September 16, 2005, if any, and (ii) a lump sum
payment
2
in cash of
US$200,000 in respect of Executive’s releases, waivers and
covenants contained in this Agreement.
(b) If the
Closing, as such term is defined in that certain Master Agreement,
dated as of August 10, 2005, by and among Annuity Reassurance,
Annuity and Life Reassurance America, Inc., Prudential Select Life
Insurance Company of America and Wilton Reinsurance Bermuda Limited
(as it may be amended from time to time) (the “ Master
Agreement ”), occurs, a lump sum in cash of US$1,160,000
(the “ Closing Payment ”) within five business
days following the date of the Closing. Executive acknowledges and
agrees that the Closing Payment shall only be payable by Employer
if the Closing actually occurs; provided, however , that if
(i) a Competing Acquisition Proposal (as that term is defined
in the Master Agreement) is formally proposed to Employer’s
Board of Directors on or before February 28, 2006 and the
Master Agreement has not otherwise been terminated at the time such
proposal is presented to the Board, (ii) the Board elects to
terminate the Master Agreement so that Employer can pursue that
Competing Acquisition Proposal in lieu of the transactions
contemplated by the Master Agreement and (iii) the final
closing of such Competing Acquisition Proposal occurs, then
Employer shall pay the Closing Payment to Executive within five
business days following the date of the closing of such Competing
Acquisition Proposal. Employer represents that it is not, as of the
date of this Agreement, pursuing a Competing Acquisition
Proposal.
4. As of the
date of this Agreement, all restricted stock held by Executive
shall immediately vest, and all stock options held by Executive
shall become immediately exercisable and shall remain exercisable
until the earlier of (a) fifth anniversary of the date of this
Agreement or (b) the end of the otherwise applicable term of
such stock options.
5. Except as
specifically set forth in this Agreement, it is expressly
understood
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