Exhibit 10.3
AGREEMENT AND RELEASE
This Agreement and Release
(“Agreement”) is entered into as of this 28th day of
July, 2008, between XL Capital Ltd. (the “Company”) and
Henry C.V. Keeling (the “Executive”).
The Executive and the Company agree as
follows:
1. The
employment relationship between the Executive and the Company will
terminate on August 1, 2008 (the “Termination Date”).
Effective as of the Termination Date, the Executive hereby resigns
all officer positions with the Company and its Affiliates (as
defined below) as well as his membership on all Boards of Directors
and Committees of the Company and its Affiliates.
2. In
consideration for the covenants of the Executive and the release of
claims by the Executive contained herein, and in full payment of
all obligations of any nature or kind whatsoever owed or owing to
the Executive by the Company and any of its Affiliates, the Company
shall pay, or provide benefits to, the Executive as
follows:
(a) the Company shall pay the Executive’s
base salary, at the rate in effect on the date hereof, through the
Termination Date;
(b) the Company shall make a lump sum cash payment
to the Executive on August 15, 2008 in an amount equal to
$3,362,500;
(c) the Executive shall be reimbursed for business
expenses reasonably incurred by him prior to the Termination Date
in accordance with the Company’s expense reimbursement
program;
(d) all stock options and restricted stock granted
to the Executive under the Company’s equity-based incentive
compensation plans other than those stock options granted during
calendar year 2008 (a complete list of which is attached hereto as
Exhibit A) will, to the extent unvested, become vested on the
Termination Date; all of the Company stock options granted before
January 1, 2000 held by the Executive will be exercisable for three
years following the Termination Date (but in no event beyond the
full ten year term of the option), after which time they will
terminate, and all options granted on or after January 1, 2000 will
remain exercisable for the duration of the term specified in the
applicable option agreement;
(e) with respect to the options to purchase 130,000
shares of Company stock granted to the Executive during calendar
year 2008, (i) 86,600 will become vested on the Termination Date
and they will terminate ninety (90) days following the Termination
Date, and (ii) 43,400 will become vested on the Termination Date
and
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remain
exercisable for the duration of the term specified in the
applicable option agreement;
(f) medical benefit plan coverage (including dental
and vision benefits if provided under the applicable plans) will be
continued for the Executive (and the Executive’s dependents,
if any) for a period of twenty-four (24) months following the
Termination Date under the Company’s medical benefit plans
upon substantially the same terms and conditions (including cost of
coverage to the Executive) as is then in existence for other
executives during the coverage period; provided, however ,
that, in the event the Executive becomes reemployed with another
employer and becomes eligible to receive medical benefits from such
employer, the medical benefits described herein shall immediately
cease;
(g) the Executive’s vested accrued benefits
under the Company’s pension and deferred compensation plans
shall be paid to the Executive in accordance with the terms of such
plans;
(h) with respect to each award made to the
Executive under the Company’s Long-Term Incentive Plan for
which the award period has not ended on or prior to the Termination
Date, to the extent the applicable performance metrics for the
award are met at the end of the applicable award period and an
amount would have been paid to the Executive under the award had
his employment continued through the applicable award payment date
(the “Award Amount”), the Executive will receive a
payment under the award equal to a pro rata portion of the Award
Amount, determined by multiplying the Award Amount by a fraction,
the numerator of which is the number of months (rounding a partial
month up to a full month) in the applicable award period through
the Termination Date, and the denominator of which is the full
number of months in the award period, and such amount, if any,
shall be paid, less applicable taxes required to be withheld, to
the Executive at the time payment for such award is made to active
employees of the Company;
(i) the Company shall make a lump-sum cash payment
on August 15, 2008 in an amount equal to the product of $1,012,500,
multiplied by a fraction, the numerator of which is 7 and the
denominator of which is 12;
(j) the Company shall pay directly or reimburse the
Executive, in either case on an after-tax basis to the Executive,
for reasonable moving expenses in relocating the Executive and his
immediate family and their household effects from Bermuda to a
location in the United Kingdom designated by the Executive
following the Executive’s Termination Date (provided that any
such expenses must be incurred by the Executive not later than the
last day of the calendar year following the calendar year which
includes the Termination Date), any such reimbursement for moving
expenses shall be made promptly by the Company and, in all events,
no later than the last day of
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the
second calendar year following the calendar year which includes the
Termination Date, and any such payment or reimbursement for taxes
shall be made on or before the due date of the Executive’s
tax return for the applicable year, but in no event later than the
end of the Executive’s taxable year next following the
Executive’s taxable year in which he remits the related
taxes; and
(k) the Company shall (w) continue to pay to the
Executive his current monthly housing allowance from the
Termination Date through the earlier of the end of calendar year
2008 or the date of termination of the applicable housing lease,
(x) reimburse the Executive for the cost of household improvements
incurred on or prior to April 30, 2008, (y) permit the Executive to
continue to occupy his Bermuda residence through May 1, 2009, and
(z) permit the Executive to continue to use his Company provided
automobile through May 1, 2009, provided that, in the case of such
use after December 31, 2008, all related expenses shall be the
responsibility of the Executive and the Executive will pay to the
Company the agreed value of any such use after De-cember 31,
2008.
3. The
Executive acknowledges and agrees that he is not entitled to any
salary, bonuses, long-term or short-term incentive compensation or
other compensation, payments, rights or benefits of any kind in
respect of his employment with the Company and/or other positions
with its Affiliates, the termination of such employment and/or
other positions, or under any of the compensation or benefit plans
of the Company or its Affiliates, except as provided by this
Agreement.
4. In
consideration of the above, the sufficiency of which the Executive
hereby acknowledges, the Executive, on behalf of the Executive and
the Executive’s heirs, executors, administrators,
representatives, agents and assigns (the “Releasors”)
hereby irrevocably and unconditionally releases and forever
discharges the Company and its members, shareholders, parents,
Affiliates, subsidiaries, divisions, any and all current and former
directors, officers, employees, agents, and contractors (in their
capacities as such) and their heirs and assigns, and any and all
employee pension benefit or welfare benefit plans of the Company or
its Affiliates, including current and former trustees and
administrators of such employee pension benefit and welfare benefit
plans (collectively, the “Releasees”), from all claims,
actions, causes of action, rights, judgments, obligations, damages,
charges, accountings, demands or liabilities of whatever kind or
character, in law or in equity, whether known or unknown,
(collectively, the “Claims”) which may have existed or
which may now exist from the beginning of time to the date of this
Agreement, including, without limitation, any Claims the Releasors
may have arising from or relating to the Executive’s
employment or termination from employment with the Company or its
Affiliates or relating to the Amended Employment Agreement between
the Company and the Executive dated as of December 1, 2006 (the
“Employment Agreement”) or any other agreement between
the Executive and the Company or an Affiliate, and any Claims the
Releasors may have under any federal, state,
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local or foreign statute, or
common law relating to employment, wages, hours, or any other terms
and conditions of employment. This release does not
release
