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Exhibit 10.08
EMPLOYMENT AGREEMENT
(amended and restated as of August 19, 1996)
AGREEMENT, made and entered into this 19th day of August, 1996
by and between Mid Ocean Reinsurance Company Ltd., a Bermuda corporation (the
"COMPANY"), Mid Ocean Limited, a Cayman Islands corporation (the "PARENT") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "EXECUTIVE").
WHEREAS, on November 1, 1993, the company and the Executive
entered into an employment agreement (the "PRIOR AGREEMENT") pursuant to which
the Parent agreed to employ the Executive, and the Executive agreed to serve, as
Chief Financial and Administrative Officer, subject to the terms and conditions
of the Prior Agreement; and
WHEREAS, the Parent desires to amend and restate the Prior
Agreement as set forth herein and the Company desires to become a party;
WHEREAS, the Executive wishes to continue such employment with
the Parent under the terms and conditions of this Agreement;
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NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
Company, the Parent and the Executive (the "PARTIES") agree as follows:
1. EMPLOYMENT.
The Company and Parent hereby employ the Executive, and the
Executive hereby accepts employment with the Company, for the term of this
Agreement as set forth in Section 2, below, in the position and with duties and
responsibilities set forth in Section 3, below, and upon such other terms and
conditions as are hereinafter stated.
2. TERM OF EMPLOYMENT.
The term of employment under this Agreement shall commence on
August 19, 1996 (the "DATE OF THE AGREEMENT") and shall continue through the
close of business on the third anniversary of the Date of the Agreement, subject
to earlier termination as provided in Section 9, below. Thereafter such term
shall automatically be renewed for successive one-year periods unless the
Company and Parent give notice in writing to the Executive or the Executive
gives notice in writing to the Company and Parent at least 60 days prior to the
then scheduled expiration date that the term is not to so renew.
3. POSITIONS, DUTIES AND RESPONSIBILITIES.
(a) GENERAL. The Executive shall be employed as Chief
Financial and Administrative Officer and Senior Vice President of the Parent,
and Executive Vice President of the Company with, in each case, such duties and
responsibilities, including but not limited to
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financial and administrative duties and responsibilities, as may be assigned to
him by the President and Chief Executive Officer of the Parent or the Company,
as the case may be, (currently, ▇▇▇▇▇▇▇ ▇. Butt) or his successor. In carrying
out his duties and responsibilities, the Executive shall report to Mr. Butt or
his successor. During the term of this Agreement, the Executive shall devote his
full business time to the business and affairs of the Company and Parent,
including any corporation, partnership or other venture in which the Company or
Parent owns, directly or indirectly, 50 percent or more of the stock or, in the
case of any entity or venture other than a corporation, 50 percent or more of
the equity interest (an "AFFILIATE"), and shall use his best efforts, skills and
abilities to promote the Company's and Parent's interests.
(b) PERFORMANCE OF SERVICES. The Executive shall be stationed
in Bermuda and his services under this Agreement shall be generally performed in
Bermuda unless the Executive and the Parent's Board of Directors (the "PARENT
BOARD") and the Company's Board of Directors (the "BOARD") mutually agree in
writing to the performance of such duties in another location outside the United
States.
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(c) PERMITTED ACTIVITIES. Anything herein to the contrary
notwithstanding, nothing shall preclude the Executive from (i) serving on the
boards of directors of a reasonable number of other corporations or the boards
of a reasonable number of trade associations and/or charitable organizations,
(ii) engaging in charitable activities and community affairs and (iii) managing
his personal investments and affairs, provided such activities do not materially
interfere with the proper performance of his duties and responsibilities as
resident Underwriter for and Chief Financial and Administrative Officer of the
Parent and Executive Vice President of the Company.
4. BASE SALARY.
The Executive shall be paid a Base Salary by the Company at an
annual rate of US $310,000, payable in accordance with the Company's regular pay
practices. Such Base Salary shall be subject to annual review and may be
increased at the discretion of the Executive Committee of the Board.
5. ANNUAL BONUS.
In addition to the Base Salary provided for in Section 4,
above, the Executive may be awarded such annual bonuses as may be determined by
the Executive Committee of the Board, based on whatever incentive programs have
been adopted by the Company for senior executives of the Company, as well as the
performance of the Executive and the performance of the Company. Any bonus shall
be paid in cash in a lump sum promptly following determination thereof.
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6. STOCK OPTION.
The Parent has granted the Executive a 10-year option under
the Parent's 1993 Long-Term Incentive and Share Award Plan (the "PLAN") to
purchase shares of the Common Stock of the Parent referred to in the Plan at the
purchase price referred to therein (the "OPTION"). The Option shall vest and
become exercisable on a cumulative basis as to 20% of the shares subject to the
Option on the first anniversary of the date of the Agreement and an additional
20% of such shares on each anniversary thereafter until it is fully exercisable
and shall be subject to the terms and conditions of the Plan. The Option and any
other options to purchase equities securities of the Parent granted to Executive
under the Plan or otherwise shall be 100% exercisable upon a "CHANGE OF CONTROL"
(as defined in Exhibit A hereto).
7. EMPLOYEE BENEFIT PROGRAM.
During the term of the Executive's employment under this
Agreement, the Executive shall be entitled to participate in all employee
benefit programs of the Company and Parent as are in effect from time to time
and in which senior executives of the Company and Parent are eligible to
participate. It is expected that such programs will include standard
arrangements for medical, hospitalization, life, travel and accident insurance,
disability protection and retirement benefits. Coverage may, in the discretion
of the Company and Parent, be provided through purchase of separate insurance
contracts or through self-insurance.
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8. BUSINESS EXPENSE REIMBURSEMENT AND FRINGE BENEFITS.
(a) EXPENSE REIMBURSEMENT. During the term of the Executive's
employment under this Agreement, the Executive shall be entitled to receive
reimbursement by the Company or Parent for all reasonable out-of-pocket travel
expenses, entertainment expenses and other expenses incurred by him in
performing services under this Agreement, provided that the Executive submits
reasonable documentation with respect to such expenses. This shall include,
without limitation, reimbursements of any such costs for air fare (which the
Executive shall be entitled to on a first-class basis), hotel accommodations and
meals.
(b) FRINGE BENEFITS. During the term of the Executive's
employment under this Agreement, the Executive shall be entitled to participate
in any of the Company's or Parent's executive fringe benefits in accordance with
the terms and conditions of such arrangements as are in effect from time to time
for the Company's or Parent's senior executives. In all events, the Executive
shall be entitled during the period he is employed to the following:
(i) a living allowance of up to US $8,000 per month (to be
prorated for partial months) while the services are generally performed
in Bermuda,
(ii) use of an automobile in Bermuda,
(iii) reimbursement of the cost (including initiation fees and
annual dues) of membership in two clubs in Bermuda,
(iv) reimbursement by the Company or Parent for the reasonable
cost of financial and tax planning, such reimbursement not to exceed US
$10,000 per year; and
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(v) air fare for up to three round-trip first-class
non-business trips per year between New York and Bermuda by the
Executive and such members of his family as may accompany him (the
benefit under this Section 8(b)(iv) being in addition to any
reimbursement of air fare described in Section 8(a)).
9. TERMINATION OF EMPLOYMENT.
(a) TERMINATION DUE TO DEATH. In the event the Executive dies
during the term of employment, the Executive's spouse or, if she does not
survive him, the estate or other legal representative of the Executive shall be
entitled to receive the Executive's Base Salary as provided in Section 4, above,
at the rate in effect immediately prior to termination, through the end of the
month in which the Executive dies. In addition to the above, the estate or other
legal representative of the Executive shall be entitled to:
(i) any annual bonus awarded but not yet paid under Section 5,
above,
(ii) a pro rata bonus for the year of death, if the Executive
Committee of the Board so determines,
(iii) the rights under the Option and all other options as
provided in Section 6, above, in accordance with the terms thereof, and
(iv) any other rights and benefits available under employee
compensation or benefit programs of the Company and Parent, or their
equivalent, as provided in Section 7, above, and under business expense
reimbursement and fringe benefit programs as described in Section 8,
above, determined in accordance with the applicable terms and
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provisions of such programs.
(b) TERMINATION DUE TO DISABILITY. In the event the
Executive's employment with the Company and Parent is terminated due to his
disability, as determined under the Company's or Parent's long-term disability
plan, the Executive shall be entitled to:
(i) the Base Salary as provided in Section 4, above, through
the end of the month in which the Executive's employment terminates due
to disability,
(ii) any annual bonus awarded but not yet paid under Section
5, above,
(iii) the rights under the Option and all other options as
provided in Section 6, above, in accordance with the terms thereof,
(iv) any other rights and benefits available under employee
benefit programs of the Company and Parent, or their equivalent, as
provided in Section 7, above, including, without limitation, the terms
of any long-term disability plan, and under the business expense
reimbursement and fringe benefit programs as described in Section 8,
above, determined in accordance with the applicable terms and
provisions such programs.
(c) TERMINATION FOR CAUSE.
(i) The employment of the Executive under this Agreement may
be terminated by the Parent or the Company for Cause. For this purpose,
"CAUSE" shall mean:
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(A) conviction of the Executive of a felony involving
moral turpitude, or
(B) the Executive, in carrying out his duties for the
Company or Parent under this Agreement, has been guilty of (I)
gross neglect or (II) gross misconduct.
(ii) In the event of a termination for Cause under Section
9(c)(i) above, the Executive shall be entitled only to:
(A) Base Salary as provided in Section 4, above, at
the rate in effect at the time of his termination of
employment for Cause, through the date on which termination
for Cause occurs,
(B) the rights, if any, under the Option and all
other options as provided in Section 6, above, or otherwise,
determined in accordance with the terms thereof, and
(C) any other rights and benefits, if any, available
under employee benefit program of the Company and Parent, or
their equivalent, as provided in Section 7, above, and under
the business expense reimbursement and fringe benefit programs
as described in Section 8, above, determined in accordance
with the applicable terms and provisions of such programs.
(d) TERMINATION WITHOUT CAUSE.
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(i) Anything in this Agreement to the contrary
notwithstanding, the Executive's employment may be terminated without
Cause as provided in this Section 9(d). A termination due to
disability, as described in Section 9(b), above, or a termination for
Cause, as described in Section 9(c), above, shall not be deemed a
termination without Cause under this Section 9(d).
(ii) In the event the Executive's employment is terminated
without Cause prior to Change in Control or following the first
anniversary of a Change in Control, the Executive shall be entitled to:
(A) Base Salary as provided in Section 4, above, at
the rate in effect in accordance with Section 4, above,
immediately prior to such termination, payable in equal
monthly installments for a period of 12 months following the
date of such termination,
(B) any annual bonus awarded but not yet paid under
Section 5, above,
(C) the rights under the option and all other options
as provided in Section 6, above, determined in accordance with
the terms thereof,
(D) continued coverage under the employee benefit
programs of the Company, or their equivalent, as provided in
Section 7, above, in which the Executive was participating at
the time of his termination of employment for the period of
salary continuation or, if longer, for the period provided in
such programs; provided, however, that any such continued
coverage shall be offset by
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comparable coverage provided to the Executive in connection
with subsequent full-time employment and, to the extent the
Company is unable to continue such coverage, the Company shall
provide the Executive with economically equivalent benefits
determined on an after-tax basis, and
(E) any other rights and benefits available under
employee benefit programs of the Company and Parent, or their
equivalent, as provided in Section 7, above, and under the
business expense reimbursement and fringe benefit programs as
described in Section 8, above, determined in accordance with
the applicable terms and provisions of such programs.
(iii) In the event the Executive's employment is terminated by
the Company or Parent without Cause within the 12-month period
following a Change in Control (the "POST-CHANGE PERIOD") or the
Executive terminates his employment for "GOOD REASON" (as defined in
Exhibit B hereto) during the Post-Change Period, the Executive shall be
entitled to:
(A) Base Salary as provided in Section 4, above, at
the rate in effect in accordance with Section 4, above,
immediately prior to such termination, payable in equal
monthly installments for a period of 24 months following the
date of such termination,
(B) an amount equal to two times the largest annual
bonus awarded to the Executive in the three-year period prior
to the year in which a Change in Control occurs, paid in equal
monthly installments for the period of Base Salary
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continuation.
(C) an amount equal to the annual bonus that would
have been awarded to Executive in respect of the year in which
the Change in Control occurs, multiplied by a fraction, the
numerator of which is the number of months or fraction thereof
in which the Executive was employed by the Company in such
year, and the denominator of which is 12.
(D) the rights under the Option, and all other
options as provided in Section 6, above, determined in
accordance with the terms thereof,
(E) continued coverage under the employee benefit
programs of the Company and Parent, or their equivalent, as
provided in Section 7, above, in which the Executive was
participating at the time of his termination of employment for
the period of Base Salary continuation or, if longer, for the
period provided in such programs; provided, however, that any
such continued coverage shall be offset by comparable coverage
provided to the Executive in connection with subsequent
full-time employment and, to the extent the Company and Parent
are unable to continue such coverage, the Company and Parent
shall provide the Executive with economically equivalent
benefits determined on an after-tax basis,
(F) any other rights and benefits available under
employee benefit programs of the Company and Parent, or their
equivalent, as provided in Section 7, above, and under the
business expense reimbursement and fringe benefit programs as
described in Section 8, above, determined in accordance with
the
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applicable terms and provisions of such programs; and
(G) full and immediate vesting under the Company's
pension plans as of the date of termination, to the extent
permitted by applicable law.
(iv) If, at any time during the term of the Executive's
employment hereunder, the Executive fails to be appointed (or
re-appointed, as appropriate) as Chief Financial and Administrative
Officer and Senior Vice President of the Parent and Executive Vice
President of the Company, the Executive shall have the right to
terminate his employment and such termination, if prior to a Change in
Control, shall be deemed a termination by the Company and Parent
without Cause under Section 9(d)(H), above, or, if following a Change
in Control, shall be deemed a termination by the Company and Parent
without Cause under Section 9(d)(iii), above, provided that the
Executive in either case shall have given the Company and Parent
written notice of his decision and shall not within 10 business days
thereafter have been reinstated to the relevant positions.
(e) VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may
voluntarily terminate his employment prior to the expiration of the term of this
Agreement. Such termination shall constitute a voluntary termination and, except
as provided in Section 9(d)(iii), above, in such event the Executive shall be
limited to the same rights and benefits as applicable to a termination by the
Company or Parent for Cause as provided in Section 9(c), above. A voluntary
termination under this Section 9(e) shall not be deemed a breach of this
Agreement. A termination of the Executive's employment due to disability as
described in Section 9(b), above, a termination by the Executive which the
Executive is entitled to treat as a termination by the
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Company or Parent pursuant to Section 9(d), above, or a termination by the
Executive under Section 9(d)(iii), above, shall not be deemed a voluntary
termination within the meaning of this Section 9(e).
10. NO MITIGATION; NO OFFSET.
In the event of any termination of employment under Section 9,
above, the Executive shall be under no obligation to seek other employment, and
there shall be no offset against amounts due the Executive under this Agreement
on account of any remuneration attributable to any subsequent employment that he
may obtain.
11. NONCOMPETITION AND NONSOLICITATIAN.
(a) NONCOMPETITION. During the term of his employment and for
a period of 24 months thereafter, the Executive shall not engage in any
activities in Bermuda if such activities involve business that is competitive
with that being conducted by the Company or Parent. For purposes of this Section
11, the Company or Parent shall be deemed to include any entity that was an
Affiliate of the Company or Parent during the period of the Executive's
employment as well as the time in question.
(b) NONSOLICITATION. During the term of the Executive's
employment under this Agreement, and for a period of 24 months following
termination of employment, the Executive shall not encourage any other employee
of the Company or Parent to leave the employ of the Company or Parent.
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12. CONFIDENTIAL INFORMATION.
The Executive covenants that he shall not, without the prior
written consent of the Board or Parent Board or a person authorized by the Board
or Parent Board, disclose to any person, other than an employee of the Company
or Parent Board or other person to whom disclosure is necessary to the
performance by the Executive of his duties in the employ of the Company or
Parent Board, any confidential proprietary information about the Company or an
Affiliate or their respective businesses, unless and until such information has
become known to the public generally (other than as a result of unauthorized
disclosure by the Executive) or unless he is required to disclose such
information by a court or by a governmental body with apparent authority to
require such disclosure. The foregoing covenant by the Executive shall be
without limitation as to time and geographic application.
13. WITHHOLDING.
Anything in this Agreement to the contrary notwithstanding,
all payments required to be made by the Company or Parent hereunder to the
Executive shall be subject to withholding of such amounts relating to taxes as
the Company or Parent may reasonably determine it should withhold pursuant to
any applicable law or regulation. In lieu of withholding such amounts, in whole
or in part, the Company or Parent may, in its sole discretion, accept other
provision for payment of taxes as required by law, provided it is satisfied that
all requirements of law affecting its responsibilities to withhold such taxes
have been satisfied.
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14. ENTIRE AGREEMENT.
This Agreement, together with the Exhibits, contains the
entire agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Company, the Parent and the
Executive with respect thereto.
15. ASSIGNABILITY; BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors, heirs and assigns. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
by the Executive other than his rights to compensation and benefits hereunder,
which may be transferred by will or operation of law subject to the limitations
of this Agreement. No rights or obligations of the Company or Parent under this
Agreement may be assigned or transferred by the Company or Parent except that
such rights or obligations may be assigned or transferred pursuant to a merger
or consolidation in which the Company or Parent is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the Company
or Parent, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company or Parent and such assignee or
transferee assumes the liabilities, obligations and duties of the Company or
Parent, as contained in this Agreement, either contractually or as a matter of
law.
16. INDEMNIFICATION.
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The Executive shall be provided indemnification by each of the
Company and Parent to the maximum extent permitted under the laws of their
respective jurisdictions of incorporation and their respective charter
documents. In addition, he shall be covered by a directors' and officers'
liability policy with coverage for him to the extent of US $50,000,000.
17. EXCISE TAX ADJUSTMENT PAYMENTS
(a) PAYMENTS. In the event that it is determined that any
payment or distribution by the Company or Parent to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, other than any payment pursuant to
this Section 17(a), (a "PAYMENT"), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "CODE") or
any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "EXCISE TAX"), then Executive shall be entitled to receive
from the Company or Parent, within 15 days following the determination described
in Section 17(b), below, an additional payment ("EXCISE TAX ADJUSTMENT PAYMENT")
in an amount such that after payment by Executive of all applicable Federal,
state and local taxes (computed at the maximum marginal rates and including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax, imposed upon the Excise Tax Adjustment Payment, Executive retains an amount
of the Excise Tax Adjustment Payment equal to the Excise Tax imposed upon the
Payments.
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(b) DETERMINATIONS. All determinations required to be made
under this Section 17, including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be made by
KPMG Peat Marwick LLP, or such other national accounting firm as the Company or
Parent may designate prior to a Change of Control, which shall provide detailed
supporting calculations to the Company and the Executive within 15 business days
of the date of termination of Executive's employment. Except as hereinafter
provided, any determination by KPMG Peat Marwick LLP, or such other national
accounting firm as the Company or Parent may designate prior to a Change of
Control, shall be binding upon the Company, Parent and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination hereunder, it is possible that (x) certain
Excise Tax Adjustment Payments will not have been made by the Company or Parent
which should have been made (an "UNDERPAYMENT"), or (y) certain Excise Tax
Adjustment Payments will have been made which should not have been made (an
"OVERPAYMENT"), consistent with the calculations required to be made hereunder.
In the event of an Underpayment, such Underpayment shall be promptly paid by the
Company or Parent to or for the benefit of the Executive. In the event that the
Executive discovers that an Overpayment shall have occurred, the amount thereof
shall be promptly repaid to the Company or Parent.
18. SETTLEMENT OF DISPUTES.
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Any dispute between the Parties arising from or relating to
the terms of this Agreement or the Executive's employment with the Company or
Parent shall be resolved by arbitration held in New York City in accordance with
the rules of the American Arbitration Association. All costs associated with any
arbitration, including all legal expenses, for the Parties shall be borne by the
Company and Parent.
19. AMENDMENT OR WAIVER.
No provision in this Agreement may be amended unless such
amendment is agreed to in writing, signed by the Executive and by a duly
authorized officer of the Company and Parent. No waiver by any Party of any
breach by the other Party of any condition or provision of this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the Executive or a duly authorized
officer of the Company and Parent, as the case may be.
20. NOTICES.
Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or sent by courier, or by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the Party concerned
at the address indicated below or to such changed address as such Party may
subsequently by similar process give notice of:
If to the Company: Mid Ocean Reinsurance Company Ltd.
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Richmond House
12 Par-la-Ville Road
P.O. Box HM 1066
▇▇▇▇▇▇▇▇ ▇▇ EX Bermuda
If to the Parent: Mid Ocean Limited
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
P.O. Box HM 1066
▇▇▇▇▇▇▇▇ ▇▇ EX Bermuda
If to the Executive: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Oleander Brakes
▇▇ ▇▇. ▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇
▇▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
21. SEVERABILITY.
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
22. SURVIVORSHIP.
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The respective rights and obligations of the Parties shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
23. REFERENCES.
In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
24. GOVERNING LAW.
This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York without
reference to the principles of conflict of laws.
25. HEADINGS.
The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
26. COUNTERPARTS.
This Agreement may be executed in one or more counterparts.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
MID OCEAN LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇. Butt
-------------------------------
MID OCEAN REINSURANCE COMPANY LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT A
CHANGE IN CONTROL
A "Change in Control" shall be deemed to have occurred if:
(1) on or after the date hereof, any person (which, for all
purposes hereof, shall include, without limitation, an
individual, sole proprietorship, partnership, unincorporated
association, unincorporated syndicate, unincorporated
organization, trust, body corporate and a trustee, executor,
administrator or other legal representative), or any group
(within the meaning of Section 13(d)(3) of the United States
Securities Exchange Act of 1934, as amended), becomes the
beneficial owner, directly or indirectly, of securities of the
Parent representing, or acquires the right to control or
direct, or to acquire through the conversion or exchange of
securities or the exercise of warrants or other rights to
acquire securities ("Beneficial Owner"), 20% or more of the
combined voting power of the Parent's then outstanding
securities ("Significant Owner") (excluding any person who or
group which, together with all affiliates and associates of
such person or group, would on the date of this Agreement but
for this clause be a Significant Owner as long as such person
or group does not subsequently become the Beneficial Owner of
any additional securities of the Parent in any manner other
than a change in the aggregate number of the outstanding
securities of the Parent, and other than pursuant to any
purchase or acquisition permitted by the first full paragraph
of the second page of that Standstill
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Agreement dated June 2, 1995 between the Parent and EXEL
Limited) and, for the purposes hereof, "voting power" means
the right to vote for the election of directors; or
(ii) at any time subsequent to the execution of this contract there
shall be elected or appointed to the Parent Board any director
or directors whose appointment or election by the Parent's
shareholders was not approved by a vote of at least a majority
of the directors then still in office who were either
directors at the date hereof or whose election or appointment
or nomination for election was previously so approved.
The determination to be made pursuant to clause (i) above shall be made on the
basis that (x) all securities beneficially owned by the person or group or over
which control or direction is exercised by the person or group which are
convertible or exchangeable into securities carrying voting rights have been
converted or exchanged and all options, warrants, exchange rights or other
rights which may be exercised to acquire securities beneficially owned by the
person or group or over which control or direction is exercised by the person or
group have been exercised, and (y) no such convertible or exchangeable
securities have been converted or exchanged by any other person and no such
options, warrants, exchange rights or other rights have been exercised by any
other person.
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EXHIBIT B
GOOD REASON
For purposes of this Agreement, "Good Reason" shall mean any
of the following (without Executive's express prior written consent):
(i) (A) The assignment to Executive of duties materially
inconsistent with Executive's position (including
duties, responsibilities, status, titles or offices
as set forth in Section 2 hereof); or (B) any
elimination or reduction of Executive's duties or
responsibilities except in connection with the
termination of Executive's employment for Cause,
disability or as a result of Executive's death or by
Executive other than for Good Reason;
(ii) The (A) reduction in Executive's Base Salary from the
level in effect immediately prior to, or (B) payment
of an annual bonus in an amount less than the most
recent annual bonus paid prior to the Change in
Control;
(iii) The failure by the Company or Parent to obtain the
specific assumption of this Agreement by any
successor or assign of Parent or the Company or any
person acquiring substantially all of the Company's
or Parent's assets;
(iv) Any material breach by the Company or Parent of any
provision of this Agreement or any agreements entered
into pursuant thereto;
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(v) Requiring Executive to be based at any office or
location other than those described in Section 2(a)
hereof, except for travel reasonably required in the
performance of the Executive's responsibilities; or
(vi) During the twelve month period following a Change in
Control, (A) the failure to continue in effect any
compensation plan in which Executive participates at
the time of the Change in Control unless an equitable
arrangement (embodied in an ongoing substitute or
alternative plan providing Executive with
substantially similar benefits) has been made with
respect to such plan in connection with the Change in
Control, or the failure to continue Executive's
participation therein on substantially the same
basis, both in terms of the amount of benefits
provided and the level of his participation relative
to other participants, as existed at the time of the
Change in Control; or (B) the failure to continue to
provide Executive with benefits at least as favorable
in the aggregate as those enjoyed by him under any of
the Company's or Parent's pension, life insurance,
medical, health and accident, disability, deferred
compensation or savings plans in which he was
participating at the time of the Change of Control,
the taking of any action which would directly or
indirectly materially reduce any of such benefits or
deprive Executive of any fringe benefit enjoyed by
him at the time of the Change of Control, or the
failure to provide him with the number of paid
vacation days to which he was entitled on the basis
of the Company's practice with respect to him as in
effect at the time of the Change of Control.
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