EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement is made as of the 3rd day of February, 2000,
between ▇▇▇▇▇▇ Holdings, Inc. (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇ ("Executive")
and is being entered into in anticipation of the completion of the transactions
contemplated by the Agreement and Plan of Merger and Scheme of Arrangement dated
as of August 15, 1999, as amended (the "Merger Agreement") between the Company
and Terra Nova (Bermuda) Holdings, Ltd. ("Terra Nova") This Agreement shall
become effective as of, and only if, the Effective Time, as defined in the
Merger Agreement, occurs.
The parties agree as follows:
1. Employment and Duties. The Company employs the Executive as Executive
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Vice President-International Operations and as President and Chief Executive
Officer of the Company's subsidiary, Terra Nova or any other company or
subsidiary which is a successor to Terra Nova. During the term of this
Agreement Executive shall be nominated for election to the Company's Board of
Directors and the Company shall use its reasonable best efforts to cause
Executive to be elected and reelected to the Board. The Executive agrees to
devote full time and attention during normal business hours to the business of
the Company and its subsidiaries and affiliates and to perform duties normally
and properly incident to his position and such further duties as may be assigned
to him by the President or Board of Directors of the Company. The duties to be
performed by the Executive under this Agreement shall be primarily performed by
him in the London, England metropolitan area; provided, however, that the
Executive shall travel to the extent reasonably necessary to perform his duties
hereunder. The Executive shall not be required to reside or maintain a
residence outside of the London metropolitan area.
2. Term. The Company employs the Executive and the Executive agrees to
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serve the Company until one year from the Effective Time. This Agreement shall
then automatically be extended to end on the last day of the then current
calendar year and thereafter shall automatically be extended for additional
terms of one (1) year, unless either party notifies the other in writing at
least 60 days before the expiration of the term of this Agreement that it does
not wish to extend the term. If the Company notifies the Executive that it does
not wish to extend the term of this Agreement, the Company shall be deemed to
have terminated Executive's employment without cause and Executive shall be
entitled to the benefits specified in Paragraph 7(b) of this Agreement. If the
Executive notifies the Company that Executive does not wish to extend the term
of this Agreement, Executive shall be deemed to have voluntarily left the employ
of the Company and, except as otherwise expressly set forth in Paragraph 7(c) if
applicable, the Company's obligations to the Executive under this Agreement
shall terminate.
3. Salary. (a) During the term of this Agreement, the Company shall pay
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or shall cause its subsidiaries to pay the Executive a salary at a rate of not
less than four hundred sixty-two thousand dollars ($462,000) per year which sum
shall be payable in monthly installments. The Executive shall be entitled to
participate in the Company's bonus program and the Company agrees to review the
Executive's salary no less frequently than annually. In the event of an increase
in salary or the payment of a bonus, the other terms and conditions of this
Agreement shall remain in full force and effect. The salary in effect at any
given time is sometimes referred to in this Agreement as "Base Salary." There
shall be withheld from all amounts due the Executive such income taxes,
contributions and other amounts as may be required to be withheld under
applicable law.
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(b) As an inducement to Executive to execute this Agreement and enter
into Employment with the Company, the Company shall make a Special Bonus payment
to Executive in the amount of five million dollars ($5,000,000) in a combination
of cash and the Company's common stock as reasonably determined by the Company's
Board of Directors. One-half of the Special Bonus ("Earned Special Bonus")
shall vest and be deemed earned at the Effective Time and the remainder shall
vest in five equal increments every six-months from the Effective Time. Any
unvested amount of the Special Bonus shall be forfeited in the event of
Executive's termination of employment with the Company for whatever reason. For
purposes of this section any stock award shall be valued at $184.78 per share.
4. Other Benefits. During the term of this Agreement, the Executive shall
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be entitled to (i) participate in such employee benefit plans and programs as
are generally available to other officers of the Company's United Kingdom based
subsidiaries who hold positions of similar responsibility to those of Executive,
(ii) reimbursement, in accordance with policies and procedures established by
the Company and its subsidiaries from time to time, for all items of expense
reasonably and necessarily incurred by Executive on behalf of the Company, (iii)
such holidays as are generally available to employees of the Company, (iv) five
(5) weeks of annual vacation leave, which shall be non-cumulative and not
subject to compensation if not taken, and (v) perquisites as agreed by the
Company's President.
5. Termination by Death or Disability.
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(a) Should the Executive die during the term of employment, the
Company shall be obligated to pay any salary and benefits to which the Executive
may be entitled until the end of the payroll period in which the death occurs,
and the Company shall pay to the Executive's personal representatives amounts
equal to and payable at the same time as the
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installments of Base Salary theretofore regularly paid to the Executive for a
period of twelve months beginning as of the date of death.
(b) If, due to physical or mental illness, Executive shall be
disabled so as to be unable to perform any or all of the essential functions of
his position hereunder, with or without a reasonable accommodation, which
disability lasts for more than an uninterrupted period of at least 60 days or a
total of at least 90 days in any calendar year, the Company may terminate
Executive's employment without further liability under this Agreement except for
those continuing obligations imposed upon the Company pursuant to any applicable
long-term disability plan. After the date of termination, the Company shall pay
to the Executive or the Executive's personal representatives amounts equal to
and payable at the same time as the installments of Base Salary theretofore
regularly paid to the Executive for a period of twelve months beginning as of
the date of termination.
The onset of a condition of disability under this Agreement shall be
determined by the Board of Directors on the basis of (i) a written opinion of a
licensed physician certified in his field of specialization and acceptable to
the Board, or (ii) the receipt of, or entitlement by the Executive to disability
benefits under any insurance policy or employee benefit plan provided or made
available by the Company or its subsidiaries or under applicable laws.
6. Termination for Cause. The Company, by action of its Board of
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Directors, may at any time elect to terminate its obligations under this
Agreement for "cause" and remove the Executive from employment. Termination for
cause shall be made upon 30 days' written notice, and upon expiration of the 30-
day notice period, all obligations of the Company to the Executive under this
Agreement shall cease.
For purposes of this Agreement "cause" shall be only the following:
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(a) continued and deliberate neglect by the Executive, after receipt
of notice thereof, of employment duties other than as a result of Executive's
physical or mental disability;
(b) willful misconduct of the Executive in connection with the
performance of his duties, including by way of example but not limitation,
misappropriation of funds or property of the Company; securing or attempting to
secure personally any profit in connection with any transaction entered into on
behalf of the Company or violation of any code of conduct or standards of ethics
applicable to employees of the Company;
(c) conduct by the Executive which may result in material injury to
the reputation of the Company if the Executive were retained in his position
with the Company, including by way of example but not limitation, commission of
a felony, bankruptcy, insolvency or general assignment for the benefit of
creditors;
(d) active disloyalty such as aiding a competitor; or
(e) a breach by the Executive of paragraph 8 or 9 of this Agreement.
7. Other Termination.
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(a) Except as otherwise expressly set forth in Section 7(c) below, if
the Executive resigns or voluntarily leaves the employ of the Company, the
Company's obligations to the Executive under this Agreement shall terminate and
the Company shall have no further liability to the Executive under this
Agreement; provided however if Executive voluntarily leaves the employ of the
Company by virtue of the Company's failure to comply with the terms of this
Agreement then the Executive shall be entitled to the identical benefits and
compensation set forth in Section 7(b) hereof.
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(b) The Company, by action of its Board of Directors, may at any time
elect to terminate its obligations under this Agreement and remove Executive
from employment on 30 days notice. If the Company elects to terminate
Executive's employment without cause, the Executive shall be entitled to
receive, subject to compliance by the Executive with Sections 8 and 9 of this
Agreement, the Base Salary due under this Agreement for a period of twenty four
(24) months from the date of termination.
(c) Notwithstanding anything in this Agreement to the contrary, for
the 12-month period commencing on the Effective Time, Executive may, upon not
less than 60 days' written notice to the Company, voluntarily terminate his
employment for any reason and be entitled to the following payments:
i) Executive's full Base Salary through the date of termination (the
"Earned Salary"), plus;
ii) a cash amount (the "Severance Amount") equal to three times the
sum of:
1) Executive's annual Base Salary; and
2) the greater of (x) the highest bonus amount paid to or deferred
by Executive in respect of any of the last three fiscal years of
Terra Nova ending immediately prior to the Effective Time or (y) the
amount that would have been payable to Executive as a target bonus
for the last completed fiscal year of Terra Nova prior to the
Effective Time; provided however that any "success fee" or special
bonus paid in connection with the completion of the transactions
contemplated by the Merger Agreement shall not be included; plus
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3) any vested amounts or benefits owing to Executive under Terra
Nova's otherwise applicable employee benefit plans and
programs, including any compensation previously deferred by
Executive (together with any accrued earnings thereon) and not
yet paid by the Company and any accrued vacation pay not yet
paid by the Company (the "Accrued Obligations");
minus an amount equal to the Earned Special Bonus paid to Executive
pursuant to Section 3(b) above.
iii) if Executive is entitled to receive the Severance Amount, Executive
(and, to the extent applicable, his dependents) shall be entitled, after
the date of termination until the earlier of (1) the third anniversary
of the date of termination (the "End Date") or (2) the date Executive
becomes eligible for comparable benefits under a similar plan, policy or
program of a subsequent employer, to continue participation in all of
the Company's Executive and executive welfare and fringe benefit plans
(the "Benefit Plans") and to receive such perquisites as were generally
provided to Executive in accordance with the Company's policies and
practices immediately prior to the Effective Time. To the extent any
such benefits or perquisites cannot be provided under the terms of the
applicable plan, policy or program, the Company shall provide a
comparable benefit under another plan or from the Company's general
assets. Executive's participation in the Benefit plans and eligibility
for perquisites will be on the same terms and conditions that would have
applied had Executive continued to be employed by the Company through
the End Date.
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The Earned Salary and Severance Amount shall be paid in cash or as
otherwise reasonably directed by the Executive, based on a calculation of 36
equal installments, the first installment to be paid as soon as practicable but
in no event more than 10 business days following the date of termination (or at
such earlier date as may be required by law), each of the subsequent 22
installments to be paid on the same date of each calendar month following the
first payment and the final 13 installments to be paid as a lump sum on the same
date of the calendar month following the 23/rd/ payment; provided that any
unpaid installments shall be immediately paid as a lump sum in the event of
death or disability of the Executive or a Change in Control of the Company or
its successor. Accrued Obligations shall be paid in accordance with the terms
of the applicable plan, program or arrangement. For purposes of this Section
7(c), "Change in Control" of the Company means a change, as a result of a sale,
merger or other similar transaction or pursuant to a proxy contest, in a
majority of the Board of Directors of the Company who are directors at the
Effective Time.
(d) Except as expressly provided in the last sentence of this Section
7(d), the amounts payable to Executive pursuant to this Section 7 following
termination of his employment shall be in full and complete satisfaction of
Executive's rights under this Agreement and any other claims he may have in
respect of his employment by the Company or any of its subsidiaries. Such
amounts shall constitute liquidated damages with respect to any and all such
rights and claims and, upon Executive's receipt of such amounts, the Company
shall be released and discharged from any and all liability to Executive in
connection with this Agreement or otherwise in connection with Executive's
employment with the Company and its subsidiaries. Nothing in this Section 7(d)
shall be construed to release the Company from its commitment to indemnify
Executive and hold Executive
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harmless from and against any claim, loss or cause of action arising from or out
of Executive's performance as an officer, director or Executive of the Company
or any of its subsidiaries or in any other capacity, including any fiduciary
capacity, in which Executive served at the request of the Company to the maximum
extent permitted by applicable law.
8. Confidential Information and Trade Secrets. As consideration for and
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to induce the employment of the Executive by the Company, the Executive agrees
that:
(a) Except to the extent such information is generally known to the
public or in the industry in which the Company and its subsidiaries and
corporate affiliates are engaged all information relating to or used in the
business and operations of the Company and its subsidiaries and corporate
affiliates (including, without limitation, marketing methods and procedures,
customer lists, lists of professionals referring customers to the Company and
its subsidiaries and corporate affiliates, sources of supplies and materials and
business systems and procedures), whether prepared, compiled, developed or
obtained by the Executive or by the Company or any of its subsidiaries or
corporate affiliates prior to or during the term of this Agreement, are and
shall be confidential information and trade secrets ("Confidential Information")
and the exclusive property of the Company, its subsidiaries and corporate
affiliates.
(b) All records of and materials relating to Confidential
Information, whether in written form or in a form produced or stored by any
electrical or mechanical means or process and whether prepared, compiled or
obtained by the Executive or by the Company or any of its subsidiaries or
corporate affiliates prior to or during the term of this Agreement, are and
shall be the exclusive property of the Company or its subsidiaries or corporate
affiliates, as the case may be.
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(c) Except in the regular course of his employment or as the Company
may expressly authorize or direct in writing, the Executive shall not, during or
after the term of this Agreement and his employment by the Company, copy,
reproduce, disclose or divulge to others, use or permit others to see any
Confidential Information or any records of or materials relating to any such
Confidential Information. The Executive further agrees that during the term of
this Agreement and his employment by the Company he shall not remove from the
custody or control of the Company of its subsidiaries or corporate affiliates
any records of or any materials relating to such Confidential Information and
that upon the termination of this Agreement he shall deliver the same to the
Company and its subsidiaries and corporate affiliates.
9. Covenants.
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(a) As consideration for and to induce the employment of the
Executive by the Company, the Executive agrees that, except in the regular
course of his employment or as the Company may expressly authorize or direct in
writing, the Executive shall not, during the term of this Agreement and for a
period of two (2) years immediately following the termination of this Agreement
(the "Restriction Period"), directly or indirectly, either as an individual for
his own account, as a partner or joint venturer with any other person or entity,
as an employee, consultant, advisor, agent or representative of any other person
or entity or as an officer, director or shareholder of any corporation, (i) own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or serve as an employee, consultant, advisor, agent or
representative of any corporation, association, partnership, proprietorship or
other business entity that is engaged in any business activity, directly or
indirectly, in competition with any of the business operations or activities of
the
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Company or any of its subsidiaries or corporate affiliates, or (ii) employ or
offer to employ or retain the services of any officer, employee or agent then
employed or retained by the Company or any of its subsidiaries or corporate
affiliates or induce, encourage or solicit any such officer, employee or agent
to leave the employment or service of the Company or any of its subsidiaries or
corporate affiliates. This provision shall not, however, restrict the Executive
from making any investments in any company whose stock is listed on a national
securities exchange or actively traded in the over-the-counter market, so long
as such business or enterprise which is or might be directly or indirectly in
competition with any of the business operations or activities of the Company or
any of its subsidiaries or corporate affiliates,
(b) during the Employment Period and the Restriction Period, Executive
shall not directly or indirectly induce any employee of the Company or any of
its subsidiaries to terminate employment with such entity, and shall not
directly or indirectly, either individually or as owner, agent, employee,
consultant or otherwise, employ or offer employment to the person who is or was
employed by the Company or a subsidiary thereof unless such person shall have
ceased to be employed by such entity for a period of at least 6 months.
10. Survival of Covenants and Remedies. The agreements made by the
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Executive in paragraphs 8 and 9 shall survive the termination of this Agreement
and the Executive's employment. Each such agreement by the Executive shall be
construed as an agreement independent of any other provision of this Agreement,
and the existence of any claim or cause of action by the Executive against the
Company shall not constitute a defense to the enforcement of the provisions of
paragraphs 8 or 9. The Executive acknowledges and agrees
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that the scope and duration of the provisions of paragraphs 8 and 9 are
reasonable in light of Executive's position and responsibilities and that the
Company will sustain irreparable injury in the event of a breach or threatened
breach by the Executive of the provisions of paragraphs 8 or 9 and that the
Company does not and will not have any adequate remedy at law for such breach or
threatened breach. Accordingly, the Executive agrees that if he breaches or
threatens to breach any such covenant or agreement, the Company shall be
entitled to immediate injunctive relief. The foregoing shall not, however, be
deemed to limit the Company's remedies at law or in equity for any such breach
or threatened breach.
11. Notices. All notices, consents and other communications under this
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Agreement shall be in writing and shall be deemed to have been given, delivered
or made when delivered personally or when mailed by registered or certified
mail, postage prepaid and return receipt requested, addressed to the Company at
its principal office in Richmond, Virginia, and to the Executive at his
residence as shown upon the employment records of the Company, or to such other
address as either party may be notice specify to the other.
12. Modifications. No provision of this Agreement, including any
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provision of this paragraph, may be modified, deleted or amended in any manner
except by an agreement in writing executed by Executive and the Company.
13. Benefit. All of the terms of this Agreement shall be finding upon,
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inure to the benefit of and be enforceable by the Company and its successors and
assigns and by the Executive and his heirs and personal representatives.
14. Construction; Entire Agreement. This Agreement is executed and
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delivered in the Commonwealth of Virginia and shall be construed and enforced in
accordance with the laws of such state. This Agreement constitutes the entire
agreement between the parties
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hereto with respect to the matters referred to herein and supersedes all
previous agreements between Executive and Terra Nova and/or its subsidiaries. No
other agreement relating to the terms of Executive's employment by the Company,
Terra Nova or any of its subsidiaries, oral or otherwise, shall be binding
between the parties unless it is in writing and signed by the party against whom
enforcement is sought. There are no promises, representations, inducements or
statements between the parties other than those that are expressly contained
herein. Executive acknowledges that he is entering into this Agreement of his
own free will and accord, and with no duress, that he has read this Agreement
and that he understands it and its legal consequences.
15. Severability. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision.
In addition, if, at the time of enforcement of this Agreement, a court
holds that any restriction stated in this Agreement is unreasonable under the
circumstances then existing, the parties agree that the maximum restriction
reasonable under such circumstances shall be substituted for the stated
restriction.
16. Headings. The underlined headings provided in this Agreement are for
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convenience only and shall not affect the interpretation of this Agreement.
17. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original.
______________________________ ▇▇▇▇▇▇ Holdings, Inc.
Executive
By:_________________________
Title:______________________
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