Exhibit 10.11.5
EMPLOYMENT
AGREEMENT
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▇▇▇▇▇▇▇ ▇. BUTT
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EMPLOYMENT AGREEMENT
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(amended and restated as of August 19, 1996)
AGREEMENT, made and entered into as of the 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
▇▇▇▇▇▇▇ ▇. Butt (the "EXECUTIVE").
WHEREAS, on May 1, 1993, the Company and the Executive entered into an
employment agreement (the "MAY 1 AGREEMENT") pursuant to which the Company
agreed to employ the Executive, and the Executive agreed to serve, as Vice
Chairman, subject to the terms and conditions of the May 1 Agreement; and
WHEREAS, on May 21, 1993, the Company, Parent and Executive agreed to
amend the May 1 Agreement (as amended, the "MAY 21 AGREEMENT") to provide, among
other things, that the Parent would employ, and Executive would serve, as
President and Chief Executive Officer of Parent, subject to the terms and
conditions of the May 21 Agreement; and
WHEREAS, the Company and the Parent desire to amend and restate the
May 21 Agreement as set forth herein; and
WHEREAS, the Executive wishes to continue such employment with the
Company and Parent under the terms and conditions of this Agreement;
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.
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The Company and Parent hereby employ the Executive, and the Executive
hereby accepts employment with the Company and Parent, 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.
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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 six months prior to the then
scheduled expiration date that the term is not to so renew.
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3. POSITIONS, DUTIES AND RESPONSIBILITIES.
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(A) GENERAL. The Executive shall be employed as President and Chief
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Executive Officer of the Company and Parent, with such duties and
responsibilities, including but not limited to general management
responsibilities over the business and operations of the Company and the Parent,
as may be assigned to him by the Chairman of the Board of Directors of the
Company (the "BOARD") or the Chairman of the Board of Directors of the Parent
(the "PARENT BOARD"), as the case may be. In carrying out his duties and
responsibilities, the Executive shall report to the Chairman of the Board or to
the Chairman of the Parent Board, as the case may be. 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) MEMBERSHIPS. It is the intention of the Parties that the
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Executive shall be nominated and elected and shall thereafter serve as a member
of the Board, as member of the Parent Board and as a member of the Executive
Committee of the
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Board and as a member of the Executive Committee of the Parent Board.
(C) PERFORMANCE OF SERVICES. The Executive's services under this
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Agreement shall be performed outside the United States and generally in Bermuda
unless the Executive and the Board and the Parent Board mutually agree in
writing to the performance of such services in another location outside the
United States.
(D) PERMITTED ACTIVITIES. Anything herein to the contrary
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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 the
Company's Vice Chairman and the Parent's President and chief Executive Officer.
4. BASE SALARY.
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The Executive shall be paid a Base Salary by the Company at an annual
rate of US$460,000, payable in accordance with the Company's regular pay
practices. Such Base Salary
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shall be subject to annual review and may be increased at the discretion of the
Executive Committee of the Parent Board (the "EXECUTIVE COMMITTEE").
5. BONUSES.
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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 pursuant to the Annual Short Term Bonus Plan approved by the
Executive Committee, with a minimum guaranteed bonus of US$75,000. Any annual
bonus shall be paid in cash in a lump sum promptly following determination
thereof. The Executive shall also be eligible to participate in the Long Term
Incentive Plan to be adopted by the Company.
6. SHARE PURCHASE OPTION.
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Concurrently with the execution of the May 21 Agreement, the Company
and the Executive entered into a Share Purchase Option, granting to the
Executive the right to purchase Outstanding Stock (as defined in Exhibit A
thereto) as described therein. The Parties agreed that the Option shall be
amended to read as set forth in the form attached hereto as Exhibit A thereto
(the "OPTION"). The Option shall be 100% exercisable upon a "CHANGE IN CONTROL"
(as defined in Exhibit A hereto).
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7. EMPLOYMENT BENEFIT PROGRAMS.
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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, including
medical, hospitalization, life, travel and accident insurance, disability
protection and retirement benefits.
8. BUSINESS EXPENSE REIMBURSEMENT AND
FRINGE BENEFITS.
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(A) EXPENSE REIMBURSEMENT. During the term of the Executive's
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employment under this Agreement, the Executive shall be entitled to receive
reimbursement by the Company and Parent for all reasonable out-of-pocket travel
expenses, entertainment expenses and other expenses incurred by him in
performing his duties 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
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under this Agreement, the Executive shall be entitled to participate in any of
the Company's and Parent's
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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 and 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$10,000 per month (to be
prorated for partial months) while his services are performed in Bermuda,
(ii) use of an automobile in Bermuda,
(iii) reimbursement of the cost (including initiation fees and
annual dues) of membership in three clubs in Bermuda,
(iv) reimbursement by the Company for the reasonable cost of
financial and tax planning, such reimbursement not to exceed US$10,000 per
year; and
(v) air fare for up to four round-trip first-class non-business
trips per year by the Executive or members of his family between London and
Bermuda (the benefit under this Section 8(b)(iv) being in addition to any
reimbursement of air fare described in Section 8(a)), above.
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9. TERMINATION OF EMPLOYMENT.
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(A) TERMINATION DUE TO DEATH. In the event the Executive dies during
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the term of employment, the Executive's spouse, if she survives him, 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 the event that the Executive's spouse
does not survive him, the estate or other legal representative of the Executive
shall be entitled to receive the Base Salary as provided in Section 4, above, at
the rate in effect at the time of his death, 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 so determines,
(iii) the rights under the Option and any other options held by
the Executive to purchase equity securities of the Company or Parent as
provided in Section 6, above, or otherwise, determined in accordance with
the terms thereof, and
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(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 provisions of such
programs.
(B) TERMINATION DUE TO DISABILITY. In the event the Executive's
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employment with the Company or 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 any other options held by
the Executive to purchase equity securities of the Company or Parent as
provided in Section 6, above, or otherwise, determined in accordance with
the terms thereof, and
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(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 program as described in Section 8, above, determined in accordance
with the applicable terms and provisions of such program.
(C) TERMINATION FOR CAUSE.
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(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:
(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 em-
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ployment for Cause, through the date on which termination for Cause occurs,
(B) the rights, if any, under the Option or any other option to
purchase equity securities of the Company and Parent 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 benefits 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 (x) prior to a Change in Control or (y)
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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 as provided in Section 6, above, in
accordance with the terms thereof,
(D) 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 salary continuation; provided, however, that
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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 or Parent is unable to continue such coverage, the
Company or Parent shall provide the Executive with economically equivalent
benefits determined on an after-tax basis, and
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(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
benefits 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 36
months following the date of such termination,
(B) an amount equal to three 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 continuation,
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(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 or
Parent in such year, and the denominator of which is 12,
(D) the rights under the Option, and any other options held by the
Executive to purchase equity securities of the Company or Parent as
provided in Section 6, above, or otherwise, determined in accordance with
the terms thereof,
(E) continued coverage under the employee benefit programs on 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; provided, however,
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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 is unable to continue
such coverage, the Company and Parent shall provide the Executive with
economically equivalent benefits determined on an after-tax basis,
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(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
benefits programs as described in Section 8, above, determined in
accordance with the 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 elected (or re-elected, as appropriate) to
the Board or the Parent Board, or is otherwise removed from the Board or the
Parent Board, or fails to be appointed (or re-appointed, as appropriate) to the
Executive Committee of the Board or the Parent Board involuntarily, 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)(ii), above, or, if following a
Change in Control, shall be deemed a termination without Cause under Section
9(d)(iii), above, provided the Executive, in either case, shall have given the
Company and Parent written notice of his decision and shall not within 10
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business days thereafter have been reinstated to the relevant positions.
(E) VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may
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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 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.
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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
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any remuneration attributable to any subsequent employment that he may obtain.
11. NONCOMPETITION AND NONSOLICIATION.
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(A) NONCOMPETITION. During the term of his employment and for a
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period of 24 months thereafter, the Executive shall not, directly or indirectly,
whether as an employee, consultant, partner, principal, agent, distributor,
representative or stockholder (except as a less than one percent stockholder of
a publicly traded company or a less than five percent stockholder of a privately
held company), engage in any activities in Bermuda if such activities are
competitive with the businesses that (i) are then being conducted by the Company
or Parent and (ii) during the period of the Executive's employment were either
being conducted by the Company or Parent or actively being developed 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
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under this Agreement, and for a period of 24 months following termination of
employment, the Executive shall not (i) encourage any other employee of the
Company or Parent to leave the employ of the Company or Parent except as may be
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in the interests of the Company or Parent during the course of carrying out his
duties under Section 3 above or (ii) seek to obtain or solicit business from any
person, firm or company which is (so long as the Executive is employed by the
Company or Parent) or at the time of the termination of the Executive's
employment was a customer of or in the habit of dealing with the Company or
Parent.
12. CONFIDENTIAL INFORMATION.
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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 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, any confidential
proprietary information about the Company or Parent or their business, 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.
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13. WITHHOLDING.
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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 either 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.
14. PARENT SERVICES.
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(A) LIABILITY. The Parent hereby agrees to be jointly and severally
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liable together with the Company for the payment to the Executive of his Base
Salary, bonus, business expense reimbursement and termination of employment
provisions of this Agreement.
(B) RESPONSIBILITY. All of the other terms and provisions of this
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Agreement relating to the Executive's employment by the Company shall likewise
apply mutatis mutandis to the Executive's employment by the Parent including,
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without limitation, Sections 1, 2, 7, 8, 9, 10, 11, 12, 13 and 18, it
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being understood that if the Executive terminates his employment, he shall be
required to do so with respect to both the Company and the Parent and that a
termination of the employment of the Executive by both the Company or the Parent
shall be deemed a termination by both.
15. ENTIRE AGREEMENT.
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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, Parent and the
Executive with respect thereto.
16. ASSIGNABILITY; BINDING NATURE.
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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 right 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 con-
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tinuing 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.
17. INDEMNIFICATION.
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The Executive shall be provided indemnification by each of Parent and
the Company 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.
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 both Parties shall be borne by
the Company and Parent.
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19. AMENDMENT OR WAIVER.
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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.
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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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If to the Parent: Mid Ocean Limited
Richmond House
12 Par-la-Ville Road
▇▇▇▇▇▇▇▇ ▇▇ EX, Bermuda
If to the Executive: ▇▇▇▇▇▇▇ ▇. Butt
"Chan Mar"
▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇. SEVERABILITY.
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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. REFERENCE.
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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.
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24. GOVERNING LAW.
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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.
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The heading 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.
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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 REINSURANCE COMPANY LTD.
By: _____________________________
MID OCEAN LIMITED
By: _____________________________
_____________________________
▇▇▇▇▇▇▇ ▇. Butt
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EXHIBIT A
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CHANGE IN CONTROL
A "Change in Control" shall be deemed to have occurred if:
(i) 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 Agreement dated June 2, 1995 between
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 ex-
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changeable 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
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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;
(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 in 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 in 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 in Control.
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