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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement is dated as of June 1, 2000 and is entered into
between RenaissanceRe Holdings Ltd., a Bermuda company (the "Company"), and John
Lummis ("Employee").
WHEREAS, Employee is currently employed by the Company; and
WHEREAS, Employee and the Company desire to embody in this Agreement the
terms and conditions under which Employee shall continue to be employed by the
Company.
NOW, THEREFORE, the parties hereby agree:
ARTICLE I.
EMPLOYMENT, DUTIES AND RESPONSIBILITIES
1.01 Employment. During the Term (as defined below), Employee shall serve
as a key employee of the Company. Employee agrees to devote his full time and
efforts to promote the interests of the Company.
1.02 Duties and Responsibilities. Employee shall have such duties and
responsibilities as specified by the person to which the Employee directly
reports and who supervises the Employee's work an a regular basis (the "Direct
Supervisor"). These duties and responsibilities may be modified from time to
time and as are consistent with the Employee's position.
1.03 Base of Operation. Employee's principal base of operation for the
performance of his duties and responsibilities under this Agreement shall be the
offices of the Company in Bermuda; provided, however, that Employee shall
perform such duties and responsibilities outside of Bermuda as shall from time
to time be reasonably necessary to fulfill his obligations hereunder. Employee's
performance of any duties and responsibilities outside of Bermuda shall be
conducted in a manner consistent with any guidelines provided to Employee by the
Board of Directors of the Company (the "Company's Board").
ARTICLE II.
TERM
2.01 Term. Subject to Article V, the employment of the Employee under this
Agreement shall be for a term (the "Term") commencing as of the date first
written above and continuing until the first anniversary of the commencement of
employment; provided, however, that the Term shall be extended for successive
one-year
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periods as of each anniversary date of the commencement of employment(each, a
"Renewal Date") unless, with respect to any such Renewal Date, either party
hereto gives the other party at least 30 days prior written notice of its
election not to so extend the Term.
ARTICLE III.
COMPENSATION AND EXPENSES
3.01 Salary, Incentive Awards and Benefits. As compensation and
consideration for the performance by Employee of his obligations under this
Agreement, Employee shall be entitled, during the Term, to the following
(subject, in each case, to the provisions of ARTICLE V hereof):
(a) Salary; Bonus. The Company shall pay Employee a base salary at a
rate to be determined by the Company's Board, upon recommendation of the
Direct Supervisor, or if such Direct Supervisor is not an officer of the
Company, an officer of the Company. Bonuses shall be payable at the
discretion of the Company. Salary and bonuses shall be payable in
accordance with the normal payment procedures of the Company and subject to
such withholding and other normal employee deductions as may be required by
law.
(b) Awards. Employee may participate in the Second Amended and
Restated 1993 Stock Incentive Plan (the "Plan") of RenaissanceRe Holdings
Ltd. ("Holdings"), the Company's ultimate parent company. Employee may
receive grants from time to time as determined by the Compensation
Committee of the Holdings Board of Directors. Employee shall enter into
separate award agreements with respect to such awards granted to him
("Awards") under the Plan, and his rights with respect to such Awards shall
be governed by the Plan and such award agreements.
(c) Benefits. Employee shall be eligible to participate in such life
insurance, health, disability and major medical insurance benefits, and in
such other employee benefit plans and programs for the benefit of the
employees and officers of the Company, as may be maintained from time to
time during the Term, in each case to the extent and in the manner
available to other employees of the Company, subject to the terms and
provisions of such plan or program.
(d) Vacation. Employee shall be entitled to reasonable paid vacation
periods, in accordance with Company policy, to be taken at his discretion,
in a manner consistent with his obligations to the Company under this
Agreement, and subject, with respect to timing, to the reasonable approval
of the Employee's supervisor at the Company.
(e) Indemnification/Liability Insurance. The Company shall indemnify
Employee as required by the Bye-laws, and may maintain customary insurance
policies providing for indemnification of Employee.
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3.02 Expenses; Perquisites. During the Term, the Company shall provide
Employee with the following expense reimbursements and perquisites:
(a) Business Expenses. The Company will reimburse Employee for
reasonable business-related expenses incurred by him in connection with the
performance of his duties hereunder, subject, however, to the Company's
policies relating to business-related expenses as in effect from time to
time.
(b) Other benefits. The Company may also provide for other benefits
for Employee as it determines from time to time.
ARTICLE IV.
EXCLUSIVITY, ETC._
4.01 Exclusivity. Employee agrees to perform his duties, responsibilities
and obligations hereunder efficiently and to the best of his ability. Employee
agrees that he will devote his entire working time, care and attention and best
efforts to such duties, responsibilities and obligations throughout the Term.
4.02 Other Business Ventures. Employee agrees that during the Term he will
not own, directly or indirectly, any controlling or substantial stock or other
beneficial interest in any business enterprise which is engaged in business
activities that are competitive with the business activities of the Company or
any of its divisions,- subsidiaries or affiliates. The preceding sentence
notwithstanding, Employee may own, directly or indirectly, up to 1% of the
outstanding capital stock of any business having a class of capital stock which
is traded on any major stock exchange or in a national over-the-counter market.
4.03 Confidential Information. Employee agrees that he will not, at any
time during or after the Term, make use of or divulge to any other person, firm
or corporation any trade or business secret, process, method or means, or any
other confidential information concerning the business or policies of the
Company or any of its divisions, subsidiaries or affiliates, which he may have
learned in connection with his employment hereunder. For purposes of this
Agreement, a "trade or business secret, process, method or means, or any other
confidential information" shall include any information designated as
confidential by the Company's Board and as to which Employee receives notice,
provided that Employee shall be obligated to confer periodically with and assist
the Company's Board in determining which information should, in the best
interests of the Company, be so designated. Employee's obligation under this
Section 4.03 shall not apply to any information which (i) is known publicly;
(ii) is in the public domain or hereafter enters the public domain without the
fault of Employee; (iii) is known to Employee prior to his receipt of such
information from the Company, as evidenced by written records of Employee or
(iv) is hereafter disclosed to Employee by a third party not under an obligation
of confidence to the Company. Employee agrees not to remove from the premises of
the Company, except as an employee of the Company in pursuit of the business of
the Company or except as
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specifically permitted in writing by the Company's Board, any document or other
object containing or reflecting any such confidential information. Employee
recognizes that all such documents and objects, whether developed by him or by
someone else, will be the sole exclusive property of the Company. Upon
termination of his employment hereunder, Employee shall forthwith deliver to the
Company all such confidential information, including without limitation all
lists of customers, correspondence, accounts, records and any other documents or
property made or held by him or under his control in relation to the business or
affairs of the Company or its subsidiaries or affiliates, and no copy of any
such confidential information shall be retained by him.
4.04 Non-Competition Obligations. During the Term and, other than in the
case of the death or disability of the Employee, upon any termination of the
employment of the Employee (including a termination by reason of either party's
election not to extend the Term as provided in Section 2.01), the Employee shall
not, during the Non-Competition Period (as defined below), directly or
indirectly, whether as an employee consultant, independent contractor, partner,
joint venture or otherwise, (A) engage in any business a - activities relating
to catastrophe modeling, or underwriting catastrophe risks, on behalf of any
person that competes, to a material extent, with the Company or its affiliates,
or engage in other business activities reasonably determined by the Company's
board to be competitive, to a material extent, with any substantial type of kind
of business activities conducted by the Company or any of its affiliates at the
time of termination; (B) on behalf of any person or entity engaged in business
activities competitive with the business activities of the Company or any of its
divisions, subsidiaries or affiliates, solicit or induce, or in any manner
attempt to solicit or induce, any person employed by, or as agent of, the
Company or any of its divisions, subsidiaries or affiliates to terminate such
person's contract of employment or agency, as the case may be, with the Company
or with any such division, subsidiary or affiliate or (C) divert, or attempt to
divert, any person, concern, or entity from doing business with the Company or
any of its divisions, subsidiaries or affiliates, nor will he attempt to induce
any such person, concern or entity to cease being a customer or supplier of the
Company or any of its divisions, subsidiaries or affiliates. The preceding
sentence notwithstanding, in the case of (i) any termination of employment by
the Company or the Employee, and(ii) an election by the Company or the Employee
not to extend the term as provided in Section 2.01, the Company may elect within
30 days after such termination, to waive the Employee's non-competition
obligations in which case it shall not be required to make payments to the
Employee during the Non-Competition Period, as provided in section 5.05(a).
Non-Competition Period means the period of one year following the date of
termination of employment, or such shorter period as the Company may elect
within 30 days after such termination.
4.05 Remedies. Employee acknowledges that the Company's remedy at law for a
breach by him of the provisions of this Article IV will be inadequate.
Accordingly, in the event of a breach or threatened breach by Employee of any
provision of this Article IV, the Company shall be entitled to injunctive relief
in addition to any other remedy it may have. If any of the provisions of, or
covenants contained in, this Article IV are hereafter construed to be invalid or
unenforceable in any jurisdiction, the same shall not affect the remainder of
the provisions or the enforceability thereof in any
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other jurisdiction, which shall be given full effect, without regard to the
invalidity or unenforceability in such other jurisdiction. If any of the
provisions of, or covenants contained in, this Article IV are held to be
unenforceable in any jurisdiction because of the duration or geographical scope
thereof, the parties agree that the court making such determination shall have
the power to reduce the duration or geographical scope of such provision or
covenant and, in its reduced form, such provision or covenant shall be
enforceable; provided, however, that the determination of such court shall not
affect the enforceability of this Article IV in any other jurisdiction.
ARTICLE V.
TERMINATION
5.01 Termination for Cause. The Company shall have the right to terminate
Employee's employment at any time for "Cause". For purposes of this Agreement,
"Cause" shall mean (a) Employee's failure to perform his duties under this
Agreement, (b) the engaging by Employee in misconduct which is injurious to the
Company or any of its divisions, subsidiaries or affiliates, monetarily or
otherwise, (c) the commission by Employee of any act of fraud or embezzlement
(d) the conviction of Employee of a felony, or (e) Employee's material breach of
the provisions of any of Sections 4.01, 4.02, 4.03, or 4.04 of this Agreement,
provided Employee has received prior written notice of such breach.
5.02 Death. In the event Employee dies during the Term, the Employee's
employment shall automatically terminate, such termination to be effective on
the date of Employee's death.
5.03 Disability. In the event that Employee suffers a disability which
prevents him from substantially performing his duties under this Agreement for a
period of at least 90 consecutive days, or 18d non-consecutive days within any
365-day period, and Employee becomes eligible for the Company's long-term
disability plan, the Company shall have the right to terminate the Employee's
employment, such termination to be effective upon the giving of notice to
Employee in accordance with Section 6.03 of this Agreement.
5.04 Termination Without Cause. The Company may at any time terminate
Employee's employment for reasons other than Cause.
5.05 Effect of Termination.
(a) Obligations of Company. In the event of any termination of the
Employee's employment hereunder, the Company shall pay Employee any earned
but unpaid base salary up to the date of termination. In addition, upon a
termination of Employee's employment for any reason other than the
Employee's death or disability (including a termination by reason of either
party's election not to extend the Term as provided in Section 2.01), the
Company shall continue to pay Employee during the NonCompetition Period his
then current base salary (except that, in the event of a
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Termination without Cause, or in the event that the Company elects not to
extend the Term as provided in Section 2.01, the continued monthly payments
shall be based on base salary plus a pro rata amount (proportionate to the
duration of the Non-Competition Period) of the highest regular bonus during
the prior 3 years). Such amounts shall be payable in equal monthly
installments commencing on the date which is one month after the date of
such termination and continuing for the term of the Non-Competition Period.
The preceding sentence notwithstanding, in the event of a termination of
employment described in the penultimate sentence of Section 4.04 of this
Agreement, if the Company elects to waive the Employee's noncompetition
obligation within 30 days after the date of such termination, the Company
shall not be required to make the payments described in the preceding
sentence.
(b) Awards. Employee's rights with respect to Awards, upon any
termination of his employment with the Company, shall be governed
exclusively by the terms and conditions of the Plan and any award
agreements executed by Employee in connection with the Plan.
(c) Obligations of Employee. Employee may terminate his employment at
any time by 10 days' written notice to the Company. Employee shall have no
obligations to the Company under this Agreement after the termination of
his employment, except and to the extent Sections 4.03, 4.04 or 4.05 shall
apply.
5.06 Termination Following a Change in Control. In the event that a Change
in Control occurs (as hereinafter defined) and, on or within one year following
the date of such Change in Control, the Executive's employment is terminated by
the Company without Cause, or the Company elects not to extend the Term as
provided in Section 2.01, or the Executive terminates his employment voluntarily
for "Good Reason" (as hereinafter defined), then in lieu of the payments
described in the second sentence of Section 5.05(a), the Company shall pay the
Executive, within fifteen days following the date of such termination, a lump
sum cash amount equal to two times the sum of:
(i) Executive's annual base salary at the highest rate in effect
during the Term; and
(ii) the highest regular annual bonus paid or payable to the Executive
over the preceding three fiscal years (excluding any extraordinary or
non-recurring bonus).
For purposes of this Agreement, "Good Reason" means
(i) any action taken or failed to be taken by the Company or any of
its officers which, without Executive's prior written consent, changes
Executive's position (including titles), authority, duties or
responsibilities from those in effect prior to the Change in Control, or
reduces Executive's ability to carry out such duties and responsibilities;
(ii) any failure by the Company to comply with any of the provisions
of Section 3 of this Agreement, other than an insubstantial or inadvertent
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failure which is remedied by the Company promptly after receipt of notice
thereof from Executive;
(iii) the Company's requiring Executive to be employed at any location
more than 35 miles further from his current principal residence than the
location at which Executive was employed immediately preceding the Change
in Control; or
(iv) any failure by the Company to obtain the assumption of and
agreement to perform this Agreement by a successor as contemplated by
Section 6.02(b) of this Agreement.
For purposes of this Agreement, "Change of Control' means the acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") (a
'Person') of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of securities representing more than 50% of the value
and voting power of all of Holdings' outstanding equity securities (the
"Outstanding Equity Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by
the Holdings (ii) any acquisition by one or more of the "Investors" (as such
term is defined in the Plan) or any entity directly or indirectly controlling,
controlled by, or under common control with, one or more or the Investors (an
"Investor Affiliate"), or (iii) any acquisition by a corporation pursuant to a
merger, consolidation or other similar transaction (a "Corporate Event") if, as
a result of such Corporate Event, (a) substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Equity
Securities immediately prior to such Corporate Event beneficially own, directly
or indirectly, securities representing more than 50% of the value and voting
power of the then outstanding equity securities of the corporation resulting
from such Corporate Event (including a corporation which, as result of such
transaction, owns Holdings or all or substantially all of Holding's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Corporate Even, of the
Outstanding Equity Securities, and (b) no Person other than (1) one of more of
the Investors or any Investor Affiliate, or (2) any corporation resulting from
such Corporate Event, beneficially owns, directly or indirectly, securities
representing more than 50% of the value and voting power of the then outstanding
equity securities of the corporation resulting from such Corporate Event except
as specifically provided in this Section 5.06, the effect of a termination of
Executive's employment following a Change in Control shall be governed by the
provisions of Section of 5.05.
ARTICLE VI.
MISCELLANEOUS
6.01 Life Insurance. Employee agrees that the Company or any of its
divisions, subsidiaries or affiliates may apply for and secure and own insurance
on Employee's life (in amounts determined by the Company). Employee agrees to
cooperate
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fully in the application for and securing of such insurance, including the
submission by Employee to such physical and other examinations, and the
answering of such questions and furnishing of such information by Employee, as
may be required by the carrier(s) of such insurance. Notwithstanding anything to
the contrary contained herein, neither the Company nor any of its divisions,
subsidiaries or affiliates shall be required to obtain any insurance for or on
behalf of Employee.
6.02 Benefit of Agreement; Assignment; Beneficiary.
(a) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns, including, without limitation,
any corporation or person which may acquire all or substantially all of the
Company's assets or business, or with or into which the Company may be
consolidated or merged. This Agreement shall also inure to the benefit of,
and be enforceable by, Employee and his personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
(b) The Company shall require any successor (whether direct or
indirect, by operation of law, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such succession had taken place.
6.03 Notices. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered or if sent by
telegram or telex or by registered or certified mail, postage prepaid, with
return receipt requested, addressed: (a) in the case of the Company to
Renaissance Services Ltd., Renaissance House, East Broadway, Hamilton, Bermuda,
Attention: Secretary, or to such other address and/or to the attention of such
other person as the Company shall designate by written notice to Employee; and
(b) in the case of Employee, to Employee at his then current home address as
shown on the Company's books, or to such other address as Employee shall
designate by written notice to the Company. Any notice given hereunder shall be
deemed to have been given at the time of receipt thereof by the person to whom
such notice is given.
6.04 Entire Agreement; Amendment. This Agreement contains the entire
agreement of the parties hereto with respect to the terms and conditions of
Employee's employment and supersedes any and all prior agreements and
understandings, whether written or oral, between the parties hereto with respect
to compensation due for services rendered hereunder. T-his Agreement may not be
changed or modified except by an instrument in writing signed by both of the
parties hereto.
6.05 Waiver. The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a continuing waiver or as a
consent to or waiver of any subsequent breach hereof.
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6.06 Headings. The Article and Section headings herein are for convenience
of reference only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
6.07 Enforcement. If any action at law or in equity is brought by either
party hereto to enforce or interpret any of the terms of this Agreement, the
prevailing party shall be entitled to reimbursement by the other party of the
reasonable costs and expenses incurred in connection with such action (including
reasonable attorneys' fees), in addition to any other relief to which such party
may be entitled. Employee shall have no right to enforce any of his rights
hereunder by seeking or obtaining injunctive or other equitable relief and
acknowledges that damages are an adequate remedy for any breach by the Company
of this Agreement.
6.08 Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the internal laws of Bermuda without reference
to the principles of conflict of laws. The parties submit to the non-exclusive
jurisdiction of the courts of Bermuda.
6.09 Agreement to Take Actions. Each party to this Agreement shall execute
and deliver such documents, certificates, agreements and other instruments, and
shall take such other actions, as may be reasonably necessary or desirable in
order to perform his or its obligations under this Agreement or to effectuate
the purposes hereof.
6.10 No Mitigation; No Offset. Employee shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking (and, without limiting the generality of this sentence, no payment
otherwise required under this Agreement shall be reduced on account of) other
employment or otherwise, and payments under this Agreement shall not be subject
to offset in respect of any claims which the Company may have against Employee.
6.11 Attorneys' Fees. Each party to this Agreement will bear its own
expenses in connection with any dispute or legal proceeding between the parties
arising out of the subject matter of this Agreement, including any proceeding to
enforce any right or provision under this Agreement.
6.12 Termination; Survivorship. This Agreement shall terminate upon
termination of the Employee's employment, except that the respective rights and
obligations of the parties under this Agreement as set forth herein shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
6.13 Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision or provisions of this Agreement, which shall remain in full
force and effect.
6.14 Other Agreements. Employee represents and warrants to the Company that
to the best of his knowledge, neither the execution and delivery of this
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Agreement nor the performance of his duties hereunder violates or will violate
the provisions of any other agreement to which he is a party or by which he is
bound.
6.15 Subsidiaries, etc. (a) The obligations of the Company under this
Agreement may be satisfied by any subsidiary or affiliate of the Company for
which Employee serves as an employee under this Agreement, to the extent such
obligations relate to Employee's employment by such subsidiary or affiliate.
(b) The rights of the Company under this Agreement may be enforced by
any Subsidiary or affiliate of the Company for which Employee serves as an
employee under this Agreement, to the extent such rights relate to
Employee's employment by such subsidiary or affiliate.
6.16 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the date first above written.
RENAISSANCERE HOLDINGS LTD.
By: /s/ James Stanard
----------------------------------------
Name: James Stanard
Title: President and CEO
EMPLOYEE
By: /s/ John Lummis
----------------------------------------
Name: John Lummis
Title: Senior Vice President and CFO
EMPLOYMENT AGREEMENT ADDENDUM
This addendum supplements the terms of the Employment Agreement (the
"Agreement") dated June 1, 2000 between Renaissance Holdings Ltd., a Bermuda
company (the "Company"), and John Lummis ("Employee"). (All defined terms set
forth in the Agreement shall have the same meaning in this Addendum.)
WHEREAS, the Company and the Employee desire to provide for the minimum payment
to be received by the Employee in the event of a termination without Cause.
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NOW THEREFORE, the parties agree:
Notwithstanding anything in the Agreement to the contrary, in the event that the
Employee is terminated by the Company without Cause, then
1. The Company shall make monthly payments to the Employee in an aggregate
amount equal to $457,100 (the "Required Amount").
2. The Company shall be deemed to have elected a Non-Competition Period equal
to one year multiplied by a fraction, the numerator of which is the
Required Amount and the Denominator of which is the full amount that would
otherwise be due pursuant to section 5.05 (a) of the Agreement in the event
of a Termination without Cause and an election by the Company to have a
Non-Competition Period of one year. In no event shall more than a one year
Non-Competition Period be required.
3. The only amount due to the Employee for the Non-Competition Obligations set
forth in section 4.04 of the Agreement shall be the Required Amount, except
that if the Company elects a longer period than that contemplated under
paragraph 2 above then the full amount specified in section 5.05 (a) of the
Agreement shall be due.
RENAISSANCERE HOLDINGS LTD.
By: /s/ James N. Stanard
---------------------------------
Name: James N. Stanard
Title: President and CEO
EMPLOYEE
By: /s/ John M. Lummis
---------------------------------
Name: John M. Lummis
Title: Senior Vice President and CFO
