EXHIBIT 10.15
[LETTER HEAD OF STPAUL RE]
August 14, 2002
Mr. Neal Schmidt
450 Park Street
Upper Montclair, New Jersey 07043
Dear Neal:
As you know, earlier this year The St. Paul Companies announced its intention to
transfer substantially all of its reinsurance operations and related assets to
Platinum Underwriters Holdings, Ltd. ("Platinum"), a newly formed Bermuda-based
reinsurer. As a result of poor market conditions, The St. Paul Companies has
postponed the transfer. However, we remain committed to building a valuable
franchise in St. Paul Re.
You are an important part of this franchise and we hope you will continue to
contribute to its value. This letter addresses certain important elements of
your compensation package.
SALARY
Effective July 1, 2002, your base salary will be $29,166.67 per month,
annualized at $350,000 per year.
ANNUAL PERFORMANCE BONUS
For 2002, you will be eligible for an annual performance bonus in the target
amount of 75% of your base salary. St. Paul Re's standard criteria, including
individual, department, and company performance, will be considered in
determining the actual amount of the annual performance bonus. However, you will
receive an annual performance bonus for 2002 of no less than $175,000 (the
"Minimum Bonus") provided that you are employed by St. Paul Re, or its
successor, up to and including the date of payment, which is expected to be
March 31, 2003. If St. Paul Re, or its successor, terminates your employment,
other than for "cause", prior to March 31, 2003, the Minimum Bonus will be paid
to you within 30 days following your separation from employment.
[LETTER HEAD OF STPAUL RE]
RETENTION BONUS
In addition to the annual performance bonus, St. Paul Re, or its successor, will
also pay you, no later than July 1, 2004, a retention bonus equal to $175,000 if
you are "Continuously Employed" with St. Paul Re, or its successor, through July
1, 2004. You will be considered to be "Continuously Employed" if you diligently
perform your job duties up to and including July 1, 2004 or are on an approved
leave of absence in accordance with generally applicable policies of St. Paul Re
or its successor. This retention bonus is in addition to any base salary and
annual performance bonus that you may earn during the year. If St. Paul Re, or
its successors, terminates your employment, other than for "cause", prior to
July 1, 2004, you will be paid the full amount of the retention bonus within 30
days following your separation from employment. If the Company does not
consummate an initial public offering of common stock of Platinum on or prior to
December 31, 2003, and you elect to terminate your employment with the Company
within 30 days thereafter, the Company will pay you a one-time bonus equal to
$250,000 (the "IPO Bonus") in lieu of any retention bonus and annual performance
bonus for 2003.
ELIGIBILITY AND CONDITIONS. The following conditions apply to your eligibility
to receive the enhanced compensation provided for in this letter:
1. You must maintain an acceptable or better level of performance and
comply with all policies and procedures of St. Paul Re, or its
successor, in order to remain eligible for the salary and bonuses
outlined above (collectively, the "Benefits"). In addition, if your
employment is terminated for "cause", you will not be paid the
Benefits.
2. You will not be eligible for a Benefit if you voluntarily terminate
your employment prior to the date the Benefit is paid except you will
receive the IPO Bonus if you terminate your employment within the time
set forth above.
3. All Benefits are subject to applicable withholding.
4. You must not disclose the terms and conditions of this letter and any
Benefits hereunder, directly or indirectly, to any other employee of
St. Paul Re, or its successor, in order to remain eligible for the
Benefits.
OTHER IMPORTANT PROVISIONS
1. Notwithstanding the foregoing, nothing contained in this letter is
intended to create an express or implied contract of employment for any
particular duration, or to change your at-will status with St. Paul Re,
or its successor.
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[LETTER HEAD OF STPAUL RE]
2. This letter supersedes all prior communications or understandings by
St. Paul Re or Platinum related to your base salary and bonuses. Any
modification to this letter must be made in writing by the President
and CEO of St. Paul Re, or its successor, and you.
3. The rights and obligations described in this letter may not be assigned
by either party without the prior written consent of the other party,
except that St. Paul Re may assign its rights and/or delegate its
obligations to any successor and/or assign of St. Paul Re without your
consent. This letter agreement shall be binding on and inure to the
benefit of St. Paul Re's successors and assigns.
Please sign in the space provided below and return one copy of this letter to
Teresa Claro no later than August 16, 2002.
I am confident that the compensation features described above will recognize and
reward your contribution to the Company. I thank you in advance for your hard
work and dedication.
Sincerely yours,
ST. PAUL RE, INC.
By: /s/ Jerome T. Fadden
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Jerome T. Fadden
President and Chief Executive Officer
AGREED:
/s/ Neal Schmidt Aug. 16, 2002
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Neal Schmidt Date
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