Exhibit 10.11
[LOGO]
UNITED
NATIONAL
GROUP
November 7, 2003
CONFIDENTIAL
VIA FACSIMILE
Mr. David R. Bradley
50 Mohawk Drive
West Hartford, CT 06117
RE: EXECUTIVE EMPLOYMENT AGREEMENT
Dear David:
We are very pleased to offer you ("Executive") the opportunity to join United
National Group, Ltd. as Chief Executive Officer, as further outlined in the term
sheet below:
POSITIONS & TITLES: CHIEF EXECUTIVE OFFICER of United National
Group, Ltd. ("UNGL") beginning November 11,
2003 or such later date as is acceptable to
UNGL (the "Employment Date"). Executive will
also be elected to the Board of Directors of
UNGL (the "Board") beginning on the
Employment Date. Executive shall also serve
as Chief Executive Officer of Wind River
Insurance Company (Bermuda), Ltd. and serve
on the Board of any designated subsidiaries
or affiliates of UNGL.
RESPONSIBILITIES: Executive shall be responsible for the
general oversight and management of UNGL,
including overall business strategy, all
operating units (including the United States
operations), operating plans and financial
performance. Specifically, Executive shall
be responsible for the development of a
proactive specialty insurance and
reinsurance business. Executive will devote
his full time to UNGL and not engage in any
outside business activities without the
consent of the Board.
REPORTING: Executive will report to the Chairman and
the Executive Committee of the Board and
will have all other members of executive
management of UNGL report to him.
LOCATION: Executive's principal offices will be based
in Bermuda. The Company will assist
Executive in relocating his primary
residence to Bermuda and will provide
Executive a monthly housing allowance
mutually acceptable to the Executive and the
Company to include rental cost of the
Bermuda residence plus an additional $2,500
per month, the total amount of which is
expected to be no more than $12,500 per
month. Executive also will maintain a
residence in the reasonable proximity to the
headquarters of the US operations, with
Executive responsible for the expenses
associated with maintaining such residence.
The Company will reimburse Executive for his
reasonable moving costs incurred in
relocating to Bermuda provided that such
costs are
MR. DAVID R. BRADLEY
NOVEMBER 7, 2003
PAGE 2
substantiated and pre-approved (to be repaid
in full by Executive if he terminates his
employment for any reason within one year of
the Employment Date).
TERM: Through December 31, 2008.
ANNUAL CASH COMPENSATION: $700,000: Base Salary of $450,000 ("Base
Salary") beginning on the Employment Date,
plus an annual bonus of between $100,000 and
$375,000, based on achievement of 90% to
120% of targeted performance objectives and
substantial progress on the corporate goals,
each set by the Executive Committee
($250,000 at achievement of 100%). Such
performance objectives and goals will be
determined by the Board or a designated
committee of the Board in consultation with
Executive for each fiscal year and subject
to the terms of the applicable annual bonus
plan. Executive must be actively employed by
UNGL and in good standing on the date UNGL's
auditors approve the prior fiscal year's
financial statements to be eligible for a
bonus in respect of such prior fiscal year.
For 2004 and each subsequent fiscal year,
the Board or a designated committee of the
Board will work with Executive to approve an
annual bonus program for the senior
management and other employees of UNGL.
EQUITY PACKAGE: 200,000 UNGL SHARES AND STOCK OPTIONS: Until
the earlier to occur of the consummation of
the IPO and February 29, 2004, the Executive
will have the opportunity to purchase up to
33,333 shares of stock at the IPO price, to
be fully vested upon purchase and receive,
for each share purchased, five (5) times as
many stock options with an exercise price
equal to the IPO price of the Company's
stock, and having a term of 10 years, 67.5%
to vest based on Company performance,
ratably over 4 years from the date of grant,
and 32.5% to vest 20% per year, starting on
December 31, 2004. In the event the Company
does not complete an IPO at the time of
Executive's stock purchase, the price per
share for both the stock purchase and the
option strike price will be determined, in
good faith, by the Board. Executive must be
actively employed and in good standing as of
each option vesting date. All options and
stock acquired by Executive will be subject
to the Management Shareholders Agreement
(the "MSA"), which imposes transfer
restrictions on shares and which provides
that UNGL may elect to repurchase such
shares upon the Executive's termination of
employment (if for cause or resignation, at
the lesser of FMV or cost, if without cause,
death or disability at fair market value).
All of Executive's stock and options (pro
rata with Fox Paine) are also subject to a
"drag along" triggered by a sale by
affiliates of Fox Paine & Company, LLC of at
least 50% of its holdings in UNGL. Gains
realized on the sale of shares or exercise
of options may also be subject to recapture,
and equity held by Executive may be subject
to repurchase at the lower of cost or fair
market value, in the event that Executive
breaches his non-competition and
non-solicitation obligations.
MR. DAVID R. BRADLEY
NOVEMBER 7, 2003
PAGE 3
ADDITIONAL BENEFITS: Executive will be entitled to receive 4
weeks paid vacation annually and to
participate, beginning on the Employment
Date, in UNGL's health and other benefit
plans and programs for senior executives and
be covered under UNGL's D&O insurance and
corporate indemnification policies.
NON-COMPETITION: For 18 months subsequent to Executive's
termination for "cause" (as provided for in
UNGL's senior executive employment
agreements), or upon Executive's voluntary
resignation, Executive shall be subject to
(1) a competition prohibition covering
specialty property and casualty
insurance/reinsurance business, insurance
agency and brokerage business and MGAs and
producers for UNGL and its affiliates,
provided that the foregoing restrictions
shall not apply if (i) your subsequent
employer does not engage in any new business
arrangements (including capturing
incremental market share) with any MGA doing
business with UNGL or its affiliates (or any
MGA under contemplation to do business with
UNGL or its affiliates at the time of the
Executive's departure), (ii) the otherwise
competitive operations of your subsequent
employer (including any future operations
under your management) are undertaken
without any direct or indirect involvement
by you and (iii) such subsequent employer is
not an affiliate of one of the following:
Markel Corp., HCC Insurance Holdings, Penn
America Group Inc., Admiral, Nautilus and
Berkley Underwriting Partners, Philadelphia
Consolidated Holding Corp., Great American,
Scottsdale or RLI Corp. (2) a prohibition
precluding your direct or indirect
involvement in the solicitation of employees
and customers, and (3) confidentiality
restrictions. In the event that Executive is
terminated without cause, the length of each
of the above-referenced periods shall be 6
months.
SEVERANCE: Upon termination by Company other than for
cause, Executive shall be entitled to
receive a payment equal to 6 months of Base
Salary, payable in monthly installments.
Severance payments shall be conditioned upon
the execution and delivery by Executive of a
general release in favor of UNGL, and
compliance with all post-termination
obligations.
NO CONFLICTS: Executive represents and warrants that he is
not a party to any agreement or arrangement
that would limit in any manner his ability
to perform his duties for UNGL, except as
previously disclosed.
MISCELLANEOUS: This document is conditioned on approval by
the Board. Subject to such Board approval
this document represents a binding agreement
of the parties setting forth a summary of
the terms and conditions, and the parties
agree to execute and deliver definitive
documentation implementing the terms and
conditions of this document, which will
supercede this letter. Executive agrees to
cooperate in connection with the execution
and delivery of such documentation and all
other related documentation. This Agreement
is to be governed by and construed in
accordance with the laws of Bermuda, without
reference to principles of conflict of laws.
All disputes between UNGL and Executive
shall be resolved by binding confidential
arbitration held in Bermuda, Philadelphia,
Pennsylvania or New York City (selected by
MR. DAVID R. BRADLEY
NOVEMBER 7, 2003
PAGE 4
the Board) conducted by the Judicial
Arbitration and Mediation Services, Inc.
("JAMS"). The parties agree that the
arbitrator shall have no authority to award
any punitive or exemplary damages and waive,
to the full extent permitted by law, any
right to recover such damages in
arbitration. The Company shall bear the
costs of the arbitrators, however, each
party shall bear their respective costs,
including attorney's fees (and there shall
not be any award of attorney's fees).
Judgment on the award rendered in such
arbitration may be entered in any court
having jurisdiction. Nothing in this
Agreement shall restrict the right of UNGL
or its affiliates to seek injunctive relief
arising out of any violation by Executive of
the provisions of this Agreement relating to
non-competition, non-solicitation,
confidentiality and related matters. This
Agreement supersedes all prior promises,
representations, offers, contracts, and
agreements among UNGL and Executive. This
Agreement may not be amended except in a
writing executed by Executive and the
Chairman of the Board of UNGL (or other
Board authorized designee), which writing
shall be subject to Board approval. For
purposes of this "Miscellaneous" paragraph
and the general release referred to in the
"Severance" paragraph above, the term "UNGL"
includes United National Group, Ltd., its
subsidiaries, affiliates and related
entities (including without limitation Fox
Paine Capital Fund II GP, LLC, Fox Paine
Capital Fund II, L.P., Fox Paine Capital
International Fund II, Ltd. and all persons
and entities that are partners,
shareholders, members or agents of any such
related entities) (collectively, the
"Related Entities"), and all partners,
members, directors, employees, shareholders,
affiliates and agents of UNGL, FPC or any
other Related Entities. Notwithstanding
anything herein to the contrary, this
Agreement may be assigned by UNGL to any of
its affiliates (including a Bermuda entity),
and such assignee shall be the employer of
the Executive.
Please indicate your agreement to the foregoing by returning to me (by facsimile
or otherwise) a copy of this letter countersigned by you (where indicated
below).
Sincerely yours,
UNITED NATIONAL GROUP, LTD.
By: /s/ Troy W. Thacker
----------------------------
Troy W. Thacker
Director
Agreed and Accepted
/s/ David R. Bradley
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DAVID R. BRADLEY
November 8, 2003