Exhibit 10.4
JULIAN MICHAEL CUSACK
AND
ASPEN INSURANCE HOLDINGS LIMITED
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SERVICE AGREEMENT
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CONTENTS
CLAUSE PAGE
1. Interpretation.........................................................1
2. Appointment............................................................2
3. Term...................................................................2
4. Duties.................................................................2
5. Remuneration And Commission............................................4
6. Pension And Insurance Benefits.........................................5
7. Expenses...............................................................5
8. Holidays And Holiday Pay...............................................5
9. Sickness Or Incapacity.................................................5
10. Confidential Information...............................................6
11. Copyright And Designs..................................................6
12. Gratuities And Codes Of Conduct........................................7
13. Restrictive Covenants..................................................7
14. Termination By Reconstruction Or Amalgamation..........................8
15. Termination Of Directorship............................................8
16. Termination Of Employment On The Happening Of Certain Events...........9
17. Obligations Upon Termination Of Employment.............................9
18. Effect Of Termination Of This Agreement...............................10
19. Other Terms And Conditions............................................10
20. Notices...............................................................10
21. Previous And Other Agreements.........................................10
22. Applicable Law........................................................10
SERVICE AGREEMENT
DATE: 21 JUNE 2002
PARTIES:
(1) JULIAN MICHAEL CUSACK of The Wharf, 1 Harbour Road, Paget Parish, Bermuda
(the "Executive"); and
(2) ASPEN INSURANCE HOLDINGS LIMITED incorporated in the Islands of Bermuda
whose registered office is at 41 Cedar Avenue, Hamilton, Bermuda (the
"Company").
OPERATIVE TERMS:
1. INTERPRETATION
1.1 In this Agreement:
"Associated Company" means any body corporate which from time to time is:
(a) a parent undertaking of the Company; or
(b) any subsidiary undertaking of any such parent
undertaking of the Company; or
(c) a company over which the Company has control within the
meaning of section 840 of the Income and Corporation
Taxes Act 1988; or
(d) any company whose equity share capital is owned as to
20 per cent or more but not more than 50 per cent by
the Company.
"Board" means the board of directors of the Company from time to time;
"Group" means the Company and its Associated Companies (and "Group
Company" means any one of them);
"Individual Registration Byelaw" means the Lloyd's Individual Registration Byelaw (No. 13 of
1996);
"Lloyd's" means the Society and Corporation of Lloyd's created and
governed by the Lloyd's Acts 1871 and 1982;
1.2 In this Agreement references to any statutory provision (including the
byelaws, regulations and mandatory directions and requirements of
Lloyd's from time to time)
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shall include such provision as from time to time amended, whether
before on or (in the case of re-enactment or consolidation only) after
the date hereof, and shall be deemed to include provision of earlier
legislation (as from time to time amended) which have been re-enacted
(with or without modification) or replaced (directly or indirectly) by
such provision and shall further include all statutory instruments or
orders from time to time made pursuant thereto.
1.3 Words and phrases defined in the Companies Act 1985 of the United
Kingdom (excluding its schedules) as amended by the Companies Act 1989
or in the Lloyd's Acts 1871 to 1982 or any byelaws, regulations,
mandatory directions or requirements of Lloyd's shall have the same
meanings in this Agreement unless they are otherwise defined in this
Agreement or unless the context or subject-matter otherwise requires.
2. APPOINTMENT
The Company shall employ the Executive with effect from 1st January 2003
and the Executive shall serve the Group as Finance Director of Aspen
Insurance UK Ltd, Chief Financial Officer of the Company and Chief
Executive Officer of Aspen Insurance Ltd.
3. TERM
3.1 The Executive may terminate his employment by giving not less than
twelve months' written notice to the Company, such notice to expire at
any time.
3.2 The Company may terminate the Executive's employment upon giving twelve
months' notice, subject to the terms of the Employment Act 2000. The
Company reserves the right to terminate the Executive's employment by
payment in lieu of notice.
3.3 Notwithstanding the provisions of clauses 3.1 and 3.2 the Executive's
employment shall terminate automatically when the Executive reaches
the age of 65 years.
4. DUTIES
4.1 During his employment hereunder the Executive shall:
(a) perform the duties and exercise the powers and functions which
from time to time may reasonably be assigned to or vested in him
by the Board in relation to the Company and any Associated
Company to the extent consistent with his job title set out in
clause 2 (without being entitled to any additional remuneration
in respect of such duties for any Associated Company);
(b) devote the whole of his working time, attention and ability to
his duties in relation to the Company and any Associated Company
at such place or places as the Board shall determine. The
Executive shall work at the Group's premises at 11 Victoria
Street, Hamilton, Bermuda, or such other place as the Company and
the Executive shall agree, provided that the Executive shall not
be required (except for visits in the ordinary course of his
duties) to go to or reside in parts of the world other than
Bermuda and London;
(c) comply with all reasonable requests, instructions and regulations
given or made by the Board (or by any one authorised by it) and
promptly provide such
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explanations, information and assistance as to the performance of
his duties assigned to him under this Agreement as the Board may
reasonably require;
(d) faithfully and loyally serve the Company to the best of his
ability and use his utmost endeavours to promote its interests
in all respects;
(e) not engage in any activities which would detract from the proper
performance of his duties hereunder, nor without the prior
written consent of the Board in any capacity including as
director, shareholder, principal, consultation, agent, partner or
employee of any other company, firm or person (save as the holder
for investment of securities which do not exceed three per cent
(3%) in nominal value of the share capital or stock of any class
of any company quoted on a recognised stock exchange) engage or
be concerned or interested directly or indirectly in any other
trade, business or occupation whatsoever;
(f) not (and shall use every reasonable endeavour to procure that his
wife, infant children and persons connected with him within the
meaning of section 346 of the Companies Act 1985 of the U.K shall
not) deal or become or cease to be interested (within the meaning
contained in Part I of Schedule 13 to the Companies Act 1985) in
any securities of the Company or any Associated Company except in
accordance with the Company's Code of Practice in force from time
to time in relation to such transactions and/or the Model Code
for Securities for Transactions by Directors of Listed Companies
issued by The Stock Exchange with which Codes the Executive shall
comply and copies of which are obtainable from the Company
Secretary;
(g) comply at all times with the Lloyd's Model Code for Dealings in
Securities in force from time to time a copy of which is
obtainable from the Board;
(h) not contravene the provisions of Part V (Insider Dealing) of the
Criminal Justice Act 1993;
(i) if registration under the Individual Registration Byelaw is
necessary to enable the Executive to perform the duties assigned
to him under this Agreement, not do anything to prejudice such
registration and shall do all things which may be required from
time to time to comply with, and to maintain in full force and
effect his registration under the Individual Registration Byelaw;
(j) at such times as the Board may reasonably request and at the
expense of the Company undergo a medical examination by a doctor
of the Company's choice.
4.2 The Company shall, or shall procure that an Associated Company shall,
sponsor the Executive for registration under the Individual Registration
Byelaw if such registration is necessary to enable the Executive to
perform the duties assigned to him under this Agreement, and comply with
its obligations under the Individual Registration Byelaw as they relate
to the Executive.
4.3 Notwithstanding the provisions of clause 4.1, during any period of
notice given by the Executive pursuant to clause 3.1 or during any
period not exceeding twelve months from the date of notice being given
by the Company pursuant to clause 3.2 the Company shall
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be under no obligation to assign to or vest in the Executive any
powers, duties or functions or to provide any work for the Executive
and may at any time exclude the Executive from any premises of the
Company. During any such period of exclusion the Company shall have
the right to require the Executive not to speak to or otherwise
communicate with any director or employee of the Company or any
Associated Company or any person, firm or company, who at the date of
such exclusion is a client or customer of the Company or any
Associated Company, about any matter or thing relating to the business
or affairs or finances of the Company or any Associated Company or of
any such client or customer of the Company or any Associated Company.
4.4 The Executive shall be entitled to receive the full salary and
benefits due under this Agreement for the period of any such exclusion
as is mentioned in clause 4.3.
5. REMUNERATION AND COMMISSION
5.1 The Executive shall be paid by way of remuneration for his services
during his employment hereunder a salary at the rate (the "Salary Rate")
of $312,000.00 per annum, which shall be inclusive of any fees to which
the Executive may be entitled as a director of the Company or of any
Associated Company other than Wellington Reinsurance Ltd. The Company
shall pay the Executive's proper and reasonable expenses relating to the
maintenance of the Executive's primary residence in Bermuda during the
term of his employment. Prior to such payment the Executive shall
provide to the Company any substantiation for such expenses requested by
the Company. Notwithstanding the foregoing, the maximum amount the
Company shall pay in respect of housing allowance shall be $180,000.00
per annum.
5.2 The Board may at its discretion at any time or times resolve that the
Salary Rate is to be increased as from a date determined by the Board
and if it should do so and should enter into any memorandum or agreement
in writing with the Executive recording such increase or should notify
the Executive in writing of such increase, then for the purposes of this
Agreement the Salary Rate shall be deemed to be increased from such date
accordingly and the Executive shall be entitled as of right to salary at
the increased rate during his employment with the Company hereunder
after such date; but nothing in this Agreement shall impose any
obligation on the Company or the Board to make any such increase.
5.3 The Executive shall be eligible for a bonus of such amounts (if any)
at such times and subject to such conditions as the Compensation
Committee of the Board may in its absolute discretion decide.
5.4 The Company shall review the Salary Rate at least once in each
calendar year, the first such review to be on and with effect from 1
January in that year.
5.5 The Executive's salary will be payable by equal monthly instalments;
each monthly instalment will be in respect of a calendar month and will
be paid on or before the last day of such calendar month. Where the
employment has begun or ended in a calendar month, salary in respect of
that month will be the proportion of a normal month's instalment which
the days of employment in that month bear to the total days in the
month.
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6. PENSION AND INSURANCE BENEFITS
6.1 The Executive shall be eligible to become a member of such pension
scheme as the Board may establish in due course (the "Scheme"). The
Executive's membership of such Scheme shall be subject to the provisions
thereof as may be amended from time to time.
6.2 The Company shall provide the Executive with medical insurance,
permanent health insurance, personal accident insurance and life
assurance (subject to the relevant insurers' terms and conditions). The
Board shall have the right to change the arrangements for the provision
of such benefits as it sees fit or if in the reasonable opinion of the
Board the Company is unable to secure any such insurance under the rules
of any applicable scheme or otherwise at reasonable rates to cease to
provide any or all of the insurances.
7. EXPENSES
The Company shall reimburse to the Executive all travelling hotel
entertainment and other expenses properly and reasonably incurred by him
in the performance of his duties hereunder and properly claimed and
vouched for in accordance with the Company's expense reporting procedure
in force from time to time.
8. HOLIDAYS AND HOLIDAY PAY
8.1 In addition to the normal Bank and public holidays the Executive shall
be entitled to 30 working days' paid holiday and, if applicable, such
additional days as are set out in the Company's standard terms and
conditions of employment from time to time, during each calendar year to
be taken at such time or times as may be agreed with the Board. The
Executive may not without the consent of the person to whom he reports
carry forward any unused part of his holiday entitlement to a subsequent
calendar year and the Executive shall not be entitled to any salary in
lieu of untaken holiday.
8.2 For the calendar year during which the Executive's employment hereunder
commences or terminates he shall be entitled to such proportion of his
annual holiday entitlement as the period of his employment in each such
year bears to one calendar year. Upon termination of this employment for
whatever reason he shall if appropriate be entitled to salary in lieu of
any outstanding holiday entitlement.
9. SICKNESS OR INCAPACITY
9.1 The Company reserves the right at any time to require the Executive (at
the expense of the Company) to be examined by a medical adviser
nominated by the Company and the Executive consents to the medical
adviser disclosing the results of the examination to the Company and
shall provide the Company with such formal consents as may be necessary
for this purpose.
9.2 If the Executive shall be prevented by illness, accident or other
incapacity from properly performing his duties hereunder he shall report
this fact forthwith to the Company Secretary's office and if he is so
prevented for seven or more consecutive days he shall if required by the
Company provide an appropriate doctor's certificate.
9.3 If the Executive shall be absent from his duties hereunder owing to
illness, accident or other incapacity duly certified in accordance with
the provisions of clause 9.2 he shall be
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paid his full remuneration for any period of absence of up to a
maximum of 26 weeks in aggregate in any period of 52 consecutive weeks
and thereafter, subject to the provisions of clause 16, to such
remuneration (if any) as the Board shall in its absolute discretion
allow.
9.4 If the Executive shall be, on the basis of a medical report supplied to
the Company following his having undergone a medical examination
pursuant to clause 4.1(j) or 9.1, in the opinion of the Board unfit ever
to return to his duties (but in such circumstances and prior to any
action being taken under this clause, the Executive shall have the right
to have a second medical report from a duly qualified doctor or medical
adviser selected by the Executive and approved by the Board, which
approval shall not be unreasonably withheld, and the Board shall
properly take account of the balance of evidence under both medical
reports in considering whether to terminate the employment of the
Executive under this paragraph) the Company shall be entitled to place
the Executive on permanent sick leave without pay with effect from any
time on or after the commencement of payments under the permanent health
insurance arrangements referred to in clause 6.2.
10. CONFIDENTIAL INFORMATION
The Executive shall not during this employment hereunder (save in the
proper course thereof or as may be required by law or applicable
regulation) or at any time after its termination for any reason
whatsoever disclose to any period whatsoever or otherwise make use of
(and he shall at all times exercise all due care and diligence to
prevent the unauthorised disclosure or use of) any confidential or
secret information which he has or may have acquired in the course of
his employment relating to the Company or any Group Company or any
customers or clients of the Company or any Group Company including
without limiting the generality of the foregoing confidential or secret
information relating to the business or finances of any of the
aforesaid.
11. COPYRIGHT AND DESIGNS
11.1 The Executive hereby assigns to the Company all present and future
copyright, design rights and other proprietary rights if any for the
full term thereof throughout the world in respect of all works
originated by him at any time whether during the course of his normal
duties or other duties specifically assigned to him (whether or not
during normal working hours) either alone or in conjunction with any
other person and in which copyright or design rights may subsist except
only those designs or other works written, originated, conceived or made
by his wholly unconnected with his service hereunder.
11.2 It is agreed that for the purposes of section 2(1)(1B) of the Registered
Designs Act 1949 of the United Kingdom the Company shall be treated for
the purposes of that Act as the original proprietor of any design of
which the Executive may be the author in the circumstances described in
clause 11.1.
11.3 The Executive agrees and undertakes that he will execute such deeds or
documents and do all such acts and things as may be necessary or
desirable to substantiate the rights of the Company in respect of the
matters referred to in this clause. To secure his obligation under this
Agreement the Executive irrevocably appoints the Company to be his
attorney
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in his name and on his behalf to execute such deeds or documents and
do all such acts and things as may be necessary or desirable to
substantiate the rights of the Company in respect of the matters
referred to in this clause.
11.4 The Executive hereby irrevocably waives all moral rights that he had
or may have in any of the works referred to in clause 11.1
12. GRATUITIES AND CODES OF CONDUCT
12.1 The Executive shall comply with all codes of conduct from time to time
adopted by the Board.
12.2 The Executive shall not, except in accordance with any code of conduct
adopted by the Board or with the prior written consent of the Board,
directly or indirectly accept any commission, rebate, discount, gratuity
or gift, in cash or in kind from any person who has or is likely to have
a business relationship with the Company or any Associated Company and
shall notify the Company upon acceptance by the Executive of any
commission, rebate, discount, gratuity or gift in accordance with the
Company's code of conduct from time to time.
13. RESTRICTIVE COVENANTS
13.1 For the purpose of this clause 13:
"the BUSINESS" means the business of reinsurance and the UK commercial
lines business carried on by the Group or any individual Group Company
or any other business carried on by the Group or any individual Group
Company at the date of termination of his employment and with which the
Executive has been concerned to a material extent at any time in the 12
months immediately preceding such termination;
references to the "GROUP" and "GROUP COMPANIES" shall only be reference
to the Group and Group Companies in respect of which the Executive has
carried out material duties in the period of 12 months prior to the date
of termination of his employment;
"RESTRICTED PERSON" shall mean any person who or which has at any time
during the period of 12 months immediately preceding the date of
termination done business with the Company or any other Group Company as
customer or client or consultant and whom or which the Executive shall
have had personal dealings with, contact with or responsibility for
during the course of his employment;
"KEY EMPLOYEE" shall mean any person who at the date of termination of
the Executive's employment is employed or engaged by the Company or any
other Group Company with whom the Executive has had material contact
during the course of his employment and (a) is employed or engaged in
the capacity of Manager, Underwriter or otherwise in a senior capacity
and/or (b) is in the possession of confidential information belonging to
the Company and/or (c) is directly managed by or reports to the
Executive.
13.2 The Executive covenants with the Company that he will not in connection
with the carrying on of any business in competition with the Business
during his employment and for the period of 12 months after the
termination of his employment without the prior
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written consent of the Board either alone or jointly with or on behalf
of any person directly or indirectly:
13.2.1 canvass solicit or approach or cause to be canvassed or
solicited or approached for orders in respect of any services
provided and/or any products sold by the Company or any other
Group Company any Restricted Person;
13.2.2 solicit or entice away or endeavour to solicit or entice away
from the Company or any other Group Company any Key Employee.
13.3 The periods during which clauses 13.2.1 and 13.2.2 are expressed to
operate shall each be reduced by such period as the Executive shall have
complied during his notice period with a direction to perform no duties
and/or not to enter all or any premises of the Company or any Group
Company pursuant to Clause 4.3.
13.4 The Executive agrees that he will at the cost of the Company enter into
a direct agreement or undertaking with any Group Company whereby he will
accept restrictions and provisions corresponding to the restrictions and
provisions in Clauses 13.2.1 and 13.2.2 above (or such of them as may be
appropriate in the circumstances) in relation to such activities and
such area and for such a period not exceeding 12 months as such Group
Company may reasonably require for the protection of its legitimate
business interests.
13.5 The covenants contained in Clauses 13.2.1 and 13.2.2 are intended to be
separate and severable and enforceable as such.
14. TERMINATION BY RECONSTRUCTION OR AMALGAMATION
If the employment of the Executive hereunder shall be terminated by
reason of the liquidation of the Company for the purposes of
amalgamation or reconstruction or as part of any arrangement for the
amalgamation of the undertaking of the Company not involving liquidation
and the Executive shall be offered employment with the amalgamated or
reconstructed company on terms generally not less favourable than the
terms of this Agreement (including as to the continuation of any
directorship which he may then hold in the Company or any Associated
Company) the Executive shall have no claim against the Company in
respect of the termination of his employment by the Company.
15. TERMINATION OF DIRECTORSHIP
15.1 The Executive shall not during his employment do or fail to do
anything which causes or is likely to cause him to be prohibited by
law from continuing to act as a director.
15.2 If the Executive is removed from the office of director of the Company
or any Associated Company or if the Company or any Associated Company
fails in general meeting to re-elect the Executive as a director of the
Company or Any Associated Company (if he shall be obliged to retire by
rotation or otherwise pursuant to the Articles of Association of the
Company or any Associated Company) or if the Executive ceases to be a
director of the Company or any Associated Company for any other reason
whatsoever the Executive's employment under this Agreement shall
terminate and such
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termination shall be without prejudice to any claim which the
Executive may have for damages for breach of this Agreement provided
that the Company was not entitled at the time of such removal or
failure to re-elect or cessation as a director to terminate his
employment pursuant to clause 16.
16. TERMINATION OF EMPLOYMENT ON THE HAPPENING OF CERTAIN EVENTS
16.1 The Company without prejudice to any remedy which it may have against
the Executive for the breach or non-performance of any of the provisions
of this Agreement may by notice in writing to the Executive forthwith
terminate his employment without compensation if the Executive shall:
(a) become bankrupt or become the subject of an interim order under
the Insolvency Act 1986 of the United Kingdom or make any
arrangement or composition with his creditors; or
(b) be convicted of any criminal offence (other than an offence under
road traffic legislation in the United Kingdom or elsewhere for
which a penalty other than imprisonment is imposed); or
(c) be guilty of any serious misconduct, any conduct tending to bring
the Company or himself into disrepute, or any material breach or
non-observance of any of the provisions of this Agreement, or
conduct himself in a way which is materially prejudicial or
calculated to be materially prejudicial to the business of the
Group and/or any syndicates managed by the Group; or
(d) be disqualified from being a director of any company by reason of
an order made by any competent court; or
(e) fail or cease to be registered (where such registration is, in
the reasonable opinion of the Board, required for the performance
of his duties) by any regulatory body (including Lloyd's) in the
United Kingdom or elsewhere.
17. OBLIGATIONS UPON TERMINATION OF EMPLOYMENT
Upon the termination of his employment hereunder for whatever reason the
Executive shall:
(a) forthwith tender his resignation as a Director of the Company and
of any Associated Company without compensation, but without
prejudice to any other rights which he may have under this
Agreement. To secure his obligation under this Agreement the
Executive irrevocably appoints the Company to be his attorney in
his name and on his behalf to sign any documents and do any
things necessary to give effect thereto, if the Executive shall
fail to sign or do the same himself.
(b) deliver up to the Company all vehicles, keys, credit cards,
correspondence, documents, specifications, reports, papers and
records (including any computer materials such as discs or tapes)
and all copies thereof and any other property (whether or not
similar to the foregoing or any of them) belonging to the Company
or any Associated Company which may be in his possession or under
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his control, and (unless prevented by the owner thereof) any such
property belonging to other which may be in his possession or
under his control and which relates in any way to the business or
affairs of the Company or any Associated Company or any supplier,
agent, distributor or customer of the Company or any Associated
Company, and he shall not without written consent of the Board
retain any copies thereof;
(c) if so requested send to the Company Secretary a signed statement
confirming that he has complied with clause 17(b); and
(d) not at any time make any untrue or misleading oral or written
statement concerning the business and affairs of the Company or
any Associated Company or represent himself or permit himself to
be held out as being in any way connected with or interested in
the business of the Company or any Associated Company (except as
a former employee for the purpose of communicating with
prospective employers or complying with any applicable statutory
requirements).
18. EFFECT OF TERMINATION OF THIS AGREEMENT
The expiry or termination of this Agreement howsoever arising shall not
operate to affect any of the provisions hereof which are expressed to
operate or have effect thereafter and shall not prejudice the exercise
of any right or remedy of either party accrued beforehand.
19. OTHER TERMS AND CONDITIONS
The provisions of the Company's standard terms and conditions of
employment as agreed with the Executive from time to time shall apply to
the Executive's employment hereunder except so far as they are
inconsistent with the terms of this Agreement.
20. NOTICES
Any notice to be given hereunder shall be in writing. Notice to the
Executive shall be sufficiently served by being delivered personally to
him or be being sent by first class post addressed to him at his usual
or last known place of residence. Notice to the Company shall be
sufficiently served be being delivered to the Company Secretary or by
being sent by first class post to the registered office of the Company.
Any notice if so posted shall be deemed served upon the third day
following that on which it was posted.
21. PREVIOUS AND OTHER AGREEMENTS
This Agreement shall take effect in substitution for all previous
agreements and arrangements (whether written, oral or implied) between
the Company and the Executive relating to his employment which shall be
deemed to have been terminated by mutual consent with effect from the
commencement of the Agreement.
22. APPLICABLE LAW
Bermuda law shall apply to this Agreement and the parties submit to the
jurisdiction of the Supreme Court of Bermuda.
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IN WITNESS whereof this Agreement has been duly executed and delivered as a deed
the day and year first before written
Executed as a deed by ) JULIAN MICHAEL CUSACK
the Executive )
In the presence of: ) /s/ Julian Cusack
-----------------
Jeanette Maloney /s/ Jeanette Maloney
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Witness's name and signature
2 Crossfield Lane, Sandys [illegible word], Bermuda
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Witness's address
Executed as a deed by )
the Company )
acting by: )
/s/ Christopher O'Kane
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Director
/s/ [illegible name]
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Director/Secretary
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