Exhibit 10.1
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 1st day of July, 2005, by and
between XL Capital Ltd, a Cayman Islands corporation (the "Company"), XL
Insurance (Bermuda) Ltd, a Bermuda exempted company, XL Re Ltd, a Bermuda
exempted company, X.L. America, Inc., a U.S. corporation (XL Insurance (Bermuda)
Ltd, XL Re Ltd, and X.L. America, Inc. are direct or indirect wholly owned
subsidiaries of the Company and are collectively referred to herein as the
"Guarantors") and Paul S. Giordano (the "Executive").
WHEREAS, the Executive, the Company and the Guarantors entered into an
employment agreement dated as January 1, 2005 (the "Employment Agreement");
WHEREAS, the Company, the Guarantors and the Executive desire to amend the
Employment Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and other valuable consideration, the
Company, the Guarantors and the Executive agree as follows.
1. New Section 27 is added to the Employment Agreement to read as follows:
"27. Housing Benefit. The Executive shall be paid a monthly housing
allowance by the Company equal to the amount set forth below, beginning
effective July 1, 2005 and continuing for a period of three years
thereafter. The amount will be paid on a monthly basis at the time regular
monthly payroll is paid. The monthly payments for the first twelve months
beginning July 1, 2005 will be $15,000 per month, the payments for the
second twelve months will be $10,000 per month, and the payments for the
third twelve months will be $5,000 per month. Notwithstanding the
foregoing, payment of the housing allowance set forth herein will cease
upon termination of the Executive's employment with the Company and its
Affiliates; provided, however, that if the Executive's employment is
terminated by the Company for any reason other than death or Cause
(including
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by the Company giving notice of nonrenewal under Section 2 above), or if
the Executive terminates his employment under Sections 8(b), 8(d)(iii) or
8(d)(iv) above, the Executive will receive, in a single lump sum as soon as
practicable after termination of employment, an amount equal to any
remaining housing allowance payments scheduled to be paid to the Executive
as set forth above for the twenty-four months following such termination of
employment. In the event of the death of the Executive during the three
year housing benefit payment period, the spouse or estate of the Executive
will continue to receive monthly housing allowance payments through the end
of the three year payment period or until the principal personal residence
purchased by the Executive on July 1, 2005 for use by him and his family
upon his relocation to the United States (the "Principal Residence") is
sold, whichever is earlier."
2. New Section 28 is added to the Employment Agreement to read as follows:
"28. Principal Residence. The Company shall reimburse the Executive
for any Loss, as computed below, incurred by the Executive on the sale of
his Principal Residence if such sale closes on or prior to June 30, 2010
and, except as expressly set forth below, prior to the Executive's
termination of employment with the Company and its Affiliates for any
reason other than his death (the period of protection against loss is
referred to herein as the "Loss Protection Period"). Any Loss incurred by
the Executive during the Loss Protection Period shall be computed as
follows: A "Loss" shall mean at any time during the Loss Protection Period,
that the purchase price paid by the Executive for the Principal Residence
exceeds the higher of (i) the net sale proceeds (i.e., the sale price less
any reasonable and customary brokerage commissions, fees and closing costs)
received by the Executive for the Principal Residence during the Loss
Protection Period or (ii) the average of two independent appraisals of the
fair market value of the Principal Residence as of the date of execution of
the purchase and sale agreement for the sale of the Principal Residence by
the Executive (one of such independent appraisers shall be selected by the
Company and the other shall be selected by the Executive), less any
reasonable and customary brokerage commissions, fees and closing costs. In
addition to a payment equal to the amount of any Loss, the Company shall
pay to the Executive an additional amount such that, after payment by the
Executive of all taxes (including income, employment and excise taxes, and
computed after taking into account any allowable tax deduction resulting
from the Loss) imposed on the Loss payment and any additional payments
hereunder, the Executive retains from such payments an amount equal to the
Loss. Such payments shall be paid by the Company to the Executive within
fifteen (15) business days following closing of the sale and receipt of the
necessary appraisals, and such payment shall be made in accordance with any
requirements under Section 409A of the Code, to the extent, if any, that
Section 409A is applicable to
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such payment. Notwithstanding the foregoing, if the Executive's employment
is terminated by the Company for any reason other than death or Cause
(including by the Company giving notice of nonrenewal under Section 2
above), or if the Executive terminates his employment under Section 8(b),
8(d)(iii) or 8(d)(iv) above, the Loss Protection Period will not end until
the earlier of twenty-four months following such termination of employment
or June 30, 2010. In the event the Executive's employment terminates due to
his death, the Loss Protection Period will continue through June 30, 2010
and any amount payable, as set forth above, shall be paid to the
Executive's spouse or estate. The cost of the appraisals required under
this Section shall be paid by the Company."
3. This Agreement shall be governed and construed and interpreted in
accordance with the laws of the State of New York, without reference to the
principles of conflict of laws thereof.
4. This Agreement may be executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
XL CAPITAL LTD
By: /s/ Kirstin Romann Gould
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Name: Kirstin Romann Gould
Title: Senior Vice President and
Chief Corporate Legal Officer
PAUL S. GIORDANO
By: /s/ Paul S. Giordano
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Name: Paul S. Giordano
GUARANTORS:
XL INSURANCE (BERMUDA) LTD
By: /s/ Kirstin Romann Gould
-----------------------------
Name: Kirstin Romann Gould
Title: Secretary
XL RE LTD
By: /s/ Kirstin Romann Gould
-----------------------------
Name: Kirstin Romann Gould
Title: Secretary
X.L. AMERICA, INC.
By: /s/ Celia R. Brown
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Name: Celia R. Brown
Title: Executive Vice President