CHAIRMANSHIP AGREEMENT
 
This Chairmanship Agreement (the “Agreement”) is effective as of the 1st day of
January, 2014, between Everest Reinsurance Group, Ltd., a Bermuda exempted
company incorporated with limited liability (the “Company”), and Joseph V.
Taranto (“Mr. Taranto”).
 
 
WITNESSETH
 
WHEREAS, Mr. Taranto will cease serving as Chief Executive Officer of the
Company at the close of business on December 31, 2013, in accordance with the
terms of his employment agreement dated July 1, 2012; and
 
WHEREAS, at its most recent Annual General Meeting held on May 15, 2013, Mr.
Taranto was elected by the Company’s shareholders to serve on the Company’s
Board of Directors (“Board”) as Chairman of the Board for a one-year term
expiring on the date of the Company’s 2014 Annual General Meeting; and
 
WHEREAS, the Company wishes to continue to secure the services of Mr. Taranto as
a Director and Chairman of the Board pursuant to the terms and conditions
hereof; and
 
WHEREAS, Mr. Taranto is willing to accept such a role on the Company’s Board of
Directors (the “Board”) and to enter into this Agreement;
 
NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
 
 

1.   POSITION; DUTIES; RESPONSIBILITIES

 
1.1    The Company hereby retains Mr. Taranto and Mr. Taranto hereby agrees to
serve during the term of this Agreement as a non-employee director and Chairman
of the Board of the Company (“Chairman”) in accordance with the Company’s
Bye-laws and subject to annual election to the Board by the Company’s
shareholders during the Company’s Annual General Meetings that occur over the
Term of this Agreement; provided, however, that in no event shall Mr. Taranto be
deemed an employee of the Company or any of its affiliates or be required to
serve as a director of the Company unless he consents to do so.
 
1.2    During the course of his Chairmanship for the Term of this Agreement, Mr.
Taranto agrees to devote such time as necessary to fulfill his duties as a Board
member and Chairman.
 
1.3    As Chairman and Board member, Mr. Taranto’s duties shall include:
 
 

 (a)   Attending all scheduled Board meetings during the year.

 

 (b)   Serving on the Board’s Investment Committee.

 
 
 

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(c)   Serving as the Board’s representative in consulting with the Company’s
Chief Executive Officer (“CEO”) to approve share buybacks in accordance with the
pending Board authorization for share buybacks.

 

 (d)   Maintaining existing and developing new business relationships that will
be beneficial to the Company.

 

 (e)   Providing additional support, advice and counsel on any special or
extraordinary projects as requested from time-to-time by the Board or the
Company’s CEO.

 

2.   TERM

 
The term of this Agreement shall commence as of January 1, 2014 and shall
continue through December 31, 2016, subject to Mr. Taranto’s annual election to
the Board by the Company’s shareholders during the Company’s Annual General
Meetings that occur over the Term of this Agreement.
 
 

3.   COMPENSATION

 
During the Term of this Agreement the Company shall pay Mr. Taranto:
 
3.1           An annual retainer of One Million Five Hundred Thousand Dollars
($1,500,000) (“Retainer”), payable quarterly on the 15th day of the second month
of each quarter.
 
3.2           Standard annual director fees, including equity compensation
pursuant to the Company’s 2009 Non Employee Director Stock Option and Restricted
Stock Plan, as determined by the Board as compensation for all Board Members
(“Director Fees”).
 

4.   EXPENSE REIMBURSEMENTS

 
During the Term of this Agreement, Mr. Taranto will be entitled to receive
reimbursement by the Company for all reasonable, documented out-of-pocket
expenses incurred by him in connection with his performing services hereunder.
 

5.   TERMINATION

 
5.1    Removal Without Cause.  In the event that (a) Mr. Taranto is removed from
the Board without cause, or (b) the Company’s shareholders fail to elect Mr.
Taranto to the Board at any Annual General Meeting occurring during the Term of
this Agreement, then this Agreement shall immediately terminate, and Mr. Taranto
shall have no further obligations of any kind under or arising out of this
Agreement.  The Company shall be obligated to pay Mr. Taranto the following:
 
(i)    within sixty (60) days of the Agreement’s termination date, a lump sum
cash payment equal to the remainder of the Retainer payments that Mr. Taranto
would have earned had he remained on the Board for the entire Term of this
 
 
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 Agreement, subject to a maximum payment of One Million Five Hundred Thousand
Dollars ($1,500,000);
 
(ii)    all outstanding Director Fees earned but not yet paid up to the date of
termination; and
 
(iii)    all reimburseable out-of-pocket expenses incurred by Mr. Taranto in
connection with his duties but not yet paid.
 
5.2    Director Resignation for Good Reason.  If any of the following
circumstances shall have occurred without Mr. Taranto’s express consent and
shall have remained uncorrected for more than thirty (30) days following Mr.
Taranto’s giving written notice of such occurrence to the Company, then this
Agreement shall immediately terminate and Mr. Taranto’s resignation from the
Board shall be deemed a “Resignation for Good Reason”: (a) a materially adverse
change in the nature or status of his position or responsibilities as Chairman;
(b) a reduction by the Company in the Retainer set forth in Section 3.1 of this
Agreement; or (c) a material breach of this Agreement by the Company.  In the
event of such Resignation for Good Reason, the Company shall pay to Mr. Taranto
the sums set forth in section 5.1(i)-(iii).
 
5.3    Due Cause.  The Company may remove Mr. Taranto from the Board and
terminate this Agreement at any time for Due Cause.  In the event of such
removal for Due Cause, Mr. Taranto shall only receive all outstanding Director
Fees earned but not yet paid up to the date of removal and any reimburseable
out-of-pocket expenses incurred by Mr. Taranto in connection with his duties but
not yet paid.  The term “Due Cause” shall mean (a) repeated and gross negligence
in fulfillment of, or repeated failure of Mr. Taranto to fulfill, his material
obligations under this Agreement, in either event after written notice thereof,
(b) material willful misconduct by Mr. Taranto in respect of his obligations
hereunder, (c) conviction of any felony, or any crime of moral turpitude, or (d)
a material breach in trust committed in willful or reckless disregard of the
interests of the Company or its affiliates or undertaken for personal gain.
 
5.4    For the sake of clarity and by way of example of how the calculus
contained in section 5.1(i) would operate, if Mr. Taranto was removed from the
Board without cause or Mr. Taranto resigned his directorship for Good Reason on
July 1, 2014, he would receive a lump sum payment of $1,500,000 (i.e., $4.5M
Retainer x 30/36 = $3.75M.  $3.75M > $1.5M, therefore payment capped at $1.5M
due to Mr. Taranto).
 
In contrast, if Mr. Taranto was removed from the Board without cause or resigned
his directorship for Good Reason on July 1, 2016, he would receive a lump sum
payment equal to $750,000 (i.e., $4.5M Retainer x 6/36 = $750,000.  $750,000 <
$1.5M, therefore payment of $750K due to Mr. Taranto).
 
 

6.   GOVERNING LAW.

 
This Agreement shall be deemed a contract made under, and for all purposes shall
be construed in accordance with, the laws of Bermuda without reference to the
principles of conflict of laws.
 
 
 
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7.   ENTIRE AGREEMENT

 
This Agreement contains all the understandings and representations between the
parties hereto pertaining to the subject matter hereof and supersedes all
undertakings and agreements, whether oral or in writing, if any there be,
previously entered into by them with respect thereto.
 
 

8.   AMENDMENT OR MODIFICATION: WAIVER

 
No provision of this Agreement may be amended or modified unless such amendment
or modification is agreed to in writing, signed by Mr. Taranto and by a duly
authorized officer of the Company. Except as otherwise specifically provided in
this Agreement, no waiver by either party hereto of any breach by the other
party of any condition or provision of the Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar provision or
condition at the same or any prior or subsequent time.
 
 

9.   NOTICES

 
Any notice to be given hereunder shall be in writing and delivered personally or
sent by overnight mail, addressed to the party concerned at the address
indicated below or to such other address as such party may subsequently give
notice of hereunder in writing:
 
If to the Company:
 
Everest Re Group, Ltd.
Wessex House
45 Reid St., 2nd Floor
P.O. Box HM 845
Hamilton, HM DX, Bermuda
Attention: General Counsel
 
If to Mr. Taranto:
 
  160 Henry Street
Brooklyn, New York 11201

 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of June 19,
2013.
 

 
EVEREST RE GROUP, LTD.
 

         
/S/ SANJOY MUKHERJEE
   
/S/ JOSEPH V. TARANTO
 
Sanjoy Mukherjee
   
Joseph V. Taranto
 
Executive Vice President
   
 
 

 

                                            

 
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