EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT dated and effective as of May 31, 2006 (the “Effective Date”),
between James River Group, Inc., a Delaware corporation (“Company”) and Gregg T.
Davis (“Executive”).

 

WITNESSETH:

 

WHEREAS, the Board of Directors of the Company desires to employ the Executive
as Executive Vice President - Finance and the Executive has agreed to be so
employed; and

 

 

WHEREAS, the parties desire to set forth herein the terms of such employment;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties agree as follows.

 

1.  Employment and Term. The Company hereby employs Executive as Executive Vice
President - Finance, and Executive hereby accepts such employment on the terms
hereinafter set forth. The term of this Agreement shall commence as of the
Effective Date and shall continue until the third anniversary of the Effective
Date. The term of this Agreement shall thereafter be automatically be renewed
for additional three (3) year periods unless written notice to the contrary
shall be given by either party to the other not less than one hundred eighty
(180) days prior to the end of the initial or any renewal term that the term
shall not thereafter be renewed. The initial term plus any renewals thereof
shall hereafter be referred to as the “Term”.

 

2.  Compensation. Executive shall be paid a base salary of not less than two
hundred seventy five thousand dollars ($275,000) per year, payable in periodic
installments in accordance with the Company’s regular payroll practices.
Executive shall be eligible to receive such discretionary bonuses as the Board
of Directors of the Company (“Board”), in its discretion, may determine. Within
one hundred eighty (180) days after the close of each fiscal year of the Company
during the Term, the Board shall review Executive’s performance during such
fiscal year and decide whether to increase Executive’s base salary and award any
discretionary bonus to Executive. Executive shall also be entitled, during the
Term to participate in all retirement, disability, pension, savings, health,
medical, dental, insurance and other fringe benefits or plans of the Company
generally available to executive employees, including specifically the following
at the Company’s expense:

(a) six (6) weeks of paid vacation per annum (not subject to rollover);

 

1

 

--------------------------------------------------------------------------------

 

 

(b) coverage under the Company’s current health care insurance plans in effect
from time to time, including coverage for Executive’s dependents, on the same
terms and conditions, including any required payment of premiums or other costs
by Executive, as are applicable to other executive employees; and,

(c) coverage under the Company’s group term life and accidental death and
dismemberment and long term disability coverage, all on the same terms and
conditions, including any required payment of premiums or other costs by
Executive, as are applicable to other executive employees.

3.   Duties. Executive shall perform all duties normally associated with the
position of Executive Vice President - Finance, and such other reasonable duties
as may be assigned to him by the Chief Executive Officer, Chief Financial
Officer or the Board. Executive will devote his full business time and effort to
discharge his duties.

 

4.  Privileged Information.

 

(a) Executive will not at any time during the Term or thereafter:

(i) reveal, divulge or make known to any person, firm or corporation or use for
his personal benefit or the benefit of others (except the Company), directly or
indirectly, any confidential or proprietary information received or developed by
him during the course of his employment. For the purposes of this Section
4(a)(i) confidential and proprietary information (“Privileged Information”)
shall be defined to mean (1) all historical and pro forma projections of loss
ratios incurred by the Company and any of its direct or indirect subsidiaries
(hereinafter referred to as “Affiliates”), (2) all historical and pro forma
actuarial data relating to the Company and any of the Affiliates, (3) historical
and pro forma financial results, revenue statements, and projections for the
Company and its Affiliates, (4) all information relating to the Company’s or the
Affiliates’ systems and software (other than the portion thereof provided by the
vendor to all purchasers of such systems and software), (5) all information
relating to the Company’s unique underwriting approach, (6) all information
relating to plans for acquisitions of any business entities or blocks of
business, (7) non-public business plans, and (8) all other information relating
to the financial, business or other affairs of the Company and its Affiliates,
including their customers. Section 4(a)(i) shall not apply to Executive
following the termination of his employment with the Company or its Affiliates
with respect to any Privileged Information known or made generally available to
the general public or within the industry.

(ii) reveal, divulge or make known to any person, firm or corporation, or use
for his personal benefit or the benefit of others (except the Company), directly
or indirectly, the name or names of any customers of the Company or any of its
Affiliates, nor will he reveal, divulge or make known to any person, firm or
corporation, or use for his personal benefit or the benefit of others (except
the Company), directly or indirectly, any trade secrets or any knowledge or
information, or any fact concerning any business methods or operational
procedures engaged in by the Company or its Affiliates (collectively,
“Privileged Information”); provided, however, the restrictions set forth in

 

2

 

--------------------------------------------------------------------------------

 

this Section 4(a)(ii) shall not apply to Executive following the termination of
his employment with the Company or its Affiliates with respect to any Privileged
Information known or made generally available to the general public or within
the industry.

 

5.   Noncompetition.

 

(a) Executive acknowledges and agrees that (i) the Company has spent substantial
money, time and effort in developing customer goodwill and relationships for the
benefit of the Company, (ii) as the Company’s Executive Vice President –
Finance, Executive has knowledge of the Company’s most Confidential and
Privileged Information, and has been and will be compensated for the
development, and supervising the development, of the same, and (iii) Executive
has unique insight into and knowledge of the skills, talents and capabilities of
the Company’s key employees.

 

(b) Executive agrees that during his employment by the Company, and for the
restricted period (“Restricted Period”) after his employment with the Company
ceases, he will not:

 

(i) compete against the Company by engaging in, or by assisting any other person
or entity to engage in, or by having an ownership interest in, any Competitive
Business in the Territory (as defined below);

 

(ii) compete against the Company by soliciting any Customer (as defined below)
of the Company or its Affiliates to provide any goods or services in competition
against the Company or its Affiliates;

 

(iii) induce or persuade any Customer of the Company or its Affiliates not to do
business with, or to switch business from, the Company or its Affiliates;

 

(iv) solicit, or assist others in soliciting, Key Employees (as defined below)
to either leave the Company or to engage in a Competitive Business.

(c) For purposes of this Agreement, the following capitalized terms shall have
the meanings set forth below:

(i) “Restricted Period” shall mean one (1) year, unless a court with
jurisdiction determines that such period is overbroad or unenforceable in which
case it shall mean either nine (9) months, six (6) months, or three (3) months,
whichever period is the maximum enforceable Restricted Period.

(ii) “Competitive Business” shall mean the business of acquiring, holding and/or
operating insurance companies that offer excess and surplus line or workers’
compensation insurance, and any other material business that the Company or any
of its Affiliates is engaged in as of the date of this Agreement and as the
business of the Company and its Affiliates evolves during its Term; provided,
however, that if a court with jurisdiction determines that such definition is
overbroad or unenforceable, it shall be further limited to the business of the
Company and its Affiliates regarding which

 

3

 

--------------------------------------------------------------------------------

 

Executive had Confidential or Privileged Information during the last year of the
Term, and if this narrowed definition is still deemed by such court to be
overbroad or unenforceable, it shall be further limited to business of the
Company under Executive’s management and control during the last year of the
Term;

(iii) “Territory” shall mean each and every state or other United States
jurisdiction (“State(s)”) where Company is licensed or approved to underwrite or
offer insurance at the end of the Term and/or is then in the process of seeking
to be so licensed or approved; provided, however, that if a court with
jurisdiction determines that such definition is overbroad or unenforceable, it
shall be further limited to States with respect to which Executive had
Confidential or Privileged Information regarding the Company’s business or
operations during the last year of the Term, and if this narrowed definition is
still deemed by such court to be overbroad or unenforceable, it shall be further
limited to States where Executive conducted, or supervised the conduct of,
Company business during the last year of the Term;

(iv) “Customer” shall mean any customer of the Company or its Affiliates that
purchased products or services from the Company during the last year of the
Term; provided, however, that if a court with jurisdiction determines that such
definition is overbroad or unenforceable, it shall be further limited to
customers about which Executive either had Confidential or Privileged
Information or personal or management responsibility for customer contact or
service, and if this narrowed definition is still deemed by such court to be
overbroad or unenforceable, it shall be further limited to customers of the
Company with which Executive had direct contact during the last six (6) months
of the Term;

(v) “Key Employees” shall mean any executive, managerial, sales, marketing, or
supervisory level employee of the Company or its Affiliates under Executive’s
management authority during the last year of the Term.

(d) The restrictions contained in this Section 5 shall not prevent the purchase
of ownership by Executive of not more than three percent (3%) of the securities
of any class of any corporation, whether or not such corporation is engaged in
any Competitive Business, which are publicly traded on any securities exchange
or any “over the counter” market.

6.  Termination.

Executive’s employment hereunder shall terminate under the following
circumstances:

(a) Termination for Cause. The Company may terminate the employment of Executive
for cause at any time upon written notice to Executive specifying the cause of
the termination. For the purposes of this Section, “for cause” shall include
only discharge resulting from a determination by the Company that: (i) Executive
has willfully violated Section 4 or 5 of this Agreement; (ii) Executive has
grossly neglected his duties hereunder; (iii) Executive has been convicted of a
felony or a crime involving

 

4

 

--------------------------------------------------------------------------------

 

moral turpitude (meaning a crime that includes the commission of an act of
depravity, dishonesty or bad morals); or (iv) Executive has committed an act of
dishonesty, fraud or embezzlement against the Company.

(b) Expiration or Termination Without Cause. The Company may terminate this
Agreement at any time without cause (which may be for business performance or
for any other reason) or may elect to have the Term of this agreement expire.

(c) Termination by Executive. Executive may, at his option, terminate this
Agreement for Good Reason. “Good Reason” shall mean the occurrence of any one or
more of the following events:

(i)            The assignment to the Executive of duties materially and
adversely inconsistent with the position of Executive Vice President - Finance;

 

(ii)          The failure by the Company to continue to provide the Executive
with substantially similar perquisites or benefits under the Company’s benefit
programs; provided, that any amendment, modification or discontinuation of any
plans or benefits that generally affect substantially all domestic salaried
employees or that generally effect all executive employees of the Company shall
not be deemed to constitute Good Reason;

 

(iii)         The Company's requiring the Executive to be based at any office or
location more than 35 miles from the location at which he performs his services
as of the Effective Date; or

 

(iv)        Any material breach by the Company of any of the provisions of this
Agreement or any failure by the Company to carry out any of its material
obligations hereunder, in either case, for a period of thirty (30) days after
receipt of written notice from the Executive and the failure by the Company to
cure such breach or failure during such thirty (30) day period.

(d) Termination due to Disability. The Company may terminate Executive’s
employment if he is prevented from performing his responsibilities under this
Agreement for a consecutive period of six (6) months or longer during any twelve
(12) month period of the Term hereof, by reason of any accident, illness, or
mental or physical disability.

 

7.  Compensation and Benefits Upon Termination.

(a) In the event that the Company terminates this Agreement without cause or
elects to have the Term of this Agreement expire, in either case other than for
business performance, or if Executive terminates this Agreement for Good Reason,
Executive is entitled to receive:

 

5

 

--------------------------------------------------------------------------------

 

 

(i) an amount equal to Executive’s base salary for a period of thirty-six (36)
months after the Termination Date in accordance with the terms of Section 2
hereof;

(ii) the continuation at the Company’s expense of coverage under all plans,
insurance policies and other fringe benefits described in Section 2 hereof, for
a period of twelve (12) months after the Termination Date;

(iii) any discretionary bonus to which Executive is entitled on the Executive’s
last day of employment; and

(iv) any unused vacation and any non reimbursed reasonable business expenses.

 

(b) If Executive is terminated for cause, or due to disability, the Company
shall have no further obligations to Executive, except as provided in any stock
option or other bonus or incentive plan to which Executive is entitled, and
Executive shall have no further rights hereunder.

 

(c) If Executive is terminated for business performance, Executive is entitled
to receive:

(i) an amount equal to Executive’s base salary for eighteen (18) months after
the Termination Date in accordance with the terms of Section 2 hereof;

 

(ii) the continuation at the Company’s expense of coverage under all plans,
insurance policies and other fringe benefits described in Section 2 hereof, for
a period of twelve months after the termination date;

 

(iii) any discretionary bonus to which Executive is entitled on the Executive’s
last day of employment; and

 

(iv) any unused vacation and any non reimbursed reasonable business expenses.

 

(d) All compensation and benefits made pursuant to this Section shall cease if
Executive violates any of the terms of Sections 4 or 5 during the twelve (12)
months following his last day of employment. In addition to this remedy, the
Company shall have all other remedies provided by this Agreement and by law for
the breach of Section 4 or Section 5 hereof.

 

8.   Uniqueness of Services, Acknowledgements. Executive acknowledges that the
services to be rendered under the provisions of this Agreement are of a special,
unique and extraordinary character, involve access to and development of
confidential, proprietary and Privileged Information, and involve developing and
protecting customer relationships and goodwill, and that it would be difficult
or impossible to replace such services and that, by reason thereof, Executive
agrees and consents that if he violates any of the provisions of this

 

6

 

--------------------------------------------------------------------------------

 

Agreement, the Company, in addition to any other rights and remedies available
under this Agreement or otherwise, shall be entitled to an injunction to be
issued by a tribunal of competent jurisdiction restricting Executive from
committing or continuing any violation of this Agreement.

 

9.  Further Acknowledgements. Executive further acknowledges and agrees that the
restrictions contained in Sections 4 and 5 are reasonable and necessary to
protect the legitimate interest of the Company, in view of, among other things,
the short duration of the restrictions, the narrow scope of the restrictions,
the Company’s interests in protecting its confidential, proprietary, trade
secret and Privileged Information (which Executive agrees has a useful life of
more than one (1) year) and its customer relationships and goodwill, Executive’s
background and capabilities which will allow him to seek and accept employment
without violation of the restrictions, Executive’s substantial equity interest
in the Company, and Executive’s entitlements under this Agreement. If any
provision contained in Section 4 or 5 is adjudged unreasonable in any
proceeding, then such provision shall be deemed modified by reducing the period
of time during which such provision is applicable and/or, if applicable, the
geographic area to which such provision applies, to the extent necessary for
such provision to be adjudged reasonable and enforceable.

 

10.  Notices. Any notices provided for or permitted by this Agreement shall be
in writing and shall be deemed to have been duly given when delivered in person
or three (3) days after it is deposited in a United States Postal Depository,
postage prepaid, registered or certified mail, return receipt requested,
addressed to the party for whom intended at such party’s address set forth below
or to such other address as such party may designate by notice in writing given
in the manner provided below:

 

 

To Executive:

Mr. Gregg Davis

 

 

JamesRiver Group, Inc.

 

 

300 Meadowmont Village Circle, Suite 333

 

Chapel Hill, NC 27517

 

 

To Company:

James River Group, Inc.

 

 

300 Meadowmont Village Circle, Suite 333

 

Chapel Hill, NC 27517

 

11.  Entire Agreement: Amendments. This Agreement constitutes the entire
agreement and understanding between Executive and the Company with respect to
the subject matter hereof and shall supersede any all other prior agreements and
understandings, whether oral or written, relating thereto or the employment of
Executive by the Company. This Agreement may not be rescinded, modified or
amended except by an instrument in writing signed by the party hereto against
whom any such waiver is sought to be enforced.

12.  Partial Invalidity. The invalidity or unenforceability, by statue, court
decision or otherwise, of any term or condition of this Agreement shall not
affect the validity or enforceability of any other term or condition hereof.

 

7

 

--------------------------------------------------------------------------------

 

 

13.  Governing Law. This Agreement shall be construed and administered in
accordance with the laws of the State of North Carolina, without regard to the
principles of conflicts of law which might otherwise apply.

14.  Assignability. This Agreement may not be assigned by Executive, and all its
terms and conditions shall be binding upon and inure to the benefit of the
Company and its successors. Successors to the Company shall include, without
limitation, any corporation or corporations acquiring, directly or indirectly,
all or substantially all of the assets of the Company whether by merger,
consolidation, purchase or otherwise and such successor shall thereafter be
deemed the “Company” for purposes hereof.

 

15.  Dispute Resolution.

(a)         Arbitration. In the event of disputes between the parties with
respect to the terms and conditions of this Agreement, such disputes shall be
resolved by and through an arbitration proceeding to be conducted under the
auspices of the American Arbitration Association (or any like organization
successor thereto); provided, however, that either party may seek temporary,
preliminary and or permanent injunctive relief with respect to appropriate
matters (including without limitation enforcement of Sections 4 and 5 of this
Agreement) without resort to arbitration. Such arbitration proceeding shall be
conducted pursuant to the commercial arbitration rules (formal or informal) of
the American Arbitration Association in as expedited a manner as is then
permitted by such rules (the “Arbitration”). Both the foregoing agreement of the
parties to arbitrate any and all such claims, and the results, determination,
finding, judgment and/or award rendered through such Arbitration, shall be final
and binding on the parties hereto and may be specifically enforced by legal
proceedings.

(b)           Procedure. Such Arbitration may be initiated by written notice
from either party to the other which shall be a compulsory and binding
proceeding on each party. The Arbitration shall be conducted by an arbitrator
selected in accordance with the procedures of the American Arbitration
Association. Time is of the essence of this arbitration procedure, and the
arbitrator shall be instructed and required to render his or her decision within
thirty (30) days following completion of the Arbitration.

(c)           Venue and Jurisdiction. Any action to compel arbitration hereunder
or otherwise relating to this Agreement shall be brought exclusively in a state
court or federal court located in the City of Raleigh, North Carolina provided
that if a federal court has jurisdiction over the subject matter thereof, then
such action shall be brought in federal court, and the Company and Executive
hereby irrevocably submit with regard to any such action or proceeding for
itself and in respect to its property, generally and unconditionally, to the
jurisdiction of the aforesaid courts.

(d)           Waiver of Jury Trial. IN THE EVENT OF ANY LITIGATION WITH RESPECT
TO ANY MATTER CONNECTED WITH THIS AGREEMENT OR THE AGREEMENTS OR TRANSACTIONS
CONTEMPLATED HEREUNDER ALL OF THE PARTIES HERETO WAIVE ALL RIGHTS TO A TRIAL BY
JURY.

 

8

 

--------------------------------------------------------------------------------

 

 

* * * * *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

 

 

JAMES RIVER GROUP, INC.

 

/s/ J. Adam Abram                            

By: J. Adam Abram

Its: President and Chief Executive Officer

 

 

/s/ Gregg T. Davis                              

Gregg T. Davis

 

 

9