Exhibit 10.13

 

SERVICE AGREEMENT

 

THIS AGREEMENT is made as of the 30th day of November 2004

 

BETWEEN:

 

MONTPELIER REINSURANCE LTD., whose registered office is situated at Crown House,
4 Par-la-Ville Road, Hamilton Bermuda (the “Company”); and

 

Jonathan B. Kim

“Olivet”

48 Pitts Bay Road

Pembroke HM 06

 

WHEREAS the parties desire to record the terms and conditions upon which the
Employee is employed by the Company.

 

NOW THEREFORE in consideration of the mutual covenants and promises herein
contained

 

IT IS HEREBY AGREED as follows:

 

1.             Interpretation

 

1.1           In this Agreement unless the context otherwise requires the
following words and expressions shall have the following meanings:

 

this “Agreement” means this service agreement and includes all schedules hereto;

 

the “Board” means the board of directors of the Company;

 

the “Companies Act” means the Companies Act 1981;

 

“Group Company” means and includes any company which is from time to time a
holding company (as defined by Section 86 of the Companies Act, but irrespective
of whether it is a Bermuda company or an overseas company) of the Company, a
subsidiary company (as so defined) of the Company, a subsidiary company (as so
defined) of a holding company (as so defined) of the Company or in which the
Company owns at least 50% of the issued share capital;

 

the “Parties” means the parties to this Agreement;

 

1.2           In this Agreement unless the context otherwise requires:

 

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1.2.1        references to statutory provisions shall be construed as references
to those provisions as amended or re-enacted or as their application is modified
by other provisions from time to time and shall include references to any
provisions of which they are re-enactments (whether with or without
modification); and

 

1.2.2        references to clauses and schedules are references to clauses
hereof and schedules hereto; references to sub-clauses or paragraphs are, unless
otherwise stated, references to sub-clauses of the clause or paragraphs of the
schedule in which the reference appears;

 

1.2.3        references to the singular shall include the plural and vice versa
and references to the masculine shall include the feminine and/or neuter and
vice versa; and

 

1.2.4        references to persons shall include companies, partnerships,
associations and bodies of persons, whether incorporated or unincorporated.

 

2.             Appointment

 

Subject to, and conditional upon, initial and continued permission being granted
to work and reside in Bermuda by the Bermuda Department of Immigration of the
Ministry of Home Affairs, the Company hereby appoints the Employee and the
Employee hereby agrees to serve the Company as General Counsel, Vice President
subject to the terms and conditions hereinafter contained.

 

3.             Term

 

The appointment of the Employee hereunder began on the 23rd of February 2004 and
shall continue unless and until terminated in accordance with the provisions
hereinafter contained.

 

4.             Duties and Responsibilities

 

During the continuance of his employment hereunder:

 

4.1           The Employee shall perform such duties and exercise such powers in
relation to the business of the Company or of any Group Company as may from time
to time reasonably be assigned to or vested in him by the Board and shall give
to the Board such information regarding the affairs of the Company and any Group
Company as it shall require and at all times and in all respects conform to and
comply with the reasonable directions and regulations made by the Board. The
Employee shall perform such services for any Group Company (without further
remuneration except as otherwise agreed) and shall accept such offices in any
such Group Companies as the Board may reasonably require.

 

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4.2           The Employee shall well and faithfully serve the Company and the
Group Companies and use his best endeavours to promote develop and extend their
businesses and interests giving at all times the full benefit of his knowledge,
expertise, technical skill and ingenuity.

 

4.3           The Employee shall not without the consent of the Board directly
or indirectly engage in any other business or be concerned or interested in any
other business of a similar nature to or which would or might compete with the
business for the time being carried on by the Company or any Group Company save
that he may (but without prejudice to clause 4.2) be interested as a holder or
beneficial owner of not more than 5% of any class of stock, shares or debentures
in any company (other than the Company, in which case, such limit shall not
apply) whose stock, shares or debentures are listed or dealt in on an appointed
stock exchange (as defined in the Companies Act).

 

4.4           The Company reserves the right to require the Employee not to
attend work/and or not to undertake all or any of his duties hereunder during a
period of up to 12 months immediately preceding the termination of his
employment, provided always that the Company shall continue to pay the
Employee’s salary and contractual benefits for such period.  This Clause 4.4
shall not affect the general right of the Company to suspend the Employee for
good cause.

 

5.             Remuneration and Reimbursement

 

5.1           The Company shall pay to the Employee by way of remuneration for
his services hereunder a salary at the rate (subject as hereinafter provided) of
US$ 200,000 per annum. Such salary shall be inclusive of any director’s fees
payable to the Employee by the Company or any Group Company and accordingly
either the Employee shall pay over or procure to be paid over to the Company all
such fees received or receivable by him or his remuneration hereunder shall be
reduced pro tanto.  The said salary shall be payable by equal monthly
instalments in arrears on the day appointed by the Board for the payment of
Employees’ salaries or pro rata where the Employee is only employed hereunder
during part of the month. The Compensation Committee of the Company’s Board,
subject to ratification by the Board, may increase or reduce the Employee’s
salary on each anniversary of the date of this Agreement, but not below the
amount of the Employee’s starting salary.

 

5.2           The Company shall also pay to the Employee all reasonable
travelling hotel and other out-of-pocket expenses which are properly incurred by
him in or about the performance of his duties hereunder and for which vouchers
(if so required) are provided to the reasonable satisfaction of the Board.

 

5.3           The Company will pay for two business-class or four-economy
round-trip flights to the United States per annum for the Employee.

 

5.4           The Employee shall be entitled to participate in:

 

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(i)            the Company’s medical and Dental Plan;

 

(ii)           a suitable pension arrangement;

 

(iii)          life insurance;

 

(iv)          the Company’s Annual Bonus Plan;

 

(v)           the Company’s Long-Term Incentive Plan;

 

(vi)          Subsidize parking and gym membership; and

 

(vii)         Any other employment benefit plans generally available to
Employees in the Company of the Employee’s stature, to the extent not
duplicative of benefits otherwise provided by the Company.

 

The details of these benefits, plans and schemes are set out in separate
documents, copies of which will be provided on request.  The benefits, plans and
schemes may be changed at the Company’s discretion.

 

5.5           During the Employee’s appointment under this Agreement, he shall
receive a housing allowance in Band B.

 

5.6           The Employee agrees that the Company may deduct from his pay any
sums which the Employee may owe the Company including, without limitation, any
overpayments or loans made to him by the Company or losses suffered by the
Company as a result of the Employee’s breach of this Agreement.

 

6.             Normal Hours and Holidays

 

The Employee shall conform to such hours of work as may from time to time
reasonably be required of him and shall not be entitled to receive any
additional remuneration for work outside his normal hours.  In addition to the
usual public holidays the Employee shall, subject as mentioned in the Schedule,
be entitled without loss of remuneration to 25 days holiday in each year to be
taken at such time or times as may be approved by the Chief Employee Officer of
the Company.  Any entitlement to holiday remaining at the end of any year may be
carried forward to the next succeeding year but no further.  The entitlement to
holiday (and on termination of employment holiday pay in lieu of holiday)
accrues pro rata throughout each year, provided that fractions of days shall be
disregarded in calculating entitlement to holiday or payment in lieu of holiday.

 

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7.             Confidentiality

 

7.1           The Employee shall not either during the continuance of his
employment hereunder (otherwise than in the proper performance of his duties
hereunder) or at any time after the determination thereof divulge to any person
whomsoever and shall use his reasonable endeavours to prevent the publication or
disclosure of any trade secret or other confidential information concerning the
business, finances, accounts, dealings, transactions or affairs of the Company
or any Group Company or of any of their respective clients entrusted to him or
arising or coming to his knowledge during the course of his employment hereunder
or otherwise.

 

7.2           The Employee shall upon the termination of his employment
hereunder immediately deliver up to the Company all fee schedules, lists of
clients, correspondence and other documents, papers and property belonging to
the Company or any Group Company or related to any of the matters referred to in
clause 7.1 which may have been prepared by him or have come into his possession
in the course of his employment hereunder and shall not retain any copies
thereof.

 

8.             Change of Status

 

8.1           If, before the expiration or determination of this Agreement, the
employment of the Employee hereunder shall be terminated by reason of the
liquidation of the Company or for the purpose of reconstruction or amalgamation,
and he shall be offered employment with any concern or undertaking resulting
from such reconstruction or amalgamation on terms and conditions not less
favourable (financially and in personal status) than the terms of this
Agreement, then he shall have no claim against the Company in respect of the
termination of his employment hereunder save in respect of accrued benefits.

 

8.2           Unless this agreement has been terminated under clause 9, if for
any reason the Employee shall either:

 

8.2.1        at the Company’s request resign as a director of the Company or any
Group Company; or

 

8.2.2        be removed from office as a director of the Company or any Group
Company;

 

then, notwithstanding his so ceasing to be a director, this Agreement shall not
automatically terminate and thereupon (and without any claim against the Company
in respect of such loss of office) the Employee’s employment hereunder shall
continue for the remaining period of this Agreement and all the terms and
conditions of this Agreement shall with the necessary variations apply to the
Employee’s employment but in any event, the Employee’s basic annual salary will
not at any time be less than the Employee’s starting salary under this
agreement.

 

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9.             Termination

 

9.1           Without prejudice to clauses 9.3 or 9.5 the Employee or the
Company may terminate the Employment by giving to the other party not less than
6 months’ written notice.

 

9.2           Without prejudice to its rights to terminate the Employment under
clause 9.1 or its rights to suspend the Employee, the Company may at its sole
discretion terminate the Employment with immediate effect at any time and
whether or not notice has been given by either party to terminate the Employment
by giving notice in writing to the Employee and if it does so the Company shall
pay the Employee within five business days of the Termination Date, in lieu of
notice under clause 9.1, a lump sum equal to the salary in the amount it would
have paid to the Employee if the Employment had terminated in accordance with
clause 9.1.

 

9.3           This Agreement shall be subject to termination by the Company by
summary notice in writing without pay in lieu of notice:

 

9.3.1                        if the Employee’s application for permission to
work and reside in Bermuda is refused or the Employee’s work permit and/or
permission to reside is revoked, and or a renewal application is refused

 

9.3.2                        if the Employee shall become of unsound mind or be
or become a patient for the purpose of any statute relating to mental health;

 

9.3.3                        if the Employee shall at any time be prevented by
illness or accident from performing his duties for a period of 6 consecutive
months or if he shall be absent from his duties by reason of illness or accident
for more than 180 working days in any consecutive twelve months (provided that
any such periods may be extended at the sole discretion of the Board);

 

9.3.4                        other than by written notice, if the Employee
terminates his employment for any reason prior to the expiration of this
Agreement other than in accordance with the clause 9.1 or if the Employee shall
have failed or neglected efficiently and diligently to discharge his duties
hereunder having received a written warning for the misconduct within the
previous 6 months or shall have committed any serious breach of his obligations
hereunder or shall have been guilty of conduct tending to bring himself or the
Company or any Group Company into disrepute or calculated or likely to affect
prejudicially the interests of the Company or any Group Company or shall have
committed an act of bankruptcy or compounded with his creditors generally.

 

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9.4           The termination by the Company of this Agreement shall be without
prejudice to any claim which the Company may have for damages arising from any
breach thereof by the Employee giving rise to such termination.

 

9.5           The normal retirement age for Employees of the Company is 60 years
of age.  The Employee’s Employment will terminate automatically without notice
on his 60th birthday.

 

9.6           This Agreement shall not, save as hereinbefore set out in this
Clause, be subject to termination by notice or otherwise by the Company or by
the Executive.

 

9.7           Until this Agreement is terminated pursuant to clause 9.3, the
Employee shall remain entitled to receive his salary payable hereunder in full
notwithstanding illness or other incapacity.

 

9.8           After notice of termination has been given by either party or if
the Employee seeks to resign without notice or by giving shorter notice than
that required under this Agreement then provided the Company continues to pay
the Executive the contractual benefits in accordance with this Agreement, the
Company has at its discretion the right for the notice period or balance of the
notice period (the “Garden Leave Period”) then outstanding until the termination
date of this Agreement to:

 

9.8.1                        exclude the Employee from the Company’s premises
and require the Employee not to attend at the Company’s premises; and/or

 

9.8.2                        require the Employee to carry out no duties; and/or

 

9.8.3                        require the Employee not to communicate or deal
with Employees, agents, consultants, clients or other representatives of the
Company;

 

Provided always that the maximum permitted Garden Leave Period shall be six
months.

 

10.           Consequence of Termination

 

10.1         Upon the termination of this Agreement howsoever arising, the
Employee shall at any time or from time to time thereafter upon the request of
the Company resign, without claim for compensation for loss of office, as a
director of the Company and such offices held by him in any of the Group
Companies as may be so requested and should he fail to do so, the Company is
hereby irrevocably authorised to appoint some person in his name and on his
behalf to sign and do any documents or things necessary or requisite to give
effect thereto.

 

10.2         Notwithstanding anything else to the contrary herein, should the
Company terminate this Agreement:

 

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10.2         Notwithstanding anything else to the contrary herein, should the
Company terminate this Agreement:

 

(a) pursuant to clause 9.3.1, then the Employee shall be entitled to receive
three months salary by way of repatriation expenses together with three months
accommodation allowance at the rate set out in clause 5.5 and reimbursement of a
one way business class air fare for himself and his family to the [United
States/United Kingdom/Canada], and all other payments under this Agreement shall
immediately cease and the Company shall have no further obligations to the
Employee arising hereunder;

 

(b)  pursuant to clause 9.3.2 or clause 9.3.3, then the Employee shall continue
to receive his salary for a period of 12 months following the termination of
this Agreement and the Company shall have no further obligations to the Employee
arising hereunder;

 

(c) pursuant to clause 9.3.4, then all payments under this Agreement shall
immediately cease and the Company shall have no further obligations to the
Employee arising hereunder.

 

11.           Non-Competition

 

11.1         Since the Employee has obtained in the course of his employment
prior to the date hereof and is likely to obtain in the course of his employment
hereunder knowledge of the trade secrets and also other confidential information
in regard to the business of the Company and of any Group Company with which he
becomes associated, the Employee hereby agrees with the Company that in addition
to the restrictions contained in clause 4.3 he will not in Bermuda, the United
States of America, the United Kingdom or the European Economic Community :

 

11.1.1      During the period of 12 months following the termination of his
employment hereunder (howsoever caused) either on his own account or for any
other person, firm or company directly or indirectly be engaged in or concerned
with any business or undertaking which is engaged in or carries on in Bermuda,
the United States of America, the United Kingdom or the European Economic
Community any insurance business which competes or seeks to compete with the
business carried on by the Company or any other Group Company at the date of
termination.

 

11.1.2      During the period of 12 months following the termination aforesaid
either on his own account or for any other person, firm or company directly or
indirectly solicit, interfere with or endeavour to entice away from the Company
or any Group Company the custom of any person, firm or company who at the date
of termination aforesaid or who in the period of 12 months immediately prior to
such date was a customer or client of or in the habit of dealing with the
Company or

 

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any Group Company or who at such date was to his knowledge negotiating with the
Company or any Group Company in relation to all or part of its business.

 

11.1.3      During the period of 12 months following the termination aforesaid
either on his own account or for any other person, firm or company solicit the
services of or endeavour to entice away from the Company or any Group Company
any director, Employee or consultant of the Company or any Group Company
(whether or not such person would commit any breach of his contract of
employment or engagement by reason of leaving the service of such company) nor
shall the Employee knowingly employ or aid or assist in or procure the
employment by any other person, firm or company of any such person.

 

11.2         While the restrictions aforesaid are considered by the Parties to
be reasonable in all the circumstances it is agreed that if any of such
restrictions shall, taken together, be adjudged to go beyond what is reasonable
in all the circumstances for the protection of the legitimate interests of the
Company or any Group Company but would be adjudged reasonable if part of the
wording thereof were deleted or modified the said restrictions shall apply with
such words deleted or modified.

 

11.3         The Employee hereby agrees that he will at the request and 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 herein contained (or such of them as may be
appropriate in the circumstances) in relation to such services and such area and
for such period as such company or companies may reasonably require for the
protection of its or their legitimate interests provided that the terms of such
restrictions and provisions will not be more onerous than the restrictions and
provisions of this agreement.

 

12.           Untrue Statements

 

The Employee shall not knowingly at any time make any untrue statement in
relation to the Company or any Group Company and in particular shall not after
the determination of his employment hereunder wrongfully represent himself as
being employed by or connected with the Company or any Group Company.

 

13.           Schedule

 

The provisions set out in the schedule hereto shall apply as if incorporated in
this Agreement.

 

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14.           Intellectual Property

 

14.1         The Employee may make discover or create Intellectual Property in
the course of his duties under this Agreement and agrees that in this respect he
has a special obligation to further the interests of the Company.

 

14.2         Subject to the provisions of the Patents Act 1977 the Registered
Designs Act 1949 and the Copyright Designs and Patents Act 1988 if at any time
during his employment under this Agreement the Employee makes or discovers or
participates in the making or discover of any Intellectual Property relating to
or capable of being used in the business for the time being carried on by the
Company or any Group Companies full details of the Intellectual Property shall
immediately be communicated by him to the Company and shall be the absolute
property of the Company.  At the request and expense of the Company the Employee
shall give and supply all such information data drawings and assistance as may
be requisite to enable the Company to exploit the Intellectual Property to the
best advantage and shall execute all documents and to all things which may be
necessary or desirable for obtaining patent or other protection for the
Intellectual Property in such parts of the world as may be specified by the
Company and for vesting the same in the Company or as it may direct.

 

14.3         The Employee irrevocable appoints the Company to be his agent in
his name and on his behalf to sigh execute or do any such instrument or thing
and generally to use his name for the purpose of giving to the Company (or its
nominee) the full benefit of the provisions of this clause and in favour of any
third party a certificate in writing signed by any director or the secretary of
the Company that any instrument or act falls within the authority conferred by
this clause shall be conclusive evidence that such is the case.

 

14.4         If the Intellectual Property is not the property of the Company the
Company shall subject to the provisions of the Patents Act 1977 have the right
to acquire for itself or its nominee his rights in the Intellectual Property
within 3 months after disclosure pursuant to this clause on fair and reasonable
terms to be agreed or settled by a single arbitrator.

 

14.5         The Employee waives all of his moral rights (as defined in the
Copyright, Designs and Patents Act 1988) in respect of any acts of the Company
or any acts of third parties done with the Company’s authority in relation to
any Intellectual Property which is the property of the Company by virtue of this
clause.

 

14.6         Rights and obligations under this clause shall continue in force
after termination of this Agreement in respect of Intellectual Property made
during the Employee’s Employment under this Agreement and shall be binding upon
his representatives.

 

15.           Dispute Resolution and Grievance Procedures

 

15.1         If the Employee has a grievance regarding the Employment he should,
in the first instance, speak to the Chief Operating Officer.  If the grievance
is not resolved to his satisfaction, he should then refer to the dispute
resolution procedure, which will be provided to him with his letter of
employment.

 

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15.2         The disciplinary procedures applicable to the Employee will be
provided to him with his letter of employment.

 

15.3         The disciplinary and grievance procedures do not form part of this
Agreement.

 

16.           Delegation

 

The Company may at any time and from time to time delegate its power and
authority under this Agreement to any Group Company and such delegation (or the
revocation thereof) shall be effective upon the Company’s giving written notice
of the same to the Employee.

 

17.           Notices

 

Notices may be given by either Party by pre-paid first class post or by hand
delivery addressed to the other Party at (in the case of the Company) its
registered office for the time being and (in the case of the Employee) his last
known address. Any such notice given by post shall be deemed to have been served
on the second week day after despatch (public holidays excepted) and any notice
so given by hand shall be deemed to have been served when delivered if delivered
during normal business hours or, if delivered outside such hours, at the next
time after delivery when normal business hours commence

 

18.           Miscellaneous

 

The expiration or termination of this Agreement howsoever arising shall not
operate to affect such of the provisions hereof as are expressed or intended to
remain in full force and effect notwithstanding such termination.

 

18.1         If any of the clauses, conditions, covenants or restrictions of
this Agreement or any deed or document emanating from it shall be found to be
void but would be valid if some part thereof were deleted or modified, then such
clause, condition, covenant or restriction shall apply with such deletion or
modification as may be necessary to make it valid and effective.

 

18.2         This Agreement shall be binding and enure for the benefit of the
successors of the Parties but shall not be assignable.

 

18.3         This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the Parties relating to its subject
matter.

 

18.4         The headings in this Agreement are inserted for convenience only
and shall not affect the construction of this Agreement.

 

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18.5         This Agreement may be executed in counterparts each of which when
executed and delivered shall constitute an original but all such counterparts
together shall constitute one and the same instrument.

 

18.6         No provision in this Agreement may be amended unless such amendment
is agreed to in writing, signed by the Employee and by a duly authorised officer
of the Company.  No waiver by either Party of any breach by the other Party of
any condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same or any prior or subsequent time.  Any waiver must be in writing and
signed by the Employee or a duly authorised officer of the Company, as the case
may be.

 

18.7         This Agreement shall be governed by and construed in accordance
with the laws of Bermuda and the Parties hereby irrevocably submit to the
non-exclusive jurisdiction of the courts of Bermuda.

 

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

 

 

SIGNED by

 

)

/s/ Thomas G.S. Busher

on behalf of Montpelier Reinsurance Ltd.

 

)

 

in the presence of:

 

)

 

 

 

 

 

 

 

 

 

/s/ B. Chiaramonte

 

 

 

Witness B. Chiaramonte

 

 

 

 

 

 

 

 

 

 

 

SIGNED by Jonathan B. Kim

 

)

/s/ Jonathan B. Kim

in the presence of:

 

)

 

 

 

 

 

 

 

 

 

/s/ B Chiaramonte

 

 

 

Witness B. Chiaramonte

 

 

 

 

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THE SCHEDULE

 

1.             Hours of Work:   The Employee shall conform to such hours of work
as may reasonably be required of him for the proper performance of his duties
hereunder and shall not be entitled to receive any additional remuneration for
work outside his normal hours.

 

2.             Medical and Other Insurance:  The Employee will be entitled to
participate in the Company medical insurance plan and other insurance plans from
time to time subject to the provisions of the company’s insurance plans in
effect at the time.

 

3.             Pension Provisions:  The Employee will be entitled to participate
in the Company’s pension plan from time to time subject to the provisions of
such pension plan in effect at the time.

 

4.             Incentive Plans:  The Employee will be entitled to participate in
the Montpelier Annual Incentive Plan, the Montpelier Long-Term Incentive Plan
and any other incentive plan for which the Employee is eligible, from time to
time subject to the provisions of such plans in effect at the time.

 

5.             Employee Handbook: The Employee shall adhere to the Company’s
Employee Handbook, a copy of which has been given to the Employee.  The Handbook
contains details of Company policies and procedures and descriptions of
disciplinary and grievance procedures, dress code and other matters relevant to
the Employee’s employment.  The Company reserves the right to vary the Handbook
from time to time.

 

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