Exhibit 10.1

 

AXIS SPECIALTY LIMITED

Overbay, 106 Pitts Bay Road

Pembroke, HM 08

 

March 13, 2006

 

PERSONAL AND CONFIDENTIAL

 

D. Andrew Cook

14 Pampas Lane

Smith’s FL05

Bermuda

 

Dear Andrew:

 

This will confirm the agreement (the “Agreement”), dated as of the date first
set forth above (the “Execution Date”), that has been reached with you in
connection with the termination of your employment with AXIS Specialty Limited
(the “Company”).

 

1.                                       Termination of Employment. We have
agreed that your employment with the Company as Chief Financial Officer shall
terminate effective April 1, 2006 (the “Termination Date”). You hereby confirm
that effective April 1, 2006, you shall no longer hold any officer or director
positions with the Company or any of its parents, subsidiaries or affiliates, or
any other offices or positions that you hold in connection with your employment
with the Company, and you agree to execute such documents and take such actions
as may be necessary or desirable to effectuate the foregoing. During the period
from the Execution Date to the Termination Date, the Employment Agreement
between you and the Company dated January 1, 2004 (the “Employment Agreement”)
shall continue in full force and effect. Without limiting the generality of the
foregoing, the Employment Agreement shall govern any termination of your
employment which occurs prior to the Termination Date. Upon the Termination
Date, the Employment Agreement shall terminate other than with respect to
provisions identified in Section 4(a) below. A copy of the Employment Agreement
is annexed hereto as Exhibit A.

 

2.                                       Separation Payments and Benefits. In
consideration for your execution of and compliance with the terms and conditions
in this Agreement including, but not limited to, your consent to the Release set
forth in paragraph 3 below:

 

(a)                                              The Company agrees to pay you
the equivalent of twelve (12) months of your current annual base salary of
$472,500 to be payable in a lump sum on the Termination Date.

 

(b)                                             With respect to your outstanding
equity awards set forth on Exhibit B, such awards shall vest on the Termination
Date and you shall be entitled to exercise any options within 90 days following
the Termination Date after which such time any unexercised options shall
terminate.

 

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(c)                                              The Company agrees to pay you
an amount equal to any and all reasonable and necessary unreimbursed business
expenses incurred by you on behalf of the Company prior to the Termination Date.

 

(d)                                             The Company agrees to provide
you with twelve (12) months of group health insurance coverage (i.e., medical
and dental coverage) at the Company’s expense, under a Bermuda health and
welfare plan substantially similar to the plan offered to employees of the
Company based in Bermuda and as such plans may be amended from time to time.

 

(e)                                              In lieu of repatriation
benefits as stated in paragraph 3(f) of your Employment Agreement, the Company
will pay you an additional $25,000.00 in a lump sum on the Termination Date.

 

(f)                                                The payments, benefits and
awards contemplated by paragraphs 2(a), 2(b), 2(d), 2(e) above shall be made
provided that this Agreement becomes effective (as provided for in paragraph 9
below). Notwithstanding the foregoing, the Company shall have no obligation to
provide you with the payments, benefits or awards contemplated by paragraphs
2(a), 2(b), 2(d), and 2(e) above in the event your employment is terminated by
the Company for Cause as determined by the Board of Directors of AXIS Capital
Holdings Limited (“Parent”) pursuant to paragraph 3(a)(iii) of the Employment
Agreement prior to the Termination Date.

 

(g)                                             You acknowledge that the
payments, benefits and awards referred to in this Agreement are in lieu of and
in full satisfaction of any amounts that might otherwise be payable or due to
you under any contract, plan, policy or practice, past or present, of the
Company or any of the other Company Releasees (as defined below), including,
without limitation, the Employment Agreement, the AXIS Capital Holdings 2003
Long-Term Equity Compensation Plan, and the AXIS Capital Holdings Limited 2004
Annual Incentive Plan. Notwithstanding the foregoing, nothing in this Agreement
shall impair or preclude your entitlement to any vested benefits you may have as
of the Termination Date under the Bermuda Retirement Plan.

 

(h)                                             Notwithstanding anything herein
to the contrary, your rights to any payment or benefits pursuant to the
Consulting Agreement dated the date hereof between you and the Company (the
“Consulting Agreement”) shall be governed by the terms of the Consulting
Agreement.

 

3.                                       Release.

 

(a)                                              In consideration of the
Company’s obligations set forth in this Agreement, including but not limited to
the payments and benefits described in paragraph 2 above, you voluntarily,
knowingly and willingly on behalf of yourself, your heirs, executors,
administrators, successors and assigns, hereby irrevocably and unconditionally
release the Company, its parents, their subsidiaries, divisions and affiliates,
together with their respective owners, assigns, agents, directors, partners,
officers, employees, consultants, shareholders, attorneys and representatives,
and any of their predecessors and successors and each of their estates, heirs
and assigns (collectively, the “Company Releasees”) from any and all charges,

 

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complaints, claims, liabilities, obligations, promises, agreements, causes of
action, rights, costs, losses, debts and expenses of any nature whatsoever,
known or unknown, which you or your heirs, executors, administrators, successors
or assigns ever had, now have or hereafter can, will or may have (either
directly, indirectly, derivatively or in any other representative capacity)
against the Company or any of the other Company Releasees by reason of any
matter, cause or thing whatsoever arising on or before the date this Agreement
is executed by you (the “Release”). This Release includes, without limitation,
any rights or claims relating in any way to your employment relationship with
the Company or any of the Company Releasees, or the termination thereof, arising
under Bermuda law, including, the Bermuda Employment Act 2000, and under the
Human Rights Act of 1981, the Commission for Unity and Racial Equality Act 1994,
as each Act may be amended, the U.S. Civil Rights Act of 1964 (“Title VII”) as
amended, the Age Discrimination in Employment Act, as amended by the Older
Workers’ Benefit Protection Act, or under any law of Bermuda or the U.S., or any
policy, agreement, understanding or promise, written or oral, formal or
informal, between the Company or any of the Company Releasees and you,
including, without limitation, the Employment Agreement.

 

(b)                                             By signing this Agreement, you
represent that you have not commenced or joined in any claim, charge, action or
proceeding whatsoever against the Company or any of the Company Releasees
arising out of or relating to any of the matters set forth in this paragraph 3.
You further represent that you will not be entitled to any personal recovery in
any action or proceeding of any nature whatsoever against the Company or any of
the other Company Releasees that may be commenced on your behalf arising out of
any of the matters released hereby.

 

(c)                                              You agree and acknowledge that
the Company and the other Company Releasees have fully satisfied any and all
obligations owed to you arising out of your employment with the Company (or the
termination thereof), and no further sums are owed to you by the Company or any
of the other Company Releasees, except as expressly provided in this Agreement.

 

(d)                                      In consideration of your obligations
set forth in this Agreement, including but not limited to the release described
in paragraph 3(a) above, the Company voluntarily, knowingly and willingly on its
behalf and on behalf of its parents, their subsidiaries, divisions and
affiliates, together with their respective owners, assigns, agents, directors,
partners, officers, employees, consultants, shareholders, attorneys and
representatives, and any of their predecessors and successors and each of their
estates, heirs and assigns, hereby irrevocably and unconditionally release you
and your heirs, executors, administrators, successors and assigns (collectively,
the “Executive Releasees”) from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, causes of action, rights, costs,
losses, debts and expenses of any nature whatsoever, known or unknown, which the
Company or any of the Company Releasees ever had, now have or hereafter can,
will or may have (either directly, indirectly, derivatively or in any other
representative capacity) against you or any of the other Executive Releasees by
reason of any matter, cause or thing whatsoever arising on or before the date
this Agreement is executed by the Company (the “Company Release”). This Company
Release includes, without limitation, any rights or claims relating in any way
to your employment relationship with the Company or any of the Company
Releasees, or the termination thereof, arising under any law of Bermuda or the
U.S., or any policy, agreement, understanding or

 

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promise, written or oral, formal or informal, between the Company or any of the
Company Releasees and you, including, without limitation, the Employment
Agreement.

 

4.                                       Covenants.

 

(a)          You reaffirm, and agree to comply with, all of your obligations set
forth in paragraph 4 (Assignment of Intellectual Property Rights), paragraph 5
(Non-Disclosure) and paragraph 6 (Non-Solicitation) of the Employment Agreement
(as defined above), and agree that such obligations shall remain in full force
and effect as stated in the Employment Agreement unless amended by the
aforementioned Consulting Agreement.

 

(b)         Notwithstanding anything herein to the contrary, in the event that
you violate any of your continuing obligations referenced in paragraph
4(a) above or any of the provisions set forth in section 7 herein: (i) the
Company shall have no obligation to enter into or make any payments under the
Consulting Agreement; (ii) the Company shall have no obligation to make or to
continue to make, the payments set forth in paragraphs 2(a), 2(b), and
2(e) above; and (iii) all outstanding and unvested equity awards held by you as
of the date of any such violation shall be forfeited.

 

(c)          On the Termination Date, the Company will notify the Bermuda
Department of Immigration that the Company has no objection to you seeking
employment in Bermuda and the Company shall provide a copy of such notice to
you. The notice shall be in the form annexed hereto as Exhibit C.

 

(d)         You shall be indemnified and secured harmless by the Parent and the
Company to the extent required by statute and the Bye-Laws of the Company as
amended from time to time.

 

5.                                       Waiver of Future Employment. You
acknowledge that you forever waive any interest in, or claim to, any future
employment with the Company, its parents or any of its subsidiaries, divisions
or affiliates, and further agree that you will not knowingly apply for, or
otherwise seek or accept employment with, any such entity at any time in the
future.

 

6.                                       No Admission. The Company’s offer to
you of this Agreement and the payments and benefits set forth herein are not
intended to, and shall not be construed as, any admission of liability or
wrongdoing on the part of the Company or any of the Company Releasees.

 

7.                                       Nondisparagement.

 

(a)          You agree that at all times hereafter, you shall not make, or cause
to be made, any public statement, observation or opinion that (i) accuses or
implies that the Company or any of the Company Releasees engaged in any
wrongful, unlawful or improper conduct, whether relating to your employment with
the Company (or the termination thereof), the business or operations of the
Company, or otherwise; or (ii) disparages, impugns or in any way reflects
adversely upon the business or reputation of the Company or any of the other
Company Releasees. Nothing in this paragraph 7 shall preclude you from providing
truthful testimony in response to a legal subpoena or as required by law.

 

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(b)         The Company agrees that at all times hereafter, neither it, Parent
or any of it’s Parent’s Executive Officers shall make, or cause to be made, any
public statement, observation or opinion that (i) accuses or implies that you
engaged in any wrongful, unlawful or improper conduct, whether relating to your
employment with the Company (or the termination thereof), or otherwise; or
(ii) disparages, impugns or in any way reflects adversely upon your reputation.
Nothing in this paragraph 7(b) shall preclude the Company, Parent or any of
their Executive Officers from providing truthful testimony in response to a
legal subpoena or as required by law.

 

8.                                       Consultation with Attorney/Voluntary
Agreement. You acknowledge that (i) the Company has advised you of your right to
consult with an attorney of your choosing prior to signing this Agreement,
(ii) you have carefully read and fully understand all of the provisions of this
Agreement, and (iii) you are entering into this Agreement knowingly, freely and
voluntarily in exchange for good and valuable consideration.

 

9.                                       Consideration and Revocation Period.
You have twenty-one (21) days to consider this Agreement, although you may elect
to sign it sooner. Once you have signed this Agreement, you shall have seven
(7) days from the date you sign it to revoke your consent to the Release by
delivering (by hand or overnight courier) written notice of revocation to me at
the Company, at the address listed above. In the event you do not revoke your
consent, the Release and this Agreement shall become effective on the eighth
(8th) day after the date you have signed this Agreement (the “Effective Date”).
In the event that you revoke your consent, the Release and this Agreement shall
become null and void and shall not become effective.

 

10.                                 Assignment. This Agreement is personal to
you and may not be assigned by you. This Agreement is binding on, and will inure
to the benefit of, the Company and the other Company Releasees.

 

11.                                 No Oral Modification; No Waivers. This
Agreement may not be changed orally, but may be changed only in a writing signed
by you and by a duly authorized representative of the Company. The failure of
you or the Company to enforce any of the terms, provisions or covenants of this
Agreement will not be construed as a waiver of the same or of the right of such
party to enforce the same. Waiver by you or the Company of any breach or default
by the other party of any term or provision of this Agreement will not operate
as a waiver of any other breach or default.

 

12.                                 Descriptive Headings. The paragraph headings
contained herein are for reference purposes only and will not in any way affect
the meaning or interpretation of this Agreement.

 

13.                                 Enforceability. It is the desire and intent
of the parties that the provisions of this Agreement shall be enforced to the
fullest extent permissible. In the event that any one or more of the provisions
of this Agreement is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remainder hereof will not in any way be
affected or impaired thereby and any such provision or provisions will be
enforced to the fullest extent permitted by law. Moreover, if any one or more of
the provisions contained in this Agreement is

 

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held to be excessively broad as to duration, scope, activity or subject, such
provisions shall be construed by limiting and reducing them so as to be
enforceable to the maximum extent compatible with applicable law.

 

14.                                 Each Party the Drafter. This Agreement, and
the provisions contained in it, shall not be construed or interpreted for, or
against, any party to this Agreement because that party drafted or caused that
party’s legal representatives to draft any of its provisions.

 

15.                                 Governing Law. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of Bermuda,
without reference to its choice of law rules. The parties hereby irrevocably
consent to the jurisdiction of Bermuda and courts located in Bermuda for
purposes of resolving any dispute under this Agreement and expressly waive any
objections as to venue in any such courts.

 

16.                                 Entire Agreement. This Agreement sets forth
the entire agreement and understanding between you and the Company and merges
and supersedes any and all prior agreements, representations, discussions, and
understandings of every kind and nature, written and oral, between you and the
Company concerning the subject matter hereof, including, but not limited to, the
Summary of Terms between you and the Company; provided, however, that the
Employment Agreement shall not be superseded until the Termination Date (except
with respect to those sections of the Employment Agreement which a remain in
full force and effect). You represent that, in executing this Agreement, you
have not relied upon any representation or statement made by the Company or any
other Company Releasees, other than those set forth herein, with regard to the
subject matter, basis or effect of this Agreement or otherwise.

 

If the foregoing sets forth our agreement as you understand it and consent to
it, please sign the enclosed copy of this Agreement and return it to me at the
Company.

 

 

Very truly yours,

 

 

 

AXIS SPECIALTY LIMITED

 

 

 

 

 

By:

 /s/ John R. Charman

 

 

 

Name: John R. Charman

 

 

Title: Chief Executive Officer

 

Agreed to and Accepted:

 

 /s/ Andrew Cook

 

D. Andrew Cook

 

Dated:

 

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