Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (“Agreement”) is effective as of October 1,
2016 and is by and between Argo Group International Holdings, Ltd. (“Company”)
and Jose Hernandez (“Executive”).

 

WHEREAS, Argo Group International Holdings, Ltd. (“Argo Group” or the “Company”)
is an international underwriter of specialty insurance and reinsurance products
in areas of the property and casualty market; and

 

WHEREAS, Executive desires to be employed by Company; and

 

WHEREAS, through the Company and its other subsidiaries, Argo Group offers a
comprehensive line of products and services designed to meet the unique coverage
and claims-handling needs of its clients (“Argo Group” shall mean, individually
and collectively, the Company and each of Argo Group’s subsidiaries); and

 

WHEREAS, Executive acknowledges and agrees that, in addition to providing
services to Company, Executive shall have dealings with and provide services to
Argo Group;

 

NOW THEREFORE, in consideration of the promises and mutual agreements herein set
forth, intending to be legally bound, the parties hereby agree as follows:

 

1.

Employment Period.  The Company hereby employs the Executive as an employee, and
the Executive agrees to be employed by the Company, upon the terms and
conditions set forth herein.  This Agreement is effective as of October 1, 2016
(the “Effective Date”) and shall continue for a fixed period expiring October 1,
2020 unless earlier terminated in accordance with Section 6 hereof (the “Initial
Term”).  Prior to the expiration of the Initial Term, the Company and the
Executive agree to negotiate in good faith an extension of the Initial Term
based on the terms and conditions of this Agreement, unless either the Company
or the Executive gives the other party written notice of its or his election not
to extend the Initial Term at least six (6) months prior to the end of the
Initial Term.  Company and Executive may agree to one or more extensions of the
Employment Period but any such agreement must be in writing signed by both
parties and must contain a set expiration date (each, a “Renewal Term”; the
Initial Term and each Renewal Term, if any, collectively, the “Employment
Period”).

 

2.

Duties.  The Executive agrees to serve the Company in the position of Head of
International reporting to the Company’s Chief Executive Officer and to perform
diligently and to the best of his abilities the duties and services of that
office. During the Employment Period, Executive shall perform the duties and
services that the Company assigns or delegates to him from time to
time.  Executive acknowledges and agrees that Executive owes a fiduciary duty of
loyalty, fidelity and allegiance to act at all times in the best interests of
Argo Group and further agrees not to engage or participate in any act that will
or is reasonably likely to injure the business, interests, or reputation of Argo
Group.  Unless otherwise agreed to by the Company and the Executive, the
Executive’s principal place of business with the Company shall be in Bermuda.
Executive shall travel to such extent as may be required in connection with the
performance of his duties.

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3.

Compensation.

 

 

(a)

Base Salary.  Company shall pay Executive an annual salary of U.S. Six Hundred
Thousand and 00/100 Dollars ($600,000) (“Base Salary”), less all applicable
legal deductions and/or withholding.  Base Salary shall be payable in accordance
with Company’s policies or practices in effect from time to time, but in any
event no less frequently than monthly.  Base Salary shall be reviewed annually
by the Company for any potential increases (but not decreases), provided that
the parties agree that Executive’s Base Salary shall not be reduced. If the Base
Salary is increased by the Company, such Base Salary then constitutes the Base
Salary for all purposes of this Agreement.

 

 

(b)

Profit Sharing Awards and Long-Term Incentive Awards.  In addition to Base
Salary, during the Employment Period, the Executive may, in the sole discretion
of the Company from time to time, be eligible to earn profit sharing awards and
long-term incentive awards contingent upon the achievement of specific
objectives as established by the Company.  Executive will be eligible to receive
profit sharing and long-term incentive awards beginning in the year
2017.  Executive’s profit sharing awards have a target of Nine Hundred Thousand
and 00/100 Dollars ($900,000).  Executive’s long-term incentive awards have a
target of Nine Hundred Thousand and 00/100 Dollars ($900,000).  Any profit
sharing award and/or long-term incentive award shall be paid at the time the
Company normally pays such bonuses or awards, and Executive is only entitled to
receive any such profit sharing and/or long term incentive award if Executive is
employed by Company at the payment date.

 

 

(c)

Benefits.  As additional compensation for Executive, Company shall provide or
maintain for Executive medical, welfare and health insurance benefit plans on
the same terms and conditions as are made available to all similarly situated
executives of the Company generally, subject to the terms and conditions of such
plans as in effect from time to time.

 

4.

Vacation.  Executive shall be entitled to Paid Time Off (“PTO”) during
Executive’s employment under this Agreement, subject to Company's paid time off
policy as may be in effect from time to time.

 

5.

Reimbursement For Expenses. Company shall reimburse Executive for all reasonable
and necessary business expenses incurred by Executive in the performance of
Executive’s duties during the Employment Period, provided that requests for
reimbursement are submitted in accordance with Company's policies and procedures
as in effect from time to time.  In no event shall expenses eligible for
reimbursement be reimbursed later than December 31 of the year following the
calendar year in which the Executive incurred the related expense.  Any
reimbursement in one calendar year may not affect the amount that may be
reimbursed in any other calendar year and a right to reimbursement may not be
exchanged or liquidated for another benefit or payment.

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6.

Termination of Employment.

 

 

(a)

Death.  This Agreement shall automatically terminate upon the death of the
Executive.

 

 

(b)

Disability.  Subject to the requirements of the Americans with Disabilities Act
and any similar state law that may apply, Company may terminate Executive’s
employment and this Agreement if Company determines that Executive is physically
or mentally impaired and unable to perform the essential functions of
Executive’s job, with or without reasonable accommodation, during any
“Disability Period,” defined as sixty (60) consecutive days or ninety (90) days
in any twelve (12)-month period.

 

 

(c)

Termination by Company for Cause.  Company may immediately terminate this
Agreement and Executive's employment with the Company upon written notice to
Executive at any time for Cause.  For purposes of this Agreement, “Cause” will
exist if:

 

 

(i)

Company determines Executive has committed any dishonest or disloyal act, or has
engaged in misconduct or gross negligence in connection with Executive’s
employment;

 

 

(ii)

Executive is convicted of, or pleads guilty or nolo contendere to, or enters
into an agreement for deferred adjudication, deferred prosecution, or other form
of delayed disposition for any felony or a crime of moral turpitude;

 

 

(iii)

Company determines Executive has engaged in conduct that violates Argo Group’s
policies or is detrimental to the reputation, character or standing of, or
otherwise is injurious to, Argo Group, monetarily or otherwise;

 

 

(iv)

without limiting the generality of Section 6(c)(i), the breach or threatened
breach of any of the provisions of Section 8;

 

 

(v)

Executive fails to obtain, apply for, or maintain all registrations and/or
licenses required to perform Executive’s duties (as contemplated by this
Agreement) by any applicable statute or regulation or by the rules of any
applicable governing or regulatory entity, including the suspension,
cancellation, revocation, termination or restriction of any such registration or
license; or

 

 

(vi)

any ruling or finding in any state or federal court or by an arbitration
tribunal that Executive has breached, or cannot perform a material part of his
obligations hereunder due to, Executive’s obligations under any confidentiality,
non-disclosure, non-solicitation, non-competition, non-recruitment, or any other
type of restrictive covenant.

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(d)

Termination by Company Without Cause.  Company may terminate Executive's
employment at any time, regardless of any reason, by providing at least six (6)
months written notice to the Executive.

 

 

(e)

Termination by Executive.  Provided that the Executive is not in breach of this
Agreement, Executive may terminate Executive’ employment at any time, regardless
of reason, by providing at least six (6) months written notice to Company.

 

 

(f)

Non-Renewal by the Company.  The Company may terminate this Agreement by
electing not to renew the Employment Period pursuant to the applicable notice
requirements under Section 1.

 

 

(g)

Non-Renewal by the Executive.  The Executive may terminate this Agreement by
electing not to renew the Employment Period pursuant to the applicable notice
requirements under Section 1.

 

7.

Effect of Termination.  The termination of this Agreement shall not affect any
rights of Executive that shall have accrued prior to the date of such
termination.

 

 

 

(a)

Upon Death or Disability of the Executive.

 

 

(i)

During the Employment Period, if the Executive's employment is terminated
pursuant to Section 6(a) due to death, the Executive's estate shall be entitled
to receive the Base Salary set forth in Section 3 accrued through the date of
death and any profit sharing award Fully-Earned through the date of such
termination; provided, that, such profit sharing award shall be paid on the
first day of the month coincident with or first following the thirtieth (30th)
day following the date Executive’s employment is terminated.  For purposes of
this Agreement, “Fully-Earned” shall mean that for purposes of determining
whether the Executive shall be entitled to a profit sharing award, that such
Executive shall be treated as if he had been employed through the last date of
the regular period for determining whether or not a profit sharing award is
payable in the standard manner that all such executives are evaluated even
though Executive is no longer employed by the Company, and his eligibility for a
profit sharing award, if any, shall be determined accordingly.  

 

(ii)

During the Employment Period, if the Executive's employment is terminated
pursuant to Section 6(b) due to Disability, the Executive shall be entitled to
receive the Base Salary set forth in Section 3 accrued through the first day
that the Executive is substantially unable to perform the duties hereunder in
accordance with Section 6(b) above and any profit sharing award Fully-Earned
through the date of such termination;

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provided, that, such profit sharing award shall be paid on the first day of the
month coincident with or first following the thirtieth (30th) day following the
date Executive’s employment is terminated.  

 

(iii)

In the case of the Executive's death or termination due to Disability, a
surviving spouse of the Executive or the Executive, as applicable, shall be
eligible for continuation of family health benefits pursuant to Section 3(c)
subject to compliance with plan provisions at the rate currently paid by the
Executive at the time of termination for a one-year period after the date of the
Executive's death or termination due to Disability, as applicable (“Extended
Health Benefits”); provided, however, that (A) such benefit continuation
coverage shall be considered part of the benefit continuation coverage which the
surviving spouse or Executive, as applicable, is entitled to receive under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
and (B) the surviving spouse or the Executive, as applicable, timely elects
COBRA coverage.

 

(iv)

In the event that Executive's employment is terminated pursuant to Section 6(a)
or (b), Executive or the surviving spouse, as applicable, shall not be entitled
to any Fully Earned profit sharing award pursuant to Sections 7(a)(i) or (ii) or
Extended Health Benefits pursuant to Section 7(a)(iii) unless and until
Executive or the executor, personal representative or administrator of the
Executive’s estate, as applicable, executes a full and complete release of Argo
Group in the form attached as Exhibit A (the “Release”) and any and all
applicable revocation periods expire.  Additionally, in the event that
Executive's employment is terminated pursuant to Section 6(b) due to Disability,
it shall be a condition precedent of receipt of Extended Health Benefits that
the Executive remains in full compliance with Section 8.  For clarity, if
Executive or the executor, personal representative or administrator of the
Executive’s estate, as applicable, revokes the Release at any time or the
Executive breaches any of his obligations under Section 8, Company, in addition
to all other remedies set forth in this Agreement, will have no further
obligation to provide the Extended Health Benefits.  

 

(b)

By the Company Without Cause.

 

If the Company terminates Executive's employment with the Company under Section
6(d) and the termination constitutes a “separation from service” (within the
meaning of Section 409A of the Code and any related regulations or other
guidance promulgated thereunder (“Section 409A”)):

 

 

(i)

The Executive shall be entitled to receive his Base Salary set forth in Section
3(a) accrued through the date of such termination.

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(ii)

If a Change of Control (x) has not then occurred, the Company shall pay
Executive an amount equal to his Base Salary less applicable withholdings and
deductions, or (y) has then occurred (or is reasonably expected to occur), the
Company shall pay Executive an amount equal to two times his Base Salary, less
applicable withholdings and deductions, such amount to be paid in installments
over the period of six (6) months in accordance with the Company’s regular
payroll practices (“Severance Pay”); provided, however, that the first such
severance payment shall be paid on the first day of the month coincident with or
first following the sixtieth (60th) day following the date of termination in an
amount equal to the severance payments that would have otherwise been paid
during that sixty (60) day period; and provided, further, that if the Executive
is a “specified employee” (within the meaning of Section 409A of the Code) and
any such installment payments are scheduled to be paid after March 15 of the
year following termination of employment, the payment of severance may be
further delayed as described in and subject to Section 7(d); and provided,
further, that any Severance Pay under this Section 7(b) shall be reduced by any
payments required pursuant to the WARN Act.

 

(iii)

The Executive shall be entitled to receive any profit sharing award Fully Earned
for the year in which Executive’s employment is terminated; provided, that, such
annual incentive award shall be paid on the first day of the month coincident
with or first following the sixtieth (60th) day following the date of
termination; provided, further, that if the Executive is a “specified employee”
(within the meaning of Section 409A of the Code), payment of such annual
incentive award may be subject to delay in accordance with Section 7(d).

 

(iv)

The Executive shall be eligible for continuation of health benefits pursuant to
Section 3(c) (subject to compliance with the applicable plan provisions) at the
rate currently paid by the Executive at the time of termination until the
Executive obtains reasonably equivalent coverage or for eighteen (18) months
from the date of termination, whichever is earlier (“Severance Benefits”);
provided, however, that (A) such benefit continuation coverage shall be
considered part of the benefit continuation coverage which the Executive is
entitled to receive under COBRA, and (B) the Executive timely elects COBRA
coverage.

 

(v)

Executive shall remain bound by the restrictive covenants and obligations
contained in Sections 8(d) and 8(e).

 

(vi)

Executive is not entitled to any Fully Earned profit sharing award, Severance
Pay or Severance Benefits pursuant to this Section 7(b) unless and until
Executive executes a full and complete release of Argo Group in the form
attached as Exhibit A (the “Release”) and any and all applicable revocation
periods expire.  Additionally, it shall be a condition precedent

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of receipt of Severance Pay or Severance Benefits pursuant to this Section 7(b)
that the Executive remains in full compliance with Section 8.  For clarity, if
Executive revokes the Release at any time or breaches any of his obligations
under Section 8, Company, in addition to all other remedies set forth in this
Agreement, will have no further obligation to pay Severance Pay or Severance
Benefits.

 

(vii)

Except as provided for in this Section 7(b), the Executive shall not have any
rights that have not previously accrued upon termination of this Agreement.

 

(c)

By Company for Cause.

 

If Executive's employment is terminated pursuant to Section 6(c):

 

 

(i)

Executive shall be entitled to receive the Base Salary and any benefits set
forth in Section 3 accrued but unpaid through the date of termination, and
Executive shall not be entitled to any other benefits (unless otherwise required
by law).

 

(ii)

Executive shall remain bound by the restrictive covenants and obligations
contained in Sections 8(d) and 8(e).

 

(d)

By Executive.

 

If Executive's employment is terminated pursuant to Section 6(e):

 

 

(iii)

Executive shall be entitled to receive the Base Salary and any benefits set
forth in Section 3 accrued but unpaid through the date of termination.

 

(iv)

Executive shall remain bound by the restrictive covenants and obligations
contained in Sections 8(d) and 8(e).

 

(v)

The Company shall pay the Executive one-half of his Base Salary less applicable
withholdings and deductions in installments over the period of six (6) months
subject to the conditions set forth in Section 7(b)(vi).

 

(vi)

The Executive shall be eligible for continuation of health benefits pursuant to
Section 3(c) (subject to compliance with the applicable plan provisions) at the
rate currently paid by the Executive at the time of termination until the
Executive obtains reasonably equivalent coverage or for six (6) months from the
date of termination, whichever is earlier; provided, however, that (A) such
benefit continuation coverage shall be considered part of the benefit
continuation coverage which the Executive is entitled to receive under COBRA,
and (B) the Executive timely elects COBRA coverage.

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(e)

Non-Renewal by the Company; Non-Renewal by the Executive.

 

If Executive's employment is terminated pursuant to Section 6(f) or 6(g):

 

 

(i)

Executive shall be entitled to receive the Base Salary and any benefits set
forth in Section 3 accrued but unpaid through the date of termination.

 

(ii)

Executive shall no longer be bound by the restrictive covenants and obligations
contained in Sections 8(d) and 8(e).

 

(f)

Six-Month Delay.  Notwithstanding any provisions of this Agreement to the
contrary, if the Executive is a “specified executive” (within the meaning of
Section 409A of the Code) at the time of the Executive’s “separation from
service” (within the meaning of Section 409A of the Code) and if any portion of
the payments or benefits to be received by the Executive upon the Executive's
separation from service would be considered deferred compensation under Section
409A of the Code, then each portion of such payments and benefits that would
otherwise be payable or provided shall instead be paid or made available on the
date following the six month anniversary of the Executive's separation from
service or, if earlier, the date of his death.

 

 

(g)

Excise Taxes

 

Notwithstanding any other provision of this Agreement, if any portion of the
payments and benefits provided under Section 7 of this Agreement, either alone
or together with other payments and benefits which the Executive receives or is
then entitled to receive from the Company, or any successor (in the aggregate,
“Total Payments”), would be subject to the excise tax imposed by section 4999 of
the Code, or any interest or penalties with respect to such excise tax (such
excise tax, together with any interest or penalties thereon, is herein referred
to as the “Excise Tax”), then, except as otherwise provided in the next
sentence, such Total Payments shall be reduced to the extent the Independent Tax
Counsel shall determine is necessary (but not below zero) so that no portion
thereof shall be subject to the Excise Tax.  If Independent Tax Counsel
determines that the Executive would receive in the aggregate greater payments
and benefits on an after tax basis if the Total Payments were not reduced
pursuant to this Section 7(d), then no such reduction shall be made.  For
purposes of determining the after tax benefit to the Executive, the Executive’s
estimated actual blended marginal rate of federal, state and local income
taxation in the calendar year in which the Termination Date occurs shall be
utilized.  Such marginal rate shall be determined by taking into account (A) the
estimated actual net effect on the marginal rate attributable to the deduction
of state and local income taxes, (B) the phase out, if any, of itemized
deductions, (C) the estimated actual net tax rate attributable to employment
taxes, and (D) any other tax provision that in the judgment of the Independent
Tax Counsel will actually affect the Executive’s estimated actual blended
marginal tax rate. The determination of which payments or benefits shall

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be reduced to avoid the Excise Tax shall be made by the Independent Tax Counsel,
provided that the Independent Tax Counsel shall reduce or eliminate, as the case
may be, payments or benefits in the order that it determines will produce the
required deduction in Total Payments with the least reduction in the after-tax
economic value to the Executive of such payments.  If the after-tax economic
value of any payments is equivalent, such payments shall be reduced in the
inverse order of when the payments would have been made to the Executive until
the reduction specified herein is achieved.  The Independent Tax Counsel shall
provide its determination, together with detailed supporting calculations and
documentation to the Company and the Executive within ten (10) days of the
Termination Date. The determination of the Independent Tax Counsel under this
Section 7(d) shall be final and binding on all parties hereto.  For purposes of
this Section 7(d), “Independent Tax Counsel” shall mean a lawyer, a certified
public accountant with a nationally recognized accounting firm, or a
compensation consultant with a nationally recognized actuarial and benefits
consulting firm with expertise in the area of executive compensation tax law,
who shall be selected by the Company and shall be acceptable to the Executive
(the Executive’s acceptance not to be unreasonably withheld), and whose fees and
disbursements shall be paid by the Company.

 

8.

Confidentiality and Covenants.

 

 

(a)

Definitions.  For the purposes of this Section 8, the following words have the
following meanings:

 

(i)

“Company Group” means, individually and collectively, (A) the Company; (B) any
entity within Argo Group for which the Executive performs duties pursuant to
this Agreement; and (C) any entity within Argo Group in relation to which the
Executive has, in the course of his employment, (1) acquired knowledge of Argo
Group’s trade secrets or Confidential Information (defined below), (2) had
material dealings with Argo Group’s Customers or Prospective Customers, or (3)
supervised directly or indirectly any employee having material dealings with
Argo Group’s Customers or Prospective Customers.

 

(ii)

“Company Services” means any services (including but not limited to technical
and product support, technical advice, underwriting and customer services)
supplied by Company Group.

 

(iii)

“Customer” means any Person to whom or which Company Group supplied Company
Services and with whom or which: (A) Executive had dealings pursuant to his
employment, or (B) any employee who was under the direct or indirect supervision
of the Executive had dealings pursuant to his or her employment, or
(C) Executive was responsible in a client management capacity on behalf of the
Company.

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(iv)

“Person” means any individual, firm, company, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company or other entity of any kind.

 

(v)

“Prospective Customer” means any Person with whom or which Company Group shall
have had negotiations or material discussions regarding the possible
distribution, sale or supply of Company Services and with whom or which: (A)
Executive shall have had dealings pursuant to his employment, or (B) any
employee who was under the direct or indirect supervision of Executive shall
have had dealings pursuant to his or her employment, or (C) Executive was
responsible in a client management capacity on behalf of the Company.

 

(vi)

“Restricted Area” means any geographic area in which Company Group provides
Restricted Services and in which Executive participates, directly or indirectly,
in the course of performing his duties for Argo Group during the 12 months
preceding the date of Executive’s termination of employment.

 

(vii)

“Restricted Employee” means any Person who, on the date of the termination of
Executive’s employment with the Company, was employed by Argo Group at the level
of director, manager, underwriter or salesperson and with whom the Executive had
material contact or dealings in the course of his employment;

 

(viii)

“Restricted Services” means Company Services or any services of the same or of a
similar kind.

 

(b)

Acknowledgement.

 

(i)

The Executive acknowledges that, during his employment, Argo Group will disclose
to Executive, or place Executive in a position to access or develop trade
secrets or Confidential Information (defined in Section 8(c)) belonging to Argo
Group; and/or will entrust the Executive with business opportunities of Argo
Group; and/or will place the Executive in a position to develop good will on
behalf of Argo Group.  The Executive acknowledges that the Confidential
Information, business opportunities and good will of Argo Group are of
competitive value and could be used to the competitive and financial detriment
of Argo Group if misused or disclosed by the Executive.  Argo Group will permit
Executive to have access to Confidential Information, business opportunities and
goodwill only in return for the Executive’s promises in Section 8 of this
Agreement.  The Executive therefore agrees that the obligations and restrictions
set out in Section 8 are reasonable and necessary to protect the legitimate
business interests of Argo Group, both during and after the termination of his
employment.

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(ii)

If, during the Executive’s employment, the Executive creates any work of
authorship fixed in any tangible medium of expression that is the subject matter
of copyright (such as video tapes, written presentations, or acquisitions,
computer programs, e-mail, voice mail, electronic data bases, drawings, maps,
architectural renditions, models, manuals, brochures or the like) relating to
Company Group’s business, products or services, whether such work is created
solely by the Executive or jointly with others (whether during business hours or
otherwise and whether on Argo Group’s premises or otherwise), Company Group
shall be deemed the author of such work if the work is prepared by the Executive
in the scope of the Executive’s employment.

 

(c)

Confidential Information.

 

(i)

Executive understands and agrees that all records, whether original, duplicated,
computerized, memorized, handwritten, or in any other form, and all information
contained therein, relating to the past, current or prospective business of Argo
Group, and/or relating to Customers and/or Prospective Customers, that provide
Argo Group with a competitive advantage and that are not known to the general
public are proprietary, confidential and constitute trade secrets, regardless of
whether such records or information were generated and/or obtained by Executive,
Argo Group, and/or a third party, including without limitation: (a) Customer and
Prospective Customer information such as contact information, account or policy
information, purchasing information, insurance and/or reinsurance needs,
underwriting, financial and pricing information; (b) any plans, formulas,
products, trade secrets, sales, marketing, merchandising or underwriting
information or strategies, product information, or confidential material or
information and instructions, technical or otherwise, issued or published for
the use of Argo Group; and (c) any information concerning the present or future
business, processes, or methods or manner of operation of Argo Group,
accomplishing the business undertaken by Argo Group, or concerning improvement,
inventions or know how relating to the same or any part thereof (collectively,
“Confidential Information”).  

 

(ii)

Executive acknowledges that, during his employment, Executive will occupy a
position of trust and confidence as regards Company Group and therefore agrees
that he shall treat as confidential and, except as expressly required in the
performance of Executive’s duties under this Agreement, shall not use for
Executive’s own benefit or disclose (or permit or cause the disclosure of) to
any Person, directly or indirectly, any Confidential Information unless such use
or disclosure has been specifically authorized in writing by Company Group in
advance.  It is the intent of Company Group, with which intent Executive hereby
agrees, to restrict Executive from disseminating or using for Executive’s own
benefit any information

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belonging directly or indirectly to Argo Group that is unpublished, not readily
available to the general public and that could be detrimental to Argo Group if
so used or disclosed.  

 

(iii)

Executive understands that Confidential Information is entrusted to Executive
solely due to Executive’s affiliation with Argo Group.  Confidential Information
is extremely valuable to Argo Group and Executive acknowledges, understands and
agrees Argo Group takes reasonable measures to maintain its confidentiality and
to guard its secrecy.  This information is developed and acquired by
expenditures of time, effort and money and provides Argo Group with a
competitive advantage.  Executive agrees that Confidential Information is the
property of Argo Group and is deserving of trade secret status and protection.

 

(iv)

Upon termination of Executive’s employment for any reason, Executive (or
Executive’s heirs or personal representatives) shall immediately deliver to the
Company: (i) all documents and materials containing Confidential Information
(including without limitation any copies, summaries or computerized or
electronic versions thereof); (ii) all documents and materials which otherwise
contain information relating to the business and affairs of Argo Group (whether
or not confidential); and (iii) all other documents, materials and other
property belonging to Argo Group that are in the possession or under the control
of Executive.  Executive shall permit Argo Group to inspect, prior to removal,
any and all materials to be taken from Argo Group’s offices and shall surrender
and provide to Argo Group any Argo Group-owned electronic device (including but
not limited to any computer, handheld device, mobile telephone or similar
device) used to conduct business while employed by Company for the purpose of
inspecting such device and removing all Confidential Information.

 

(v)

In the event that Executive becomes legally compelled to disclose any
Confidential Information, Executive shall provide the Company prompt notice
before such Confidential Information is disclosed so that the Company may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement.  Executive will exercise Executive’s best efforts
to assist the Company in obtaining such a protective order or other appropriate
remedy.  In the event that such protective order or other remedy is not
obtained, Executive will furnish only that portion of the Confidential
Information which Executive is advised by written reasonable opinion of counsel
is legally required.  

 

(vi)

All information, ideas, concepts, improvements, discoveries, and inventions,
whether patentable or not, that are conceived, made, developed or acquired by
Executive, individually or in conjunction with others, during Executive’s
employment with the Company (whether during

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business hours or otherwise and whether on the premises of Argo Group or
otherwise) that relate to the business, products or services of Company Group
shall be disclosed to the Board and are and shall be the sole and exclusive
property of Company Group.  Moreover, all documents, drawings, memoranda, notes,
records, files, correspondence, manuals, models, specifications, computer
programs, e-mail, voice mail, electronic data bases, maps and all other writings
and materials of any type embodying any such information, ideas, concepts,
improvements, discoveries and inventions are and shall be the sole and exclusive
property of Company Group.  Upon termination of Executive’s employment for any
reason, Executive promptly shall deliver the same, and all copies thereof, to
Company Group.

 

(d)

Restrictive Covenant.  Other than for or on behalf of Argo Group, Executive
agrees that Executive shall not (whether by Executive, through Executive’s
employers or employees or agents or otherwise, and whether on Executive’s own
behalf or on behalf of any other person, firm, company or other organization)
during Executive’s employment with the Company and for the period of 12 months
after Executive ceases to be employed by the Company, directly or indirectly:

 

(i)

contact or solicit any Customer or Prospective Customer with respect to
Restricted Services, or endeavor to entice away from Company Group any Customer
or Prospective Customer;

 

(ii)

accept orders or facilitate the acceptance of any orders, or have any business
dealings for, Restricted Services from any Customer or Prospective Customer;

 

(iii)

contact, solicit or induce, or endeavor to solicit or induce any Restricted
Employee to cease working for or providing services to Argo Group, or hire any
Restricted Employee;

 

(iv)

employ or otherwise engage for the purpose of researching into, developing,
distributing, selling, supplying or otherwise dealing with Restricted Services,
any Person who is or was employed or engaged by Company Group and who, by reason
of such employment or engagement, is reasonably likely to be in possession of
any Argo Group trade secrets or Confidential Information.

 

(e)

Non-Competition Requirement(s).  Executive agrees that, during Executive’s
employment with the Company, other than for or on behalf of Argo Group,
Executive shall not (whether by himself, through his employers or employees or
agents or otherwise, and whether on his own behalf or on behalf of any other
Person), directly or indirectly, own, manage, operate, control, make loans or
advances to, be employed by, act as an officer, director, agent or consultant
for, or

13

 

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be in any other way connected with or provide services to or for, any Person:
(a) engaged in the property and/or casualty insurance and/or reinsurance
business; and/or (b) that offers products or services competitive with the
products or services offered by Argo Group, or that otherwise competes with Argo
Group (“Non-Competition Requirement”).

Executive further agrees that he shall not (whether by himself, through his
employers or employees or agents or otherwise, and whether on his own behalf or
on behalf of any other Person), directly or indirectly, for a period of 6 months
after Executive ceases to be employed by the Company, own, manage, operate,
control, make loans or advances to, be employed by, act as an officer, director,
agent or consultant for, or be in any other way connected with or provide
services to or for, any Person in the business of researching, developing,
underwriting, distributing, selling, supplying, or otherwise dealing with
Restricted Services in the Restricted Area (“Post-Employment Non-Competition
Requirement”).  Notwithstanding the foregoing, the parties agree it shall not be
a violation of this Section 8(e) in the event that Executive holds less than 2%
of the outstanding voting shares of any publicly held company.

 

(f)

Executive agrees that during the 12 months following the date of termination of
his employment, Executive shall inform the Company, prior to the acceptance of
any job or any work as an independent contractor, of the identity of any new
employer or other entity to which Executive plans to provide consulting or other
services, along with Executive’s starting date, title, job description and any
other information which the Company may reasonably request to confirm
Executive’s compliance with the terms of this Agreement.

 

(g)

This Section 8 shall be for the benefit of Argo Group and the Company reserves
the right to assign the benefit of such provisions to any entity within Argo
Group.  The obligations undertaken by the Executive pursuant to this Section 8
shall, with respect to each entity within Company Group, constitute separate and
distinct obligations and covenants and the invalidity or unenforceability of any
such obligation or covenant shall not affect the validity or enforceability of
the obligations or covenants in favor of any other entity within Company
Group.  

 

(h)

Section 8 shall survive the termination of the Executive’s employment with the
Company and the termination or expiration of this Agreement for any reason.  

 

(i)

While the restrictions and obligations in Section 8 (on which the Executive has
had the opportunity to take independent advice, as the Executive hereby
acknowledges) are considered by the parties to be reasonable in all
circumstances, if any portion(s) of Section 8 shall be adjudged to be illegal,
void, unenforceable, overly broad (including as to time, scope or geography) or
otherwise beyond what is reasonable in all the circumstances for the protection
of the legitimate interests of Argo Group, any such portion(s) of Section 8
shall be reformed to ensure the enforceability of Section 8 to the fullest
extent possible or if reformation of such

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portion(s) is deemed impossible then such portions of Section 8 shall be severed
from this Agreement, but the remainder of Section 8 of this Agreement shall
remain in full force and effect.

9.

Remedies for Breach. In addition to the rights and remedies otherwise provided
in this Agreement, and without waiving the same, if Executive breaches, or
threatens to breach, any of the provisions of Section 8, Executive agrees that
the Company shall have the following rights and remedies, in addition to any
others, each of which shall be independent of the other and severally
enforceable:

 

 

(a)

The right and remedy to have such provisions specifically enforced by a court
and/or arbitrator(s) having equitable jurisdiction.  Executive specifically
acknowledges and agrees that any breach or threatened breach of the provisions
of Section 8 hereof will cause substantial irreparable injury to Argo Group and
that money damages will not provide an adequate remedy to Argo Group, and that
Argo Group will be entitled to appropriate equitable relief, including but not
limited to a temporary restraining order or temporary or permanent injunctive
relief.  Such equitable relief shall be available without posting of any bond or
other security.

 

 

(b)

The right to require Executive to account for and pay over to Company all
compensation, profits, monies, accruals, increments or other benefits
(hereinafter collectively the “Benefits”) derived or received by the Executive
as a result of any conduct, activities, transactions and/or other provision of
services constituting a breach of any of the provisions of Section 8.

 

 

 

(c)

Upon discovery by Company of a breach or threatened breach of Section 8, the
right to immediately suspend any payments or benefits to Executive under
Sections 3, 7 or 8 pending a resolution of the dispute.

 

 

(d)

The right to terminate Executive's employment for Cause pursuant to Section
6(c).

 

 

(e)

If Executive is determined to have breached any provisions of Section 8, the
court or arbitrator shall extend the effect of those provisions of the Section
for an amount of time equal to the time Executive was in breach thereof.

 

10.

Change of Control

 

 

(i)

For purposes of this Agreement, a “Change of Control” shall be deemed to occur
if:

 

(i)

Any Person, other than (1) the Company or any of its subsidiaries, (2) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any of its Affiliates, (3) an underwriter temporarily holding
securities pursuant to an offering of such securities, or

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(4) a corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of stock of the
Company, is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such person any securities acquired directly from the Company or its Affiliates)
representing 50% or more of the combined voting power of the Company’s then
outstanding securities, or 50% or more of the then outstanding common stock of
the Company, excluding any Person who becomes such a Beneficial Owner in
connection with a merger or consolidation of the Company described in (ii)
below.

 

(ii)

There is consummated a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, except if: (A)
the merger or consolidation would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least fifty percent (50%) of the
combined voting power of the voting securities of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger or
consolidation; or (B) the merger or consolidation is effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the beneficial owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Affiliates other than in
connection with the acquisition by the Company or its Affiliates of a business)
representing 50% or more of the combined voting power of the Company’s then
outstanding securities;

 

(iii)

The shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company’s assets, other than a sale or
disposition by the Company of all or substantially all of the Company’s assets
to an entity, at least 50% of the combined voting power of the voting securities
of which are owned by the stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to such sale.

 

(iv)

During any two-year period, individuals who at the beginning of the period
constitute the Board of Directors of the Company cease for any reason to
constitute a majority of the Board of Directors.

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(j)

For purposes of this Section 10:

 

(i)

The term “Person” shall have the meaning given in Section 3(a)(9) of the 1934
Act as modified and used in Sections 13(d) and 14(d) of the 1934 Act.

 

(ii)

The term “Beneficial Owner” shall have the meaning provided in Rule 13d-3 under
the 1934 Act.

 

(iii)

The term “Affiliate” means, with respect to any individual or a corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind (each a “person”),
any other person that directly or indirectly controls or is controlled by or
under common control with such person.  For the purposes of this definition,
“control” when used with respect to any person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities, by
contract or otherwise; and the terms of “affiliated”, “controlling” and
“controlled” have meanings correlated to the foregoing.

11.

Successors and Assigns.  This Agreement is personal in its nature and Executive
cannot assign it without Company’s written consent.  Company may assign this
Agreement to any successor in interest and/or to Argo Group.

 

12.

Notices.  Any notice required or permitted to be given to Executive pursuant to
this Agreement shall be sufficiently given if sent to Executive by registered or
certified mail addressed to Executive at Executive’s home address as reflected
in the Company's records at the time of such notice, or at such other address as
Executive shall designate by written notice to the Company, and any notice
required or permitted to be given to the Company pursuant to this Agreement
shall be sufficiently given if sent to the Company by registered or certified
mail addressed to it at 175 E. Houston Street, Suite 1300, San Antonio, Texas
78205, or at such other address as it shall designate by notice to Executive.

 

13.

Invalid Provisions.  The invalidity or unenforceability of a particular
provision of this Agreement shall not affect the enforceability of any other
provisions hereof and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted.

 

14.

Amendment.  This Agreement may only be amended in writing by an agreement
executed by both parties hereto.

 

 

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15.

Entire Agreement.  This Agreement contains the entire agreement of the parties
regarding the subject matter contained herein and supersedes any and all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, as well as the negotiations between said
parties.  

 

16.

Arbitration.

 

(a)

Any claim or controversy arising between Executive and the Company and/or Argo
Group, shall be settled by final and binding arbitration in New York, New
York.  

 

(b)

Disputes that must be arbitrated under this Agreement shall include all
statutory, contractual, and common law claims and controversies between
Executive and Argo Group including, without limitation, controversies concerning
the construction, performance or breach of this Agreement or any other agreement
between the Company and Executive, whether entered into prior, on or subsequent
to the date hereof, claims arising out of or relating to Executive’s hiring,
employment, or termination of employment, and claims of workplace
discrimination, harassment and retaliation.  Workers’ compensation claims
(except any claim asserted pursuant to Tex. Labor Code §451 or any successor
provision), claims for unemployment benefits and claims based upon any Company’s
benefit plans containing a different final and binding dispute procedure are
excluded from arbitration.

 

(c)

This Section 16 and any arbitration hereunder are subject to and controlled by
the Federal Arbitration Act, 9 U.S.C. §1, et seq. (“FAA”).  Notwithstanding the
foregoing, the parties agree that all questions of arbitrability will be
submitted to the arbitrator.  Additionally, in the event that the FAA is deemed
not to apply, the parties agree that any review of the arbitration award shall
be strictly limited to the bases provided for under the FAA.  

 

(d)

Submission to arbitration pursuant to this Section 16 may be compelled by any
court located in New York, New York.  The parties agree to submit to exclusive
jurisdiction and venue in the courts in the state and county of New York for
purpose of this Subsection 16(d).  

 

(e)

Any party may, without waiving any other rights and remedies under this
Agreement, apply to any court located in  the state and county of New York, to
seek any interim or preliminary injunctive relief that is necessary to protect
the rights or property of that party, pending the arbitrator’s award or
resolution of the controversy.  The parties agree to submit to exclusive
jurisdiction and venue in the courts in  the state and county of New York for
purpose of this Subsection 16(e).  

 

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(f)

The arbitration proceedings under this Section 16 shall be before a panel of
three arbitrators and conducted in accordance with the American Arbitration
Association’s (AAA) National Rules for the Resolution of Employment Disputes in
effect at the time the demand for arbitration is made, which are incorporated
herein and are available through the AAA’s website (http://www.adr.org) or the
Company’s Human Resource Department, except to the extent they conflict with the
specific provisions of this Agreement.  

 

 

(g)

The arbitrator may award reasonable attorneys’ fees to the prevailing party if
such an award would be permitted under the law governing the claim(s)
involved.  

 

(h)

The arbitration award may be specifically enforced by any party in any court of
competent jurisdiction.

 

(i)

The parties acknowledge, understand and agree that:

 

(i)

Each party has had the opportunity to consult with legal counsel regarding this
Section 16;

 

(ii)

By agreeing to arbitrate, the parties give up their rights to sue each other in
a court of law and to have a trial by jury;

 

(iii)

Arbitration awards are final and binding and a parties’ ability to have a court
reverse or modify an arbitration award is very limited, as envisioned by and
provided for in the FAA;

 

(iv)

The ability of the parties to conduct discovery (e.g., the ability of the
parties to obtain documents, interrogatory answers and witness statements) is
within the discretion of the arbitrator and may be more limited than and
different from discovery in court proceedings;

 

(v)

The arbitrator’s award is not required to include factual findings or legal
reasoning or otherwise explain the bases for the award;

 

(vi)

The time limits for bringing a claim and other proceedings in arbitration may be
different from the time limits imposed by courts;

 

(vii)

Each party may be represented by an attorney during the arbitration
proceedings;  

 

(viii)

Executive is still protected by all applicable employment laws, and does not
give up any substantive rights to recover damages; and

 

(ix)

This Section 16 survives the termination of Executive’s employment and the
termination or expiration of this Agreement for any reason.

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17.

Applicable Law. This Agreement is entered into under, and shall be governed for
all purposes, by the laws of the State of New York, without regard to its
conflicts of law principles.

 

18.

Jurisdiction and Venue.  The parties agree that any dispute between the parties
that is determined to be not subject to arbitration pursuant to Section 15 shall
be subject to exclusive jurisdiction and venue in the Southern District of New
York.  

 

19.

No Waiver. Company’s or Executive’s failure at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall not be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

 

20.

Severability. If any provision of this Agreement is adjudged to be invalid or
unenforceable, then the invalidity or unenforceability of that provision shall
not affect the validity or unenforceability of any other provision of this
Agreement, and the provision shall be reformed to the fullest extent possible or
if reformation of such provision is deemed impossible such provision shall be
severed from this Agreement, but the remainder of this Agreement shall remain in
full force and effect.

 

21.

Section 409A Compliance. This Agreement is intended to meet the requirements of
Section 409A, and shall be interpreted and construed consistent with that
intent.

 

22.

Withholding of Taxes and Other Executive Deductions. Company may withhold from
any benefits and payments made pursuant to this Agreement all federal, state,
city and other taxes as may be required pursuant to any law or governmental
regulation or ruling and any and all other normal Executive deductions made with
respect to the Company’s Executives generally.

 

23.

Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one in the same agreement.

 

 

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EXECUTIVE UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT, IN ACCORDANCE WITH SECTION
16, THIS AGREEMENT IS SUBJECT TO MANDATORY ARBITRATION AND THAT EXECUTIVE IS
AGREEING IN ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH ARISE WITH ARGO GROUP
IN ACCORDANCE WITH THE TERMS OUTLINED THEREIN.

 

In witness whereof, the parties hereto have executed this Agreement as of the
day and year written above.

 

COMPANY

 

 

EXECUTIVE:

 

 

 

 

By:

/s/ Mark E. Watson

 

 

/s/ Jose Hernandez

 

Mark E. Watson III

 

 

Jose Hernandez

Title:

Chief Executive Officer

 

 

 

 

Argo Group International Holdings, Ltd,

 

 

 

 

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EXHIBIT A

GENERAL RELEASE

 

Argo Group International Holdings, Ltd. (“Company”) and I, Jose Hernandez, agree
as follows:

 

I.  Complete Release

 

A.

In General: Pursuant to the requirements of Section 7 of my Executive Employment
Agreement with the Company dated October 1, 2016 (the “Executive Employment
Agreement”), and as consideration for the termination benefits contained
therein, I hereby agree to irrevocably and unconditionally release any and all
Claims I may now have against the Company and other parties as set forth in this
Section I.

 

B.

Released Parties:  The Released Parties are the “Argo Group” entities, as
defined in the Executive Employment Agreement, which include the Company and all
of its subsidiary holding and operating companies , and, with respect to each of
them, their predecessors and successors; and, with respect to each such entity,
all of its past, present and future employees, officers, directors,
stockholders, owners, representatives, assigns, attorneys, agents, insurers,
employee benefit programs (and the trustees, administrators, fiduciaries, and
insurers of such programs); and any other persons acting by, through, under or
in concert with any of the persons or entities listed in this subsection (the
“Released Parties” and each a “Released Party”).

 

C.

Claims Released:  I understand and agree that I am releasing all known and
unknown claims, demands, promises, causes of action and rights of any type that
I may have had or currently have (the “Claims”) against each and every Released
Party based on, relating to, or arising out of any fact, act, omission, event,
conduct, representation, agreement or other matter whatsoever, except that I am
not releasing any claim to enforce:  (i) this Agreement; (ii) any right, if any,
to claim government-provided unemployment benefits; or (iii) any rights or
claims that wholly arise or accrue after I sign this Agreement.  I further
understand that the Claims I am releasing may arise under many different laws
(including statutes, regulations, other administrative guidance and common law
doctrines) including but by no means limited to:

 

 

1.

Anti-discrimination statutes, such as the Age Discrimination in Employment Act
(“ADEA”), the Older Workers Benefit Protection Act (“OWBPA”), and Executive
Order 11141, which prohibit age discrimination in employment; Title VII of the
Civil Rights Act of 1964, Section 1981 of the Civil Rights Act of 1866, and
Executive Order 11246, which prohibit discrimination based on race, color,
national origin, religion, or sex; the Equal Pay Act, which prohibits paying men
and women unequal pay for equal work; the Americans With Disabilities Act and
Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit
discrimination based on disability; and any other federal, state or local laws
prohibiting employment or wage discrimination.

 

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2.

Federal employment statutes, such as the WARN Act, which requires that advance
notice be given of certain work force reductions; the Employee Retirement Income
Security Act of 1974, which, among other things, protects employee benefits; the
Fair Labor Standards Act of 1938 and laws which regulate wage and hour matters;
the Family and Medical Leave Act of 1993, which requires employers to provide
leaves of absence under certain circumstances; and any other federal laws
relating to employment, such as veterans’ reemployment rights laws.

 

 

3.

Other laws, such as any federal, state or local laws providing workers’
compensation benefits (or prohibiting workers’ compensation retaliation),
restricting an employer’s right to terminate employees or otherwise regulating
employment; any federal, state or local law enforcing express or implied
employment contracts or requiring an employer to deal with employees fairly or
in good faith.

 

 

4.

Tort and contract claims, such as claims for wrongful discharge, negligence,
negligent hiring, negligent supervision, negligent retention, physical or
personal injury, emotional distress, fraud, fraud in the inducement, negligent
misrepresentation, defamation, invasion of privacy, interference with contract
or with prospective economic advantage, breach of express or implied contract,
breach of covenants of good faith and fair dealing, promissory estoppel, and
similar or related claims.

 

 

5.

Examples of released Claims include, but are not limited to:  (i) Claims that in
any way relate to my employment with the Company or any other Released Party, or
the termination of that employment, such as Claims for compensation, bonuses,
commissions, lost wages or unused accrued vacation or sick pay; (ii) Claims that
in any way relate to the design or administration of any employee benefit
program; (iii) Claims that I have irrevocable or vested rights to severance or
similar benefits or to post-employment health or group insurance benefits; or
(iv) any Claims to attorneys’ fees or other indemnities.

 

D.

Unknown Claims:  I understand that I am releasing Claims about which I may be
unaware.  That is my knowing and voluntary intent, even though I recognize that
someday I might learn that some or all of the facts I currently believe to be
true are untrue or learn of facts or other matters about which I now am unaware,
and even though I might then regret having signed this Release.  Nevertheless, I
am assuming that risk and I agree that this Agreement shall remain effective in
all respects in any such case.  I expressly waive all rights I might have under
any law that is intended to protect me from waiving unknown claims.  I
understand the significance of doing so.  

 

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II. Promises, Warranties, And Representations

 

A.

Employment Termination:  I understand and agree that my employment with the
Company terminated on ____________________.  I also understand and agree that I
have no right of rehire or reinstatement with any Released Party, regardless of
location, and that each and every Released Party is under no obligation to
rehire or reinstate me.  I also acknowledge and understand that the failure of a
Released Party to rehire or reinstate me is contractual and is in no way
discriminatory or retaliatory in nature.

 

B.

Pursuit of Released Claims:  I affirm that I have not filed, have not caused to
be filed, and am not presently party to, any actions, grievances, arbitrations,
complaints, claims or other legal proceedings against or relating to any
Released Party in any forum.  To the extent permitted by law, I agree not to,
directly or indirectly, file, initiate, encourage, aid or assist in any
investigations, actions, grievances, arbitrations, complaints, claims or other
legal proceedings against or relating to any Released Party.  Notwithstanding
the foregoing, I understand that nothing in this General Release prohibits me
from: (i) challenging the knowing and voluntary nature of the release of ADEA
claims pursuant to the OWBPA; or (ii) making or asserting: (A) any claim or
right which cannot be waived under applicable law, including but not limited to
the right to file a charge with, provide information to or participate in an
investigation or proceeding conducted by the Texas Workforce Commission Civil
Rights Division, the Equal Employment Opportunity Commission or other federal,
local or state governmental agency charged with enforcing anti-discrimination
laws, or the National Labor Relations Board; (B) any right I have to any
payments pursuant to Section 7(b) of the Executive Employment Agreement; (C) any
right I have to accrued benefits (within the meaning of Sections 203 and 204 of
the Employee Retirement Income Securities Act of 1974, as amended); and (D) any
rights I have or claims that may arise after the date this General Release is
executed.  I further agree and covenant that should any person, entity,
organization, federal, state or local governmental agency institute an
investigation, action, grievance, arbitration, complaint, claim or other legal
proceeding involving any matter encompassed by the release set forth in Section
1, I shall not be entitled to recover and expressly waive any right to seek,
accept or recover any monetary relief or other individual remedies.

 

C.

Execution of this Agreement:  I understand and agree that, but for my execution
of this General Release and the fulfillment of the promises contained therein, I
would not be entitled to receive the benefit continuation coverage described in
Section 7(a)(iii) of the Executive Employment Agreement or severance pay
described in Section 7(b) of the Executive Employment Agreement.  

 

D.

Company Property:  Before accepting any monetary payments from the Company, I
promise to comply with my obligation under Sections 8(c)(iv) and 8(c)(vi) of the
Executive Employment Agreement.

 

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E.

Taxes:  I am responsible for paying any taxes on amounts I receive because I
signed this Release.  I agree that the Company may withhold all taxes it
determines it is legally required to withhold.

 

F.

Ownership of Claims:  I have not assigned or transferred any Claim I am
releasing, nor have I purported to do so.  In addition to any other remedies,
rights or defenses that may be available to the Released Parties by virtue of
this General Release or my breach hereof, I will pay the reasonable attorneys’
fees, costs, expenses and any damages the Released Parties incur as a result of
my breach of this representation or if this representation was false when
made.  

 

G.

Implementation:  I agree to sign any documents and do anything else that is
necessary in the future to implement this Agreement.

 

III. Miscellaneous

 

A.

Entire Agreement:  This is the entire agreement between me and the Company with
respect to my release of Claims against the Company.  This Agreement may not be
modified or canceled in any manner except by a writing signed by both me and an
authorized Company official.  I acknowledge that I have not relied on any
representations, promises, or agreements of any kind made to me in connection
with my decision to accept this General Release, except for those set forth in
this General Release and my Executive Employment Agreement.

 

B.

Successors:  This Agreement binds and inures to the benefit of the parties’
heirs, administrators, representatives, executors, successors and assigns, and
will inure to the benefit of all Released Parties and their respective heirs,
administrators, representatives, executors, successors and assigns.

 

C.

Interpretation:  This Agreement shall be construed as a whole according to its
fair meaning.  It shall not be construed strictly for or against me or any
Released Party.  Unless the context indicates otherwise, the singular or plural
number shall be deemed to include the other.  Captions are intended solely for
convenience of reference and shall not be used in the interpretation of this
Release.  

 

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D.

Governing Law, Mandatory Arbitration and Venue:  This Agreement is entered into
under, and shall be governed for all purposes, by the laws of the State of New
York, without regard to its conflicts of law principles.  Any claim or
controversy arising between Executive and the Company and/or Argo Group, shall
be settled by final and binding arbitration in New York, New York pursuant to
Section 16 of the Executive Employment Agreement, which is incorporated by
reference herein.  I acknowledge and agree that I have read Section 16 of the
Executive Employment Agreement and understand that it contains a mandatory
arbitration provision and that I am agreeing in advance to arbitrate any
controversies which arise in connection with this General Release and my
Executive Employment Agreement.  I agree that any dispute between the parties
that is determined to be not subject to arbitration pursuant to Section 16 shall
be subject to exclusive jurisdiction and venue in the Southern District of New
York.  

 

IV.  Notice, Time for Consideration and Revocation Period

 

A.

THE GENERAL RELEASE OF CLAIMS CONTAINED IN THIS AGREEMENT CONSTITUTES A RELEASE
OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING WITHOUT LIMITATION, ALL CLAIMS FOR
AGE DISCRIMINATION UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT AND ANY
SIMILAR STATE LAWS.  THIS GENERAL RELEASE DOES NOT WAIVE RIGHTS OR CLAIMS THAT
MAY ARISE AFTER THE DATE IT IS EXECUTED;

 

B.

I AGREE THAT I AM WAIVING RIGHTS AND CLAIMS I MAY HAVE IN EXCHANGE FOR
CONSIDERATION WHICH IS IN ADDITION TO THINGS OF VALUE TO WHICH I MAY ALREADY BE
ENTITLED;

 

C.

I UNDERSTAND AND AGREE THAT I HAVE BEEN ADVISED THAT I HAVE THE RIGHT TO CONSULT
WITH AN ATTORNEY OF MY CHOOSING PRIOR TO EXECUTING THIS GENERAL RELEASE;

 

D.

IF TERMINATED AS PART OF A TERMINATION OR EXIT INCENTIVE PROGRAM OFFERED TO A
GROUP OR CLASS OF EMPLOYEES, I ACKNOWLEDGE i) THAT I HAVE AT LEAST FORTY-FIVE
(45) DAYS WITHIN WHICH TO CONSIDER THIS GENERAL RELEASE BEFORE EXECUTING IT; AND
ii) THAT I HAVE RECEIVED WRITTEN NOTICE FROM THE COMPANY WHICH INFORMS ME OF THE
i) CLASS, UNIT, OR GROUP OF INDIVIDUALS COVERED BY THE PROGRAM, ii) ANY
ELIGIBILITY FACTORS FOR SUCH PROGRAM, iii) ANY TIME LIMITS APPLICABLE TO SUCH
PROGRAM, AND iv) THE JOB TITLES AND AGES OF ALL INDIVIDUALS THAT ARE AND ARE NOT
ELIGIBLE OR SELECTED FOR THE PROGRAM.

 

E.

I UNDERSTAND THAT IN THE EVENT THAT I AM FORTY (40) YEARS OF AGE OR OLDER AT THE
TIME OF TERMINATION, I WILL HAVE AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO
CONSIDER THIS GENERAL RELEASE BEFORE EXECUTING IT; AND

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F.

I UNDERSTAND THAT SHOULD THE PROVISIONS OF (D) AND (E) ABOVE NOT OTHERWISE
APPLY, I HAVE SEVEN (7) DAYS FOLLOWING MY EXECUTION OF THIS GENERAL RELEASE TO
REVOKE IT BY DELIVERING WRITTEN NOTICE OF SUCH REVOCATION TO THE COMPANY AND
THAT THE GENERAL RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE  REVOCATION PERIOD HAS EXPIRED.

 

Executed on this __________ day of _________________, 20___.

 

Jose Hernandez

 

Executed on this __________ day of _________________, 20___.

 

ARGO GROUP INTERNATIONAL HOLDINGS, LTD.

 

By:

 

 

 

Title:

 

 

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