Exhibit 10.1

Bristol West Holdings, Inc.

Dated as of    
May 25, 2006

James R. Fisher
c/o Fisher Capital Corp. LLC
8 Clarke Drive
Cranbury, New Jersey 08512

Dear Jim:

          On behalf of Bristol West Holdings, Inc. (the “Company”), I am pleased
to confirm your continued employment as the Executive Chairman of the Company,
effective July 1, 2006, on the terms and conditions set forth in this letter
agreement. Your employment agreement dated as of January 1, 2004 shall not be
renewed and your employment as Chief Executive Officer shall terminate effective
June 30, 2006.  In your capacity as Executive Chairman, you shall have such
duties, responsibilities and authorities as the board of directors of the
Company (the “Board”) shall determine are appropriate for your position, and you
shall devote your reasonable business time to such duties, responsibilities and
authorities. Such duties, responsibilities and authorities shall include,
without limitation, preparing for and conducting Board meetings, communicating
with Board members between meetings and consulting with the Chief Executive
Officer and other senior executive officers on strategic and operational issues.

          With respect to compensation for your services as the Executive
Chairman of the Company, subject to your continued employment with the Company,
you will receive the following compensation, from which the Company shall be
entitled to withhold any amounts required by applicable law:

 

i)     Beginning on July 1, 2006, the Company shall pay you a base salary (“Base
Salary”) at the rate of $350,000 per annum. Your Base Salary shall be payable
quarterly in arrears within ten (10) business days after the end of each such
quarter.  Your Base Salary may be changed at the sole discretion of the
Compensation Committee of the Board (or, if necessary, such other committee that
satisfies the requirements of Section 162(m) of the Internal Revenue Code and
the regulations thereunder) (the “Committee”), but in no event shall your Base
Salary be changed to a level below $350,000 per annum.

 

 

 

(ii)   You will be eligible to earn an annual bonus award  in such amounts, if
any, as may be awarded by the Committee in its sole discretion in accordance
with the Company’s annual incentive plans.

 

 

 

(iii)   You will be eligible to receive grants of long-term restricted stock
awards in such

 

amounts, if any, that the Committee may choose to award in its sole discretion.

          Subject to the terms and conditions set forth in this letter
agreement, the term of your employment with the Company hereunder shall begin on
July 1, 2006 and shall end on June 30, 2007 (the “Initial Term”); provided,
however, that commencing on June 30, 2007 and on each June 30 thereafter, the
term of your employment hereunder shall be automatically extended for an
additional one-year period (each such period, an “Extended Term”). 
Notwithstanding the foregoing, your employment hereunder will terminate upon the
earliest to occur of: (i) the expiration of the Initial Term or any Extended
Term, as applicable, in the event that you or the Company provides the other
party with written notice of nonrenewal of such term no later than ninety (90)
days prior to the commencement of any Extended Term; (ii) termination of your
employment by the Company with or without Cause (as defined below) at any time
following written notice to you thereof; or (iii) termination of your employment
by you for any reason following ninety (90) days advance written notice to the
Company thereof (except in the case of your death or permanent disability (as
defined below)).

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          If, during the Initial Term or any Extended Term, your employment is
terminated for any reason by you or by the Company as provided above (including
upon the nonrenewal of the term of your employment hereunder by either party),
you will be entitled to receive such payments (including any accrued but unpaid
Base Salary) as to which you may be entitled (or may have accrued) as of the
date of termination. Also in the event of any termination of your employment,
any Company Stock or options to purchase Company Stock that you hold, directly
or indirectly, will be governed by the terms of the applicable agreements under
which you hold such Company Stock and/or options. 

          In addition to the foregoing, if, during the Initial Term or any
Extended Term, your employment is terminated (i) by the Company without Cause as
provided above (which in no event shall include the nonrenewal of the term of
your employment hereunder by the Company or any termination due to your death or
permanent disability) or (ii) by you for any reason as a result of an Associates
Sale (as defined below), following thirty (30) days advance written notice of
such termination delivered to the Company not earlier than the date the
Associates Sale occurs, subject to your continued compliance with the
confidentiality and nondisparagement covenants contained herein (as described
below), for the remainder of the Initial Term or the Extended Term, as
applicable (in either case without any extensions thereof) the Company shall
provide you with continued payment to you of your then Base Salary, payable as
set forth above. These severance payments are in lieu of any other severance
payments or benefits to which you may be entitled under any other Company
severance plan or policy.  For purposes of this paragraph, “Associates Sale”
shall mean the sale or other disposition (either in one transaction or in a
series of transactions) of all of the shares of common stock in the Company
(“Company Stock”) that Bristol West Associates LLC (“Associates”) owns, directly
or indirectly.

          For purposes of this letter agreement, (i) “Cause” shall mean (A) your
willful and continued failure to perform your material duties with respect to
the Company or its subsidiaries which continues beyond 10 days after a written
demand for substantial performance is delivered to you by the Company, (B) your
willful misconduct involving dishonesty or breach of trust in connection with
your employment which results in a demonstrable injury (which is other than de
minimis or insignificant) to the Company, (C) conviction for any felony or
misdemeanor involving moral turpitude, or (D) any material breach of your
covenant not to disclose Confidential Information or not to disparage the
Company and its Beneficiaries, as provided below and (ii) “permanent disability”
shall mean you are unable to engage in the activities required by your job by
reason of any medically determined physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.

          Upon any termination of your employment with the Company, you agree to
resign, as of the date of such termination and to the extent applicable, from
any board of directors or committees of the Company or its affiliates on which
you serve and any board, committees or other organizations on which you serve in
a representative capacity of the Company or its affiliates.

          As a condition of your employment, you agree that you shall not at any
time during or after your employment with the Company disclose any Confidential
Information (as hereinafter defined) pertaining to the business of the Company
or any of its subsidiaries, except (i) when required by applicable law or (ii)
in connection with any strategic transaction involving the Company and only
after receipt of authorization from the Board to disclose such Confidential
Information.  For the purposes of this letter agreement, “Confidential
Information” shall mean all non-public information concerning the financial
data, strategic business plans, and other non-public, proprietary and
confidential information of the Company, its subsidiaries, Associates, and their
affiliates as in existence as of the date of your termination of employment. You
also hereby agree not to issue any press release or otherwise make any private
or public statement (whether oral, in writing or in any other form), directly or
through any person or entity, which is derogatory, disparaging or damaging to,
which alleges improper conduct by, or which is reasonably likely to result in or
could reasonably be determined to be intended to cause damage or embarrassment
to, the Company, its successors, subsidiaries, affiliates, officers, directors,
employees, shareholders, representatives, agents, servants and assigns, or
anyone acting on their behalf (the “Beneficiaries”), other than any such
statement that may be required by applicable law.

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          During the term of your employment with the Company and for 12 months
thereafter, you agree that you shall not, without the Board’s written consent,
directly or indirectly (i) be engaged in any business that is principally
engaged, within the states in which the Company conducts business and all states
contiguous thereto, in the principal business of the Company and its
subsidiaries at the relevant time or (ii) solicit or offer employment to any
person who has been employed by the Company or any of its subsidiaries at any
time during the 12 months immediately preceding such solicitation.
Notwithstanding anything herein to the contrary: (1) you shall be permitted to
provide services, directly or indirectly, to Kohlberg Kravis Roberts & Co., L.P.
or any affiliate thereof , to be paid for such services, and to continue to
manage and direct your personal investments without limitation thereof; and (2)
you may engage in certain investment and advisory activities related to your
position with Fisher Capital Corp. LLC, which activities are not connected with
your employment with the Company and for which you may receive compensation from
sources that are not affiliated with the Company.

          All notices or communications hereunder shall be in writing,
addressed: (i) to the Company at its principal corporate headquarters, to the
attention of the Board, and (ii) to you at the most recent residential address
contained within the personnel records of the Company (or to such other address
as such party may designate in a notice duly delivered as described below).  Any
such notice or communication shall be delivered by telecopy, by hand, by courier
or sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above, and in the case of delivery other than by hand, the third
business day after the actual date of mailing shall constitute the time at which
notice was given.

          Any controversy or claim arising out of or relating to this letter
agreement or the breach of this letter agreement that cannot be resolved by you
and the Company, including any dispute as to the calculation of any payments
hereunder, and the terms of this letter agreement, shall be exclusively resolved
by way of confidential arbitration in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association, which
arbitration shall take place in New York, New York.  This letter agreement shall
be construed, interpreted and governed in accordance with the laws of New York. 

          This letter agreement contains the entire understanding of the parties
with respect to your employment with the Company and there are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly set forth
herein.  This letter agreement may not be altered, modified or amended, except
by written instrument signed by the parties hereto and may be executed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.  The failure of a
party to insist upon strict adherence to any term of this letter agreement on
any occasion shall not be considered a waiver of such party’s rights or deprive
such party of the right thereafter to insist upon strict adherence to that term
or any other term of this letter agreement.

          This letter agreement shall not be assignable by you but may be
assigned by the Company to an entity, which is a successor in interest to
substantially all of the Company Stock or assets of the Company.

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          If the foregoing terms and conditions are acceptable and agreed to by
you, please sign on the line provided below to signify such acceptance and
agreement and return the executed copy to the undersigned.

 

BRISTOL WEST HOLDINGS, INC.

 

 

 

 

 

By:

/s/ George G. O’Brien

 

 

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Name:

George G. O’Brien

 

Title:

Chief Legal Officer

Accepted and Agreed as of this 25th day of May, 2006

 

 

 

 

 

/s/ James R. Fisher

 

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James R. Fisher

 

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