Exhibit
10.1


 


EMPLOYMENT AGREEMENT


 


EMPLOYMENT AGREEMENT (“Agreement”)
dated as of April 6, 2004 between Arch Capital Group Ltd., a Bermuda
corporation (the “Company”), and Paul B. Ingrey (the “Executive”).


 


The parties hereto agree
as follows:


 


ARTICLE 1


 


DEFINITIONS


 


SECTION 1.01. 
Definitions.  For purposes of this Agreement,
the following terms have the meanings set forth below:


 


“Base Salary”  has
the meaning set forth in Section 4.01.


 


“Cause”  means (a) theft or
embezzlement by the Executive with respect to the Company or its Subsidiaries;
(b) malfeasance or gross negligence in the performance of the Executive’s
duties; (c) the commission by the Executive of any felony or any crime
involving moral turpitude; (d) willful or prolonged absence from work by the
Executive (other than by reason of disability due to physical or mental
illness) or failure, neglect or refusal by the Executive to perform his duties
and responsibilities without the same being corrected within ten (10) days
after being given written notice thereof; (e) continued and habitual use of
alcohol by the Executive to an extent which materially impairs the Executive’s
performance of his duties without the same being corrected within ten (10) days
after being given written notice thereof; (f) the Executive’s use of
illegal drugs without the same being corrected within ten (10) days after being
given written notice thereof; or (g)  the material breach by the Executive
of any of the covenants contained in this Agreement.


 


“Confidential Information”
means information that is not generally known to the public and that was or  is
used, developed or obtained by the Company or its Subsidiaries in connection
with their business.  It shall not
include information (a) required to be disclosed by court or administrative
order, (b) lawfully obtainable from other sources or which is in the public
domain through no fault of the Executive; or (c) the disclosure of which is
consented to in writing by the Company.


 


“Date of Termination”  has
the meaning set forth in Section 5.03.


 


“Employment Period”  has
the meaning set forth in Section 2.01.


 

















 


“Intellectual Property”  has
the meaning set forth in Section 7.01.


 


“Notice of Termination”  has
the meaning set forth in Section 5.02.


 


“Noncompetition Period”  has
the meaning set forth in Section 9.01.


 


“Person” means an individual,
a partnership, a corporation, a limited liability company, an association, a
joint stock company, an estate, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.


 


“Permanent Disability”  means
those circumstances where the Executive is unable to continue to perform the
usual customary duties of his assigned job or as otherwise assigned in
accordance with the provisions of this Agreement for a period of six (6) months
in any twelve (12) month period because of physical, mental or emotional
incapacity resulting from injury, sickness or disease.  Any questions as to the existence of a
Permanent Disability shall be determined by a qualified, independent physician
selected by the Company and approved by the Executive (which approval shall not
be unreasonably withheld).  The
determination of any such physician shall be final and conclusive for all
purposes of this Agreement.


 


“Reimbursable Expenses”  has
the meaning set forth in Section 4.04.


 


“Subsidiary” or “Subsidiaries”
means, with respect to any Person, any corporation, partnership, limited
liability company, association or other business entity of which (a) if a corporation,
fifty (50) percent or more of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or combination thereof; or (b) if a
partnership, limited liability company, association or other business entity,
fifty (50) percent or more of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination
thereof.  For purposes of this
definition, a Person or Persons will be deemed to have a fifty (50) percent or
more ownership interest in a partnership, limited liability company,
association or other business entity if such Person or Persons are allocated
fifty (50) percent or more of partnership, limited liability company,
association or other business entity gains or losses or control the managing
director or member or general partner of such partnership, limited liability
company, association or other business entity.


 


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ARTICLE 2


 


EMPLOYMENT


 


SECTION 2.01. 
Employment.  The Company shall employ the
Executive, and the Executive shall accept employment with the Company, upon the
terms and conditions set forth in this Agreement for the period beginning on
the date hereof and ending as provided in Section 5.01.  The period beginning on the date hereof and
ending as provided in Section 5.01 is referred to herein as the
“Employment Period.”


 


ARTICLE 3


 


POSITION AND DUTIES


 


SECTION 3.01. 
Position
and Duties.  The Executive
shall serve as Vice Chairman of the Company and senior advisor to the Chief
Executive Officer of the Company, reporting to the Board of Directors of the
Company.  As part of such engagement,
the Executive shall not be required to be involved in any aspect of the
operation or day-to-day management of the Company.


 


ARTICLE 4


 


BASE SALARY AND BENEFITS


 


SECTION 4.01. 
Base
Salary.  During the
Employment Period, the Executive’s base salary (the “Base Salary”) will be paid at
the rate of (a) $750,000 per annum from the date hereof through
October 23, 2004 and (b) $250,000 per annum from October 24, 2004
through the remainder of the Employment Period.  The Base Salary will be payable monthly on the 15th
day of each month, two weeks in arrears and two weeks in advance.  The Executive acknowledges that, as an officer of the
Company, he will not be entitled to any additional compensation for his service
as a member of the Board of Directors of the Company.


 


SECTION 4.02. 
Benefits.  In addition to the Base Salary,
the Executive shall be entitled to benefits under any plan or arrangement
available generally for senior executive officers of the Company, subject to
and consistent with the terms and conditions and overall administration of such
plans as set forth from time to time in the applicable plan documents.


 


SECTION 4.03. 
Expenses.  The Company shall reimburse the
Executive for all reasonable expenses incurred by him (including first class
airfare) in the course of performing his duties under this Agreement which are
consistent with the Company’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, (“Reimbursable


 


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Expenses”),  subject to the Company’ requirements with
respect to reporting and documentation of expenses.  In addition, upon the Executive’s reasonable request, any private
aircraft owned or leased by the Company or its Subsidiaries from time to time
(if any) shall be made available to him at the Company’s expense for travel between
Bermuda and the Executive’s private residence.


 


ARTICLE 5


 


TERM AND TERMINATION


 


SECTION 5.01.  Term. 
The Employment Period will terminate on October 24, 2007 unless
terminated earlier (a) by either party at October 24, 2005 or
October 24, 2006 by providing at least 60 days’ prior written notice to
the other party, (b) upon the Executive’s death or Permanent Disability, or (c)
by the Company for Cause.  In addition,
this Agreement will be automatically extended on the same terms and conditions
for successive one year periods following such original term until either the
Company or the Executive, at least sixty (60) days prior to the expiration of
the original term or any extended term, shall give written notice of their
intention not to renew the Agreement.


 


SECTION 5.02. 
Notice
of Termination.  Any
termination by the Company for Permanent Disability or Cause shall be
communicated by written Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision indicated.


 


SECTION 5.03. 
Date
of Termination.  “Date of
Termination”  shall mean (a) if the Employment Period is
terminated as a result of a Permanent Disability, five (5) days after a Notice
of Termination is given, (b) if the Employment Period is terminated pursuant to
Section 5.01(a), the date specified in the Notice of Termination, and (c)
if the Employment Period is terminated for any other reason (including for
Cause), the date designated by the Company in the Notice of Termination.


 


ARTICLE 6


 


CONFIDENTIAL INFORMATION


 


SECTION 6.01. 
Nondisclosure
and Nonuse of Confidential Information. 
The Executive will not disclose or use at any time during or
after the Employment Period any Confidential Information of which the Executive
is or becomes aware, whether or not such information is developed by him,
except to the extent that such disclosure or use is directly related to and


 


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required by the
Executive’s performance of duties assigned to the Executive pursuant to this
Agreement.  Under all circumstances and
at all times, the Executive will take all appropriate steps to safeguard
Confidential Information in his possession and to protect it against disclosure,
misuse, espionage, loss and theft.


 


ARTICLE 7


 


INTELLECTUAL PROPERTY


 


SECTION 7.01. 
Ownership
of Intellectual Property.  In
the event that the Executive as part of his activities on behalf of the Company
generates, authors or contributes to any invention, design, new development,
device, product, method of process (whether or not patentable or reduced to
practice or comprising Confidential Information), any copyrightable work
(whether or not comprising Confidential Information) or any other form of
Confidential Information relating directly or indirectly to the business of the
Company as now or hereinafter conducted (collectively, “Intellectual Property”), the
Executive acknowledges that such Intellectual Property is the sole and
exclusive property of the Company and hereby assigns all right title and interest
in and to such Intellectual Property to the Company.  Any copyrightable work prepared in whole or in part by the
Executive during the Employment Period will be deemed “a work made for hire”
under Section 201(b) of the Copyright Act of 1976, as amended, and the
Company will own all of the rights comprised in the copyright therein.  The Executive will promptly and fully
disclose all Intellectual Property and will cooperate with the Company to
protect the Company’s interests in and rights to such Intellectual Property (including
providing reasonable assistance in securing patent protection and copyright
registrations and executing all documents as reasonably requested by the
Company, whether such requests occur prior to or after termination of
Executive’s employment hereunder).


 


ARTICLE 8


 


DELIVERY OF MATERLALS UPON
TERMINATION OF EMPLOYMENT


 


SECTION 8.01. 
Delivery
of Materials upon Termination of Employment. 
As requested by the Company, from time to time and upon the
termination of the Executive’s employment with the Company for any reason, the
Executive will promptly deliver to the Company all copies and embodiments, in
whatever form or medium, of all Confidential Information or Intellectual
Property in the Executive’s possession or within his control (including written
records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such


 


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material and, if
requested by the Company, will provide the Company with written confirmation
that all such materials have been delivered to the Company.


 


ARTICLE 9


 


NONCOMPETITION
AND NONSOLICITATION


 


SECTION 9.01. 
Noncompetition.  The Executive acknowledges that
during his employment with the Company, he will become familiar with trade
secrets and other Confidential Information concerning the Company, their
Subsidiaries and their respective predecessors, and that his services will be
of special, unique and extraordinary value to the Company.  In addition, the Executive hereby agrees
that at any time during the Employment Period, and for a period ending two (2)
years after the Date of Termination (if such termination is for Cause or as a
result of the Executive’s resignation or leaving employment not for Good Reason)
(the “Noncompetition
Period”), he will not directly or indirectly own, manage, control,
participate in, consult with, render services for or in any manner engage in
any business competing with the businesses of the Company or its Subsidiaries
as such businesses exist or are in process or being planned as of the Date of
Termination, within any geographical area in which the Company or its
Subsidiaries engage or plan to engage in such businesses.  Notwithstanding the foregoing, the
Noncompetition Period shall be twelve (12) months following the Date of
Termination if such termination is by the Company without Cause, by the Executive
for Good Reason or due to the Executive giving written notice pursuant to
Section 5.01 of his intention not to extend the Employment Period; provided
however, that in such circumstances, the Noncompetition Period may be
extended up to a period of eighteen (18) months following the Date of
Termination by the Company if it elects in writing to pay the Executive his
Base Salary for the additional six (6) month period, such amount to be payable
in monthly installments over the additional six (6) month period.  It shall not be considered a violation of
this Section 9.01 for the Executive (i) to be a passive owner of not
more than 2% of the outstanding stock of any class of a corporation which is
publicly traded, so long as the Executive has no active participation in the
business of such corporation, or (ii) to serve as a nonemployee director
of Fairfax Financial Holdings or its subsidiary Odyssey Reinsurance.


 


SECTION 9.02. 
Nonsolicitation.  The Executive hereby agrees that
(a) during the Employment Period and for a period of two (2) years after the
Date of Termination (the “Nonsolicitation Period”) the Executive will not,
directly or indirectly through another entity, induce or attempt to induce any
employee of the Company or its Subsidiaries to leave the employ of the Company
or its Subsidiaries, or in any way interfere with the relationship between the
Company or its Subsidiaries and any employee thereof or otherwise employ or
receive the services of any individual who was an employee of the Company or
its Subsidiaries at any time during such Nonsolicitation Period or within the
six-month period prior thereto and (b)


 


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during the
Nonsolicitation Period, the Executive will not induce or attempt to induce any
customer, supplier, client, insured, reinsured, reinsurer, broker, licensee or
other business relation of the Company or its Subsidiaries to cease doing
business with the Company or its Subsidiaries.


 


SECTION 9.03. 
Enforcement.  If, at the enforcement of Sections 9.01 or
9.02, a court holds that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances will be
substituted for the stated duration, scope or area and that the court will be
permitted to revise the restrictions contained in this Section 9 to cover
the maximum duration, scope and area permitted by law.


 


ARTICLE 10


 


EQUITABLE RELIEF


 


SECTION 10.01. 
Equitable
Relief.  The Executive
acknowledges that (a) the covenants contained herein are reasonable, (b) the
Executive’s services are unique, and (c) a breach or threatened breach by him
of any of his covenants and agreements with the Company contained in Sections
6.01, 7.01, 8.01, 9.01 or 9.02 could cause irreparable harm to the Company for
which they would have no adequate remedy at law.  Accordingly, and in addition to any remedies which the Company
may have at law, in the event of an actual or threatened breach by the
Executive of his covenants and agreements contained in Sections 6.01, 7.01,
8.01, 9.01 or 9.02, the Company shall have the absolute right to apply to any
court of competent jurisdiction for such injunctive or other equitable relief as
such court may deem necessary or appropriate in the circumstances.


 


ARTICLE 11


 


EXECUTIVE REPRESENTATIONS


 


SECTION 11.01. 
Executive
Representations.  The
Executive hereby represents and warrants to the Company that (a) the execution,
delivery and performance of this Agreement by the Executive does not and will
not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which the Executive is a
party or by which he is bound, (b) the Executive is not a party to or bound by
any employment agreement, noncompetition agreement or confidentiality agreement
with any other Person and (c) upon the execution and delivery of this Agreement
by the Company, this Agreement will be the valid and binding obligation of the
Executive, enforceable in accordance with its terms.


 


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ARTICLE 12


 


MISCELLANEOUS


 


SECTION 12.01. 
Remedies.  The Company will have all rights
and remedies set forth in this Agreement, all rights and remedies which the
Company have been granted at any time under any other agreement or contact and
all of the rights which the Company have under any law.  The Company will be entitled to enforce such
rights specifically, without posting a bond or other security, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. 
There are currently no disciplinary or grievance procedures in place,
there is no collective agreement in place, and there is no probationary period.


 


SECTION 12.02. 
Consent
to Amendments.  The
provisions of this Agreement may be amended or waived only by a written
agreement executed and delivered by the Company and the Executive.  No other course of dealing between the
parties to this Agreement or any delay in exercising any rights hereunder will
operate as a waiver of any rights of any such parties.


 


SECTION 12.03. 
Successors
and Assigns.  All covenants
and agreements contained in this Agreement by or on behalf of any of the
parties hereto will bind and inure to the benefit of the respective successors
and assigns of the parties hereto whether so expressed or not, provided that
the Executive may not assign his rights or delegate his obligations under this
Agreement without the written consent of the Company.


 


SECTION 12.04. 
Severability.  Whenever possible, each provision
of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without invalidating
the remainder of this Agreement.


 


SECTION 12.05. 
Counterparts.  This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all of which counterparts taken
together will constitute one and the same agreement.


 


SECTION 12.06. 
Descriptive
Headings.  The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.


 


SECTION 12.07. 
Notices.  All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement will be in writing and will be deemed to have been given when
delivered personally to the recipient, two (2) business days after the date
when sent to the recipient by reputable express courier service (charges


 


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prepaid) or four (4)
business days after the date when mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid.  Such notices, demands and other
communications will be sent to the Executive and to the Company at the
addresses set forth below.


 


	
  If to the Executive:

  	
   

  	
  To the last address
  delivered to the Company by the Executive in the manner set forth herein.

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  Arch Capital Group Ltd.

  
	
   

  	
   

  	
  45 Reid Street

  
	
   

  	
   

  	
  Hamilton HM 12

  
	
   

  	
   

  	
  Bermuda

  



 


or to such other address
or to the attention of such other person as the recipient party has specified
by prior written notice to the sending party.


 


SECTION 12.08. 
Withholding.  The
Company may withhold from any amounts payable under this Agreement such
federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.


 


SECTION 12.09. 
No
Third Party Beneficiary.  This
Agreement will not confer any rights or remedies upon any person other than the
Company, the Executive and their respective heirs, executors, successors and
assigns.


 


SECTION 12.10. 
Entire
Agreement.  This Agreement
(including the documents referred to herein) constitutes the entire agreement
among the parties and supersedes any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
in any way to the subject matter hereof, including the Agreement, dated as of
October 23, 2001, among the Executive, the Company and Arch Reinsurance
Ltd.  This Agreement shall serve as a
written statement of employment for purposes of Section 6 of the Bermuda Employment
Act 2000.


 


SECTION 12.11. 
Construction.  The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party.  Any reference to any
federal, state, local or foreign statute or law will be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires
otherwise.  The use of the word “including”
in this Agreement means “including without limitation” and is intended by the
parties to be by way of example rather than limitation.


 


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SECTION 12.12. 
Survival.  Sections 6.01, 7.01, 8.01 and
Articles 9 and 12 will survive and continue in full force in accordance with
their terms notwithstanding any termination of the Employment Period.


 


SECTION 12.13. 
GOVERNING
LAW.  ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL
BE GOVERNED BY THE INTERNAL LAW OF BERMUDA, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.


 


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


 


	
   

  	
  ARCH
  CAPITAL GROUP LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Constantine Iordanou

  
	
   

  	
  Printed
  Name:

  	
  Constantine
  Iordanou

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Paul B. Ingrey

  
	
   

  	
  Paul
  B. Ingrey

  
					



 


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