Document:

exhibit_10-21.htm

    Exhibit
10.21

    

    

    

    AGREEMENT

    

    

    This
Agreement (this “Agreement”)
is entered into as of this 27th day of February, 2009, by and between Thomas
Weisel Partners Group, Inc. (“TWPG”)
and Lionel F. Conacher (“Conacher”),
in his individual capacity.

    

    WHEREAS,
TWPG and Conacher have previously entered into that certain Amended and Restated
President Employment Agreement, dated December 15, 2008 (the “Employment
Agreement”), a copy of which is attached hereto as Annex A;

    

    WHEREAS,
pursuant to Section 4(b) of the Employment Agreement and subject to all terms
and conditions therein, TWPG has agreed to pay Conacher a guaranteed bonus of
$2,400,000 (the “Bonus”)
for the year ended December 31, 2008, payable in cash and/or restructured stock
units;

    

    WHEREAS,
Conacher desires to effectuate specific arrangements with respect to restricted
stock units that may be received from the Bonus, including, but not limited to
transferring some ownership interest to other employees of TWPG;
and

    

    WHEREAS,
TWPG is willing to accommodate those special arrangements.

    

    NOW,
THEREFORE, in consideration of the premises, the sufficiency of which is hereby
acknowledged, TWPG and Conacher hereby agree as follows:

    

    1. Restricted Stock
Units. At Conacher’s request, TWPG will award restricted stock units
(each such award, a “Transferred
Award”) that would have otherwise been awarded to Conacher under the
Bonus, to certain current TWPG employees identified by Conacher (each a “Receiving
Party” and, together, the “Receiving
Parties”), in such amounts as identified by Conacher. The restricted
stock units will be awarded pursuant to TWPG’s equity incentive plan and will be
subject to all restrictions and conditions set forth therein and in the related
equity award agreement.  With respect to each Transferred Award,
Conacher will receive a restricted stock unit award pursuant to which Conacher
will receive restricted stock subject to all restrictions and conditions set
forth in TWPG’s equity incentive plan and in the related equity award agreement,
which will include the condition that Conacher will receive those RSUs only to
the extent the corresponding Receiving Party forfeits those restricted stock
units in accordance with the terms of the Receiving Party’s associated award
agreement and TWPG’s equity incentive plan.

    

    2. Satisfaction of Employment
Agreement Obligations. Conacher acknowledges and agrees that any
restricted stock units so delivered to the Receiving Parties is in place of any
restricted stock units that Conacher is entitled to receive under the Bonus, and
the dollar value of such restricted stock units will be considered to have been
paid by TWPG to Conacher for all purposes under the Employment Agreement,
including for purposes of satisfying TWPG’s obligations to pay the Bonus and for
purposes of calculating Conacher’s “Historic Bonus” as such term is defined in
the Employment Agreement.

    

    3. No Further
Rights.  Conacher acknowledges and agrees that, except as set
forth in the related equity award agreement, Conacher will have no further
rights to the restricted stock units awarded under this Agreement to a Receiving
Party.

    

    4. Governing Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.

    

    IN
WITNESS WHEREOF, the undersigned, being duly authorized, have executed this
Agreement on behalf of the respective parties hereto as of the date first
written above.

    

    

    

    

    THOMAS
WEISEL PARTNERS GROUP, INC.

    

    

    

    By: /s/ Mark P.
Fisher

         Name:
Mark P. Fisher

         Title:
General Counsel

    

    

    

    LIONEL F.
CONACHER

    in his
individual capacity

    

    

    /s/ Lionel F.
ConacherExhibit 10.7

EXHIBIT 10.7

PRIMUS GUARANTY, LTD.

SENIOR MANAGEMENT SEVERANCE PAY PLAN

(including amendments through July 30, 2008)

Section 1 Purpose

The Company is implementing the Plan to make available severance benefits to a select group of
key management employees if and when employment with the Company and its Subsidiaries is terminated
under the circumstances and subject to the conditions described below. The Plan is intended to be
a welfare benefit plan as defined by Section 3(1) of ERISA. The terms of the Plan may not be
modified or amended, except as described below.

Section 2 Definitions

Capitalized terms used in the Plan and not elsewhere defined herein shall have the meanings
set forth in this Section:

(a) “Base Salary” shall mean one-twelfth of the Participant’s stated annual rate of base
salary, excluding any employer contributions towards employee benefits, bonuses, or other incentive
pay, determined as of the date immediately prior to the date of such Participant’s Termination of
Employment, provided that any reduction in the Participant’s rate of base pay that forms a basis
for such Termination of Employment shall be disregarded.

(b) “Board” shall mean the Board of Directors of the Company.

(c) “Bonus” shall mean one-twelfth of the average amount of cash and equity (valued as of the
grant date) paid or awarded to the Participant as an annual bonus for the past three years (or such
shorter period if they were not employed by the Company long enough to receive three bonuses). Any
bonus for a period less than a full year shall be prorated.

(d) “Cause” shall have the meaning set forth in any employment agreement between the Company
or any Subsidiary and the Participant, and otherwise shall mean a Participant’s having (i) been
charged with a felony or a crime involving moral turpitude, (ii) materially failed, refused or
neglected to substantially perform his or her duties (other than by reason of a physical or mental
impairment), to implement the directives of the Company, or to comply with any written Company
policy or agreement to which the Participant is a party, in each case after the Participant has
been given written notice and a reasonable opportunity to cure such failure, refusal or neglect, to
the extent curable, or
(iii) willfully engaged in conduct that is materially injurious to the Company or any Subsidiary,
monetarily or otherwise.

 

 

 

(e) “CIC Termination of Employment” shall mean a Participant’s termination of employment with
the Company and its Subsidiaries (i) initiated by the Company or a Subsidiary (other than on
account of Cause or Disability) at any time during the 3 month period preceding or the 24 month
period following a Change in Control, or (ii) initiated by the Participant for Good Reason at any
time during the 24 month period following a Change in Control.

(f) A “Change in Control” shall be deemed to have occurred upon:

(i) in any twelve (12) month period, the acquisition by any person (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act), excluding the Company or any of its
Subsidiaries or any employee benefit plan sponsored by any of the foregoing, of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the
Company representing 30% or more of the voting power with respect to the election of
directors;

(ii) in any twelve (12) month period, the cessation for any reason of the individuals
who constitute the Board as of the effective date of the Plan (the “Incumbent Board”) to
constitute at least a majority of the members of the Board, provided that any individual
becoming a director subsequent to the effective date of the Plan whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than any individual
whose nomination for election to Board membership was not endorsed by the Company’s
management prior to, or at the time of, such individual’s initial nomination for election)
shall be, for purposes of the Plan, considered as though such person were a member of the
Incumbent Board; or

(iii) the consummation of a merger, consolidation, recapitalization, reorganization,
sale or disposition of all or a substantial portion of the Company’s assets, a reverse
stock split of outstanding voting securities, or the issuance of shares of stock of the
Company in connection with the acquisition of the stock or assets of another entity,
provided, however, that a Change in Control shall not occur under this clause (iii) if
consummation of the transaction would result in more than 50% of the total voting power
with respect to the election of directors represented by the voting securities of the
Company (or, if not the Company, the entity that succeeds to all or substantially all of
the Company’s business) outstanding immediately after such transaction being beneficially
owned by all or substantially all of the holders of outstanding voting securities of the
Company immediately prior to the transaction, with the voting power of each such continuing
holder relative to other such continuing holders not substantially altered in the
transaction.

 

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(g) “COBRA Premium” shall mean, for a Participant who is entitled to, and elects to receive,
continued health coverage under the health plans of the Company or a Subsidiary pursuant to Part 6
of Subchapter I of Title I of the ERISA, the monthly premium paid by the Participant for such
coverage.

(h) “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

(i) “Company” shall mean Primus Guaranty, Ltd. and any successor that assumes the Plan
pursuant to Section 9 (other than for purposes of determining whether a Change in Control has
occurred in connection with such successor).

(j) “Disability” shall mean a Participant’s physical or mental impairment such that he or she
qualifies for benefits under a long-term disability insurance plan sponsored by the Company or a
Subsidiary.

(k) “ERISA” shall mean the U.S. Employee Retirement Income Security Act of 1974, as amended.

(l) “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.

(m) “Good Reason” shall mean a (i) reduction of a Participant’s rate of base pay (other than a
reduction that applies proportionately to all employees similarly situated to the Participant) or
his or her target annual bonus opportunity, if any, as in effect immediately prior to a Change in
Control, (ii) a relocation of a Participant’s principal place of employment by more than 50 miles
from such place of employment immediately prior to a Change in Control, (iii) a material and
adverse change or diminution of the Participant’s job duties or responsibilities as in effect
immediately prior to a Change in Control, after the Participant has given the Company written
notice and a reasonable opportunity to cure such change or diminution, or (iv) any failure by the
Company to obtain the assumption of the Plan by any successor or assign of the Company as provided
in Section 9. Notwithstanding the foregoing, Good Reason shall not include (x) a removal of a
Participant from the Operating Committee, or (y) a change in the Participant’s reporting
relationships, or an adjustment in the nature of a Participant’s duties and responsibilities that
in either case continues to allow the Participant to have the same authority with respect to the
Company’s functional area, employees or products and services that the Participant had immediately
prior to such change or adjustment (and, for the avoidance of doubt, a change in, or elimination
of, duties or responsibilities caused by reason of the Company ceasing to be publicly traded shall
not constitute Good Reason).

(n) “Non-CIC Termination of Employment” shall mean a Participant’s termination of employment
with the Company and its Subsidiaries initiated by the Company or a Subsidiary other than on
account of Cause or Disability that occurs at any time other than during the 3 month period
preceding or the 24 month period following a Change in Control.

 

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(o) “Participant” shall mean any employee of the Company or a Subsidiary who is described as
an eligible employee in Section 3 and satisfies the conditions for participation in the Plan set
forth in Section 3.

(p) “Plan” shall mean the Primus Guaranty, Ltd. Senior Management Severance Pay Plan, as set
forth herein, and as the same may from time to time be amended.

(q) “Plan Committee” shall mean the committee designated to administer the Plan pursuant to
Section 7.

(r) “Severance Period” for a Participant shall mean (i) with respect to a Non-CIC Termination
of Employment, the period commencing on the date of such Participant’s termination of employment
and ending on the date that is such number of months thereafter as is equal to the Participant’s
Years of Service, but such period shall be no less than 2 months and no greater than 12 months, and
(ii) with respect to a CIC Termination of Employment, a period commencing on the date of such
termination of employment and ending on the date that is 18 months later.

(s) “Subsidiary” shall mean an entity that is, either directly or through one or more
intermediaries, controlled by the Company.

(t) “Termination of Employment” shall mean either a CIC Termination of Employment or a Non-CIC
Termination of Employment.

(u) “Years of Service” shall mean the number of consecutive full twelve month periods since
the Participant’s last date of hire by the Company in which the Participant is paid by the Company
for the performance of full-time services in a capacity that qualifies such person for
participation in this Plan. Years of Service shall be measured in full years and no credit shall
be provided for fractions of a Year of Service.

Section 3 Eligibility

All members of the Company’s Operating Committee and all employees of the Company or any
Subsidiary designated by the Plan Committee shall participate in the Plan. No person shall receive
any payments under the Plan unless such person becomes party to a non-competition agreement
substantially in the form attached as Appendix A (the “Non-Competition Agreement”).

 

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Section 4 Severance Benefits

(a) Cash Severance. In the event of a Participant’s Non-CIC Termination of Employment,
the Company shall pay the Participant the sum of his or her Base Salary and Bonus for each month
during the Severance Period consistent with the Company’s normal payroll practices applicable to
the Participant immediately prior to his or her Termination of Employment (or as such payroll
practices may be revised by the
Company from time to time). In the event of a Participant’s CIC Termination of Employment, the
Company shall pay the Participant the sum of (i) his or her Base Salary and (ii) the greater of (x)
his or her Bonus, or (y) the product of his or her Base Salary multiplied by the bonus factor set
forth on Appendix B, for each month during the Severance Period consistent with the Company’s
normal payroll practices applicable to the Participant immediately prior to his or her Termination
of Employment (or as such payroll practices may be revised by the Company from time to time).

(b) Prorated Bonus. In the event of a Participant’s Non-CIC Termination of Employment
during a fiscal year, the Company shall pay the Participant the cash portion of the annual bonus to
which the Participant would have been entitled had he or she remained employed by the Company or a
Subsidiary until the date bonuses are payable in respect of such fiscal year, multiplied by a
fraction, the numerator of which equals the sum of the number of months (or fractions thereof)
during such fiscal year that the Participant was employed by the Company or a Subsidiary and the
denominator of which equals twelve, paid when the bonus is normally paid. In the event of a
Participant’s CIC Termination of Employment, the Company shall pay the Participant an amount equal
to (i) twelve times the greater of (x) the Bonus or (y) the product of the Participant’s Base
Salary multiplied by the bonus factor set forth on Appendix B, multiplied by (ii) a fraction, the
numerator of which equals the sum of the number of months (or fractions thereof) during such fiscal
year that the Participant was employed by the Company or a Subsidiary and the denominator of which
equals twelve, paid when the bonus is normally paid.

(c) Prior Year’s Bonus. In the event of a Participant’s Non-CIC Termination of
Employment after the end of a fiscal year but prior to the date annual bonus are to be paid for
such year, the Company shall pay the Participant the cash portion of the annual bonus to which the
Participant would have been entitled, if any, had he or she remained employed by the Company or a
Subsidiary until the date bonuses for such fiscal year would have been paid, to be paid when the
bonus is normally paid. In the event of a Participant’s CIC Termination of Employment after the
end of a fiscal year but prior to the date annual bonus are to be paid for such year, the Company
shall pay the Participant an amount equal to (i) twelve times the greater of (x) the Bonus or (y)
the product of the Participant’s Base Salary multiplied by the bonus factor set forth on Appendix
B, paid when the bonus is normally paid.

(d) Health Benefits. In the event of a Participant’s Termination of Employment, the
Company shall reimburse the Participant the COBRA Premium paid by the Participant in respect of
each month during the Severance Period, provided that such reimbursement shall be reduced by the
amount of any monthly co-premium payment the Participant would have been required to make had he or
she remained actively employed by the Company or a Subsidiary.

 

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(e) Accelerated Vesting. Upon a Participant’s CIC Termination of Employment, all
outstanding unvested awards relating to the Company’s stock (or any securities or other
consideration into which such stock was converted in connection with
the Change in Control) whose vesting was conditioned solely upon the Participant’s future
performance of services shall become fully vested. Additionally, upon a Participant’s death,
disability or retirement (as such latter term is defined in the Company’s 2004 Share Incentive
Plan) all outstanding unvested awards relating to the Company’s stock whose vesting was conditioned
solely upon the Participant’s future performance of services shall become fully vested. As to any
such award whose vesting was also dependent upon achieving a targeted level of performance during a
specified performance period, such award shall vest on the assumption that targeted level of
performance was achieved, or, if greater, expected actual performance determined at the time of a
Change in Control, and shall be prorated to reflect the portion of such specified performance
period during which the participant was actually employed by the Company or any Subsidiary.

Additionally, all of a Participant’s unvested “make-whole signing bonuses” shall vest in the
event of a Termination of Employment. Further, in the event a Participant’s employment is
terminated by reason of his or her position having been eliminated, all of his or her outstanding
unvested awards relating to the Company’s stock shall vest.

Section 5 Conditions; Offset

(a) Conditions. No benefits will be paid or provided pursuant to Section 4 unless and
until the Participant executes a release of claims in favor of the Company and its affiliates in
substantially the form attached as Appendix C, and such release becomes irrevocable, as provided in
such release. In addition, a Participant shall not be entitled to any benefits under Section 4 if
such Participant has breached the Non-Competition Agreement, or has breached any other agreement
with the Company relating to nondisclosure of confidential information or ownership of intellectual
property. In the event of such breach, the Participant shall repay to the Company all amounts
previously paid to him or her under the Plan.

(b) Offset. Any amount to be paid or benefit to be provided under Section 4 shall be
reduced by any like amount to be paid or provided pursuant to the terms of any employment agreement
between the Company or any Subsidiary and the Participant. In addition, the Company may offset
from any payment otherwise due a Participant pursuant to the Plan any amount the Participant owes
the Company or any Subsidiary.

Section 6 Special Tax Gross-Up

(a) Gross-Up. A Participant shall be entitled to a payment in an amount that, on an
after-tax basis (including federal income and excise taxes, social security and Medicare taxes and
state and local income taxes) equals the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”) upon the Participant by reason of amounts payable under the Plan (including this
Section 6), as well as other amounts payable outside the Plan by the Company or any Subsidiary that
are described in Section 280G(b)(2)(A)(i) of the Code. For purposes of this subsection, the
Participant shall be
deemed to pay federal, state and local income taxes at the highest marginal rate of taxation.

 

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(b) Cut-Back. Notwithstanding Section 6(a), no payment shall be made thereunder, and
amounts payable under Section 4 and, if necessary, amounts payable outside of the Plan by the
Company or any Subsidiary that are described in Section 280G(b)(2)(A)(i) of the Code, shall be
reduced to the extent necessary to avoid any portion of any such payment being treated as a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code if, after such reduction,
the Participant would retain at least 90% of the amount that would otherwise be payable without
regard to this Section 6(b). Reductions to be made under this Section 6(b) shall first be applied
to amounts payable in cash, then to non-cash benefits other than acceleration of vesting, and then
to acceleration of vesting.

(c) Determinations. Determinations of the Excise Tax and the amount of the payment or
reduction to be made pursuant to Section 6(a) or (b) shall be made by the Plan Committee. If it is
subsequently determined by the U.S. Internal Revenue Service (“IRS”) that the Excise Tax is greater
than the amount so determined, the Plan Committee shall recalculate the payment or reduction to be
made pursuant to Section 6(a) or (b), and make any appropriate payment to the Participant. The
Company, at its cost, may, on the Participant’s behalf, challenge any assessment or imposition of
any such excise tax by the IRS, and the Participant will reasonably assist and cooperate with the
Company, at the Company’s expense, with respect to any such challenge. Should the Participant
receive a refund of any excise tax previously paid, the Participant shall repay to the Company the
portion of any gross-up payment made in respect of the Excise Tax so refunded. The Participant
will, with respect to the applicability of the Excise Tax, take a position consistent with that of
the Company at all times.

Section 7 Administration

(a) Plan Committee. The Plan shall be administered by the Compensation Committee of
the Board, unless the Board shall appoint a different committee. Other provisions of the Plan
notwithstanding, the Board may perform any function of the Plan Committee under the Plan, and to
the extent authority is specifically reserved to the Board under the terms of the Plan, the
Company’s Certificate of Incorporation or Bye-Laws, or applicable law, such authority shall be
exercised by the Board and not by the Plan Committee.

(b) Powers and Duties of Plan Committee. In addition to the powers and duties
specified elsewhere in the Plan, the Plan Committee shall have full authority and discretion to:

(i) adopt, amend, suspend, and rescind such rules and regulations and appoint such
agents as the Plan Committee may deem necessary or advisable to administer the Plan;

(ii) correct any defect or supply any omission or reconcile any inconsistency in the
Plan and to construe and interpret the Plan or other instrument hereunder;

 

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(iii) make determinations relating to eligibility for and entitlements to benefits
under the Plan, and to make all factual findings related thereto; and

(iv) make all other decisions and determinations as may be required under the terms of
the Plan or as the Plan Committee may deem necessary or advisable for the administration of
the Plan.

(c) Delegation by Plan Committee. Except to the extent prohibited by applicable law
or the applicable rules of a stock exchange, the Plan Committee may delegate to any person or
persons selected by it, who may or may not be members of the Board, all or any part of its
responsibilities and powers as set forth in the Plan. Any such allocation or delegation may be
revoked by the Plan Committee at any time. Except as notified in writing to the contrary by the
Plan Committee, in the event of such allocation or delegation, the Plan Committee’s delegates shall
have all of the powers vested in the Plan Committee necessary to fulfill the functions delegated.

Section 8 Claims Procedure

(a) Generally. This Section 8 describes the Plan’s procedures under which an
individual can make a claim for benefits under the Plan and appeal a denied claim for benefits. A
request for benefits is a “claim” subject to these procedures only if it is filed by an individual
or his or her authorized representative in accordance with the Plan’s claim filing guidelines. All
claims must be filed with the Plan Committee in writing (to the attention of “Severance Plan
Committee” addressed to the Company’s corporate headquarters). If an individual wants to bring a
claim for benefits under the Plan, the individual may designate an authorized representative to act
on his or her behalf so long as the individual provides written notice of such designation to the
Plan Committee identifying such authorized representative.

(b) Time Periods for Responding to Initial Claims. If an individual brings a claim
for benefits under the Plan, the Plan Committee will respond to the individual within 90 days after
receipt of the claim. If the Plan Committee determines that an extension is necessary due to
matters beyond the control of the Plan, the Plan Committee will notify the individual within the
initial 90-day period that the Plan Committee needs up to an additional 90 days to review his or
her claim.

(c) Notice and Information Contained in Notice Denying Initial Claim. If the Plan
Committee denies a claimant’s claim (in whole or in part), the Plan Committee will provide the
individual with written notice of the denial. This notice will include the specific reason or
reasons for the denial; reference to the specific provisions on which the denial is based; a
description of any additional material or information necessary for the individual to perfect his
or her claim and an explanation as to why such information is
necessary; and a description of the Plan’s appeals procedures and the time limits applicable for
such procedures (such description to include a statement that the individual is eligible to bring a
civil action in U.S. Federal court under Section 502 of ERISA to appeal any adverse decision on
appeal and a description of any expedited review process for urgent care claims).

 

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(d) Appealing a Denied Claim for Benefits. If an individual’s initial claim for
benefits is denied, the individual may appeal the denial by filing a written request addressed to
the Severance Plan Committee, within 60 days after the individual receives the notice denying his
or her initial claim for benefits. If the individual decides to appeal a denied claim for
benefits, the individual will be able to submit written comments, documents, records, and other
information relating to his or her claim for benefits (regardless of whether such information was
considered in his or her initial claim for benefits) for review and consideration. The claimant
will also be entitled to receive, upon request and free of charge, access to and copies of, all
documents, records and other information that is relevant (within the meaning of ERISA) to his or
her appeal.

(e) Time Periods for Responding to Appealed Claims. If a claimant appeals a denied
claim for benefits under the Plan, the Plan Committee will respond to the individual within 60 days
after receipt of the claim. If the Plan Committee determines that an extension is necessary due to
matters beyond the control of the Plan, the Plan Committee will notify the individual within the
initial 60-day period that the Plan Committee needs up to an additional 60 days to review his or
her appeal.

(f) Notice and Information Contained in Notice Denying Appeal. If the Plan Committee
denies an individual’s appeal (in whole or in part), the Plan Committee will provide the individual
with written notice of the denial. This notice will include the specific reason or reasons for the
denial; reference to the specific provisions on which the denial is based; a statement that the
individual is entitled to receive, upon request and free of charge, access to and copies of, all
documents, records and other information that is relevant (within the meaning of ERISA) to his or
her claim and/or appeal for benefits; and a statement that the individual is entitled to bring a
civil action in U.S. Federal court under Section 502 of ERISA to pursue his or her claim for
benefits.

Section 9 Successor to the Company

The Company may require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or assets
of the Company to expressly to assume the Plan and agree to perform the obligations hereunder in
the same manner and to the same extent the Company would be required to perform if no such
succession had taken place.

 

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Section 10 Amendment; Termination; Removal from Participation

The Board retains the right to amend, suspend or terminate the Plan in whole or in part for
any reason, and the Plan Committee retains the right to remove any particular
Participant from further participation in the Plan for any reason; provided,
however, that if any such action adversely affects the rights of any Participant under the
Plan, then without the consent of the affected Participant, (i) 12 months’ advance notice must be
provided to each adversely affected Participant before any such action is effective, and (ii) no
such action shall become effective during the 24 month period following a Change in Control. For
the avoidance of doubt, although a Participant may be removed from the Operating Committee without
notice, such removal shall not cause the Participant’s participation in the Plan to cease until the
later of 12 months after such removal, or, if such removal occurs during the 24 month period
following a Change in Control, the end of such 24 month period.

Section 11 General Provisions

(a) No Mitigation. A Participant shall not be required to mitigate the amount of any
payment or benefit provided for in the Plan by seeking other employment or otherwise, nor shall the
amount of any payment or benefit provided for herein be reduced by any compensation earned by other
employment or otherwise.

(b) Non-Exclusivity of Rights. Nothing in the Plan shall prevent or limit the
Participant’s continuing or future participation in or rights under any benefit, bonus, incentive
or other plan or Plan provided by the Company and for which the Participant may qualify; provided,
however, that if the Participant becomes entitled to and receives all of the payments provided for
in the Plan, the Participant agrees to waive his or her right to receive payments under any
severance plan or similar Plan applicable to all employees of the Company.

(c) Nonalienation of Benefits. None of the payments, benefits or rights of any
Participant shall be subject to any claim of any creditor, and, in particular, to the fullest
extent permitted by law, all such payments, benefits and rights shall be free from attachment,
garnishment, trustee’s process, or any other legal or equitable process available to any creditor
of such Participant. No Participant shall have the right to alienate, anticipate, commute, pledge,
encumber or assign any of the benefits or payments which he may expect to receive, contingently or
otherwise, under the Plan.

(d) No Contract of Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant the right to be retained in the service of
the Company or any Subsidiary, and all Participants shall remain subject to discharge to the same
extent as if the Plan had never been adopted.

(e) Death. In the event of a Participant’s death following his or her Termination of
Employment and after having become entitled to benefits under the Plan, any amounts not yet paid
pursuant to Section 4(a) shall be paid to the person(s) or trust(s) which have been designated by
the Participant in his or her most recent written beneficiary designation filed with the Plan
Committee or the Company’s Director of Human Resources. If, upon a Participant’s death, there is
no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means the person(s) or trust(s)
entitled by will or the laws of descent and distribution to receive such amounts.

 

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(f) Tax Withholding. The Company and each Subsidiary shall have the right to withhold
from any payment to be made pursuant to the Plan such amount as it is required to withholding under
applicable withholding tax laws.

(g) Severability of Provisions. If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof,
and the Plan shall be construed and enforced as if such provisions had not been included.

(h) Unfunded Plan. The Plan shall not be funded. No Participant shall have any right
to, or interest in, any assets of the Company or any Subsidiary which may be applied by the Company
to the payment of Benefits.

(i) Controlling Law. The Plan shall be construed and enforced according to the laws
of the state of New York, except to the extent preempted by United States Federal law.

 

11

 

Appendix A

Non-Competition Agreement

This agreement is made by and between Primus Guaranty, Ltd. (the “Company”) and
 _____ 

(“Employee”) as of the
 _____ 
day of
 _____, 200_____.

In consideration of Employee’s continued employment with the Company or any of its
subsidiaries, the selection of Employee to participate in the Primus Guaranty, Ltd. Senior
Management Severance Pay Plan (the “Severance Plan”), and other good and valuable consideration
hereby acknowledged by Employee, Employee acknowledges and agrees as follows:

1. Employee will not, during Employee’s employment and during the Restricted Period (as defined
below) directly or indirectly, on Employee’s own behalf or as a partner, officer, director,
employee, agent, consultant or stockholder (other than as the holder of 1% or less of the voting
capital stock of any corporation with a class of equity securities registered under Section 12(b)
or 12(g) of the U.S. Securities Exchange Act of 1934, as amended) engage in or render services to
any person or entity engaged in the development or sale of financial products related to credit
enhancement, or that is a dealer with respect to such products, where Employee’s activities will
relate primarily to financial products offered by the Company or one of its subsidiaries or
affiliates at the time of Employee’s termination of employment. For purposes of this agreement,
the “Restricted Period” shall mean the period commencing on the date hereof and ending on the one
year anniversary of Employee’s termination of employment with the Company and all of its
subsidiaries, provided that in the event such termination is under circumstances entitling Employee
to severance benefits under Section 4 of the Severance Plan, the Restricted Period shall end on the
earlier of such one year anniversary, or the date that the Severance Period, as defined in the
Severance Plan, expires.

2. Employee acknowledges that the relationships of the Company and its subsidiaries with their
employees, customers and vendors are valuable business assets. Employee agrees that, during
Employee’s employment and during the Restricted Period, Employee will not directly or indirectly
(for Employee or for any third party) divert or attempt to divert from the Company or its
subsidiaries and affiliates any business, employee, customer or vendor, through solicitation or
otherwise.

3. Employee acknowledges that the restrictions contained in paragraphs 1 and 2 of this agreement,
in view of the nature of the businesses in which the Company and its subsidiaries are engaged, are
reasonable and necessary in order to protect the legitimate interests of the Company and its
subsidiaries and that any violation thereof would result in irreparable injuries to the Company and
its subsidiaries which would not be readily ascertainable or compensable in terms of money, and
therefore further 

 

12

 

acknowledges that, in the event of his violation of any of these restrictions,
the Company shall be
entitled to obtain from any court of competent jurisdiction temporary, preliminary and permanent
injunctive relief as well as damages and an equitable accounting of all earnings, profits and other
benefits arising from such violation, which rights shall be cumulative and in addition to any other
rights or remedies to which the Company may be entitled. Employee further agrees that if it is
determined by a court that Employee has breached the terms of the aforesaid paragraphs, the Company
shall be entitled to recover from Employee all costs and reasonable attorneys’ fees incurred as a
result of its attempts to redress such breach or to enforce its rights and protect its legitimate
interests. Employee agrees that a copy of this agreement may be submitted to any court or other
tribunal in connection with any proceeding concerning the meaning, interpretation or enforcement of
the terms of this agreement.

4. The Company may assign this agreement to any successor to its business or assets. This
agreement shall inure to the benefit of and be binding upon the Company and its successors and
assigns and upon Employee and his legal representatives.

5. This agreement does not confer upon Employee any right or obligation to continue in the employ
of the Company or alter in any way the at-will nature of Employee’s employment relationship with
the Company.

6. If any portion or application of this agreement, including particularly the restrictions set
forth above, should for any reason whatsoever be declared invalid, in whole or in part, by a court
of competent jurisdiction, such illegal or unenforceable provision or application or part thereof
shall be severable from this agreement and shall not in any way affect the validity or
enforceability of any of the remaining provisions or applications. In that regard, Employee hereby
declares that the restrictions set forth above are reasonable and properly required for the
adequate protection of the businesses of the Company. In the event the scope of any restriction is
deemed to be unreasonable by any court of competent jurisdiction, Employee agrees to the reduction
of said restriction to such scope that said court shall deem reasonable.

7. This agreement shall be construed and enforced in accordance with the laws of the State of New
York, without regard to choice of law principles. Employee (i) irrevocably submits to the
jurisdiction of any state or federal court sitting in the State of New York for the purposes of any
suit, action or other proceeding arising out of or relating to this agreement, and (ii) waives and
agrees not to assert in any such proceeding a claim that he is not personally subject to the
jurisdiction of the court referred to above, that the suit or action was brought in an inconvenient
forum or that the venue of the suit or action is improper.

 

13

 

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

	 	 	 	 	 	 	 	 	 	 	 
	EMPLOYEE	 	 	 	PRIMUS GUARANTY, LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
 
	 	 
	 

	 	 	 	 	 	 	 	Title:
 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Dated:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

 

14

 

Appendix B

Bonus Factors

	 	 	 
	Name

	 	Bonus Factor

 

15

 

Appendix C

RELEASE

I,
 _____, the undersigned, agree to accept the compensation, payments,
benefits and other consideration provided for in Section 4 of the Senior Management Severance Pay
Plan (the “Plan”) of Primus Guaranty, Ltd. (the “Company”) in full resolution and satisfaction of,
and hereby IRREVOCABLY AND UNCONDITIONALLY RELEASE, REMISE AND FOREVER DISCHARGE the Company and
Releasees from any and all agreements, promises, liabilities, claims, demands, rights and
entitlements of any kind whatsoever, in law or equity, whether known or unknown, asserted or
unasserted, fixed or contingent, apparent or concealed, to the maximum extent permitted by law
(“Claims”), which I, my heirs, executors, administrators, successors or assigns ever had, now have
or hereafter can, shall or may have for, upon, or by reason of any matter, cause or thing
whatsoever existing, arising, occurring or relating to my employment and/or termination thereof
with the Company and Releasees, or my status as a stockholder of the Company and Releasees, at any
time on or prior to the date I execute this Release, including, without limitation, any and all
Claims arising out of or relating to compensation, benefits, any and all contract claims, tort
claims, fraud claims, claims for bonuses, commissions, sales credits, etc., defamation,
disparagement, or other personal injury claims, claims for accrued vacation pay, claims under any
federal, state or municipal wage payment, discrimination or fair employment practices law, statute
or regulation, and claims for costs, expenses and attorneys’ fees with respect thereto. This
release and waiver includes, without limitation, any and all rights and claims under Title VII of
the U.S. Civil Rights Act of 1964, the U.S. Civil Rights Acts of 1866, 1871 and 1991, the U.S.
Employee Retirement Income Security Act, the U.S. Age Discrimination in Employment Act (including
but not limited to the U.S. Older Workers Benefit Protection Act), the U.S. Americans with
Disabilities Act, the U.S. National Labor Relations Act, the U.S. Family and Medical Leave Act, the
U.S. Equal Pay Act, the U.S. Sarbanes-Oxley Act, [add applicable state laws and/or Bermuda laws
relating to employment] and all amendments to the foregoing, and any other federal, state or local
statute, ordinance, regulation or constitutional provision regarding employment, compensation,
employee benefits, termination of employment or discrimination in employment. Notwithstanding the
above, I do not release my right to any right to indemnification I may have as a director, officer
or employee pursuant to applicable law and/or the Company’s certificate of incorporation or
bye-laws.

I represent and affirm (i) that I have not filed any Claim against the Company and Releasees
and (ii) that to the best of my knowledge and belief, there are no outstanding Claims within the
meaning of this paragraph.

For the purpose of implementing a full and complete release and discharge of Claims, I
expressly acknowledge that this Release is intended to include in its effect, without limitation,
all the Claims described in the preceding paragraphs, whether known or unknown, apparent or
concealed, and that this Release contemplates the extinction of all such Claims, including Claims
for attorneys’ fees and expenses. I expressly waive
any right to assert after the execution of this Release that any such Claim has, through
ignorance or oversight, been omitted from the scope of the Release.

 

16

 

For purposes of this Release, the term “the Company and Releasees” includes the Company and
its past, present and future direct and indirect parents, subsidiaries, affiliates, divisions,
predecessors, successors, and assigns, and their past, present and future officers, directors,
shareholders, representatives, agents, attorneys and employees, in their official and individual
capacities, and all other related individuals and entities, jointly and individually, and this
Release shall inure to the benefit of and shall be binding and enforceable by all such entities and
individuals.

[add any special provisions necessary under state law relating to employment]

I understand that I have a period of up to 14 days [21 if age 40 or older] from my receipt of
this Release to review and consider this Release. [if age 40 or older add: I further understand
that once I have signed this Release, I may revoke it at any time during the 7 days following its
execution by delivering a written notice of revocation to the Company, attention General Counsel.]
I further understand that if I fail to execute and return this Release to the Company, attention
General Counsel, prior to the expiration of such 14 [21] day period, [or revoke my execution of the
Release during such 7 day period], I will not be entitled to the compensation, payments, benefits
and other consideration provided for in Section 4 of the Plan.

I ACKNOWLEDGE THAT I HAVE READ THIS

RELEASE AND I UNDERSTAND

AND ACCEPT ITS TERMS

	 	 	 	 	 	 	 
	 

	 	 	 	 

Date
	 	 

Sworn to before me this

 _____ 
day of
 _____, 20_____ 

	 	 	 
	 
	 	 
	 

Notary Public

	 	 

 

17

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