Document:

Exhibit 10.2

 

AXIS CAPITAL HOLDINGS LIMITED

96 PITTS BAY ROAD

PEMBROKE, BERMUDA   HM08

September 8, 2006

Mr. David B. Greenfield

96 Pitts Bay Road

Pembroke, Bermuda   HM08

Dear David:

We are delighted
that you have decided to join AXIS Capital Holdings Limited, a holding company
domiciled in Bermuda (the “Company”). We thought it would be useful to
lay out the terms and conditions of our agreement in this letter agreement
(this “Agreement”).  This
Agreement is dated as of September 8, 2006.

1.                                      Employment.

The Company hereby
agrees to employ you in the position of Executive Vice President and Chief
Financial Officer of the Company or in such other position as is mutually
agreeable to you and the Company.  You
will report to the Chief Executive Officer and President of the Company. You
will be expected to devote your full business time and energy, attention,
skills and ability to the performance of your duties and responsibilities to
the Company on an exclusive basis, including service to subsidiaries and affiliates
of the Company as requested by the Board of Directors of the Company (the “Board”),
and shall faithfully and diligently endeavor to promote the business and best
interests of the Company and its subsidiaries and affiliates.  Anything herein to the contrary
notwithstanding, nothing shall preclude you from (i) serving on the boards of
directors of a reasonable number of other corporations or the boards of a
reasonable number of trade associations and/or charitable organizations, (ii)
engaging in charitable, community and other business affairs and (iii) managing
your personal investments and affairs; provided such activities do not, in the
reasonable judgment of the Company, adversely impact your ability to properly
perform your responsibilities and duties hereunder.

2.             Compensation
and Benefits.

(a)           During your employment with the
Company, your annual base salary shall be $475,000.00 (the base salary as may
be increased from time to time “Base Salary”) and shall be paid pursuant
to the Company’s customary payroll practices. The Base Salary will be reviewed
annually and may be increased in the sole discretion of the Company.

(b)           In addition to the Base Salary, in
each fiscal year of the Company during your employment with the Company, you
will have the opportunity to earn an annual cash bonus (“Annual Bonus”)
if the Company achieves certain performance objectives and subject to your
individual performance (each of which will be determined by the Company for
each such fiscal year). The Annual Bonus during your first year of employment
will be prorated based on your 

 

 

actual commencement date, but shall not be less than $200,000
(less applicable statutory deductions). 
The Annual Bonus for each period will be paid only if you are actively
employed with the Company on the date on which bonuses are disbursed to
similarly situated senior executives.

(c)           Following the execution of this
Agreement and the commencement of your employment with the Company, Company
shall grant you an award of ten thousand (10,000) restricted shares of the
Common Stock (“Restricted Shares”) of Company pursuant to the Company
Equity Plan.  The Restricted Shares will
vest on the third anniversary of the date of grant provided you have remained
employed by the Company until such date and as otherwise set forth in the
Company Equity Plan and the award agreement. Prior to vesting, the Restricted
Shares shall be non-transferable and, if your employment terminates prior to
vesting of the Restricted Shares in accordance with Section 3(b), the
Restricted Shares shall be forfeited. 
All other terms and conditions shall be provided in the Company Equity
Plan and the award agreement.

(d)           During your employment with the
Company, you will be entitled to participate generally in the benefit plans made
available to senior executives of the Company in accordance with the terms of
those plans.

(e)           During your employment with the
Company, you will be entitled to 25 working days of paid vacation per calendar
year.

(f)            During your employment with the
Company, the Company will reimburse you for all reasonable business expenses
incurred by you in the course of performing your 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, subject to
the Company’s requirements with respect to reporting and documentation of
expenses.  Such reimbursements shall also
include any fees or other expenses, including legal expenses, in connection
with obtaining and maintaining a work permit from the Bermuda government
authority and reimbursements on an after-tax basis for reasonable expenses
incurred in traveling between Bermuda and the United States.

(g)           During your employment with the
Company, the Company will reimburse you on an after-tax basis for the costs of
suitable accommodations and related expenses while working in Bermuda,
including reimbursement for the use of an automobile, if necessary, as approved
by the President and CEO.

(h)           During your employment with the
Company, and subject to the Company’s prior review and approval, you will be
reimbursed by the Company for the initiation fees and annual membership fees of
one private club; provided, however, that the Company shall have no
other obligations to you relating to any other costs of your membership in that
private club.

(i)            During your employment with the
Company, the Company will reimburse you for reasonable costs incurred for
preparation of annual tax returns and associated tax planning, not to exceed
US$10,000 per year.

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3.                                      Term
of Employment

(a)           The employment period shall
commence on September 8, 2006 and shall terminate on the day preceding the
third anniversary thereof; provided, however, that the term of
employment shall automatically be extended for successive one-year periods
unless either party shall give at least six (6) months’ prior written notice of
non-renewal. Notwithstanding the foregoing, your employment hereunder will be
terminated upon the earliest to occur of the following events:

(i)                                    Death. 
Your employment shall automatically terminate upon your death.

(ii)                                Disability. 
The Company shall be entitled to terminate your employment if, as a
result of your incapacity due to physical or mental illness or injury, you
shall have been unable to perform your duties hereunder for a period of 181
days in any twelve-month period.

(iii)                            Cause. 
The Company may terminate your employment for Cause which, for purposes
of this Agreement, shall mean (A) any act or omission which constitutes a
material breach by you of the terms of your employment, (B) the conviction of a
felony or commission of any act which would rise to the level of a felony, (C)
the conviction or commission of a lesser crime or offense that adversely
impacts or potentially could impact upon the business or reputation of the
Company and/or affiliates and subsidiaries in a material way, (D) your willful
violation of specific lawful directives of the Company, (E) commission of a
dishonest or wrongful act involving fraud, misrepresentation, or moral
turpitude causing damage or potential damage to the Company and/or affiliates
and subsidiaries, (F) the willful failure to perform a substantial part of your
duties, (G) breach of fiduciary duty.

(iv)                              Without Cause. 
The Company may terminate your employment at any time without Cause; provided,
however, that the Company provides you with notice of its intent to terminate
at least 30 days in advance of the date of termination.  Termination without Cause shall include the
Company’s non-renewal of a successive one-year period of your employment with
the Company as provided for in this Section 3(a).

(v)                                  Voluntary Resignation. 
You may voluntarily terminate your employment hereunder; provided,
however, that you provide the Company with notice of your intent to terminate
at least six (6) months in
advance of the date of termination. 
Voluntary Resignation shall include your non-renewal of a successive
one-year period of your employment with the Company as provided for in this
Section 3(a).

(b)           In the event that your employment
with the Company shall terminate pursuant to Sections 3(a)(i), (ii), (iii), or
(v), the Company’s sole obligation under the Agreement shall be to (i) pay to
you any accrued and unpaid Base Salary through the date of termination of
employment, and an amount equal to such reasonable and necessary unreimbursed
business 

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expenses incurred by you
on behalf of Company on or prior to the date of termination of employment and
(ii) afford you all the employee benefits to which you may be entitled under,
and in accordance with the terms of, all employee benefit plans in which you
participate.

(c)            In the event that the Company
terminates your employment without Cause in accordance with the provisions of
Section 3(a)(iv) hereof, you shall be entitled to continuation of your Base
Salary and employee benefits for a period of twelve (12) months immediately following the date of
such termination, the Annual Bonus that you would have been entitled to during
such twelve (12) months assuming all performance targets had been exceeded, and
immediate vesting for all equity awards, including any restricted shares in
accordance with their terms; provided, however, that you comply with your
obligations under Sections 3(e), (including, without limitation, the release
and waiver provision), 4, 5 and 6 hereof.

(d)           In the event that either party
gives notice of the non-renewal of a successive one-year period of your
employment with the Company as provided for in Section 3(a) hereof, or you
voluntarily terminate your employment hereunder and you provide notice thereof,
during the period (or any portion thereof) commencing on the date of such
notice and ending on the date of termination (the “Notice Period”), the
Company may, in its absolute discretion, (i) require you to perform only such
duties as it may allocate to you, (ii) require you not to perform any of your
duties, (iii) require you not to have any contact with customers or clients of
the Company nor any contact (other than purely social contact) with such
employees of the Company as the Company shall determine, (iv)  exclude you from any premises of the Company
and/or (v) require you to resign from all directorships and other offices that
you hold in connection with your employment with the Company (including any
directorships with subsidiaries or other affiliates of the Company) effective
as of any date during the Notice Period. 
If the Company elects to take any such action, such election shall not
constitute a breach by the Company of this Agreement and you shall not have any
claim against the Company in connection therewith so long as, during the Notice
Period, the Company continues to pay to you your accrued and unpaid Base
Salary, afford you all the employee benefits to which you may be entitled under,
and in accordance with the terms of, all employee benefit plans in which you
participate and otherwise comply with the terms of this Agreement.

(e)           Upon termination of your employment
with the Company for any reason, you agree (i) to resign from all directorships
and other offices that you hold in connection with your employment with the
Company (including any directorships with subsidiaries or other affiliates of
the Company) and (ii) to execute a general release and waiver, waiving all
claims you may have against the Company, its affiliates and their respective
successors, assigns, employees, officers, directors, consultants, partners and
shareholders.

(f)            If within the first twelve months
following a Change of Control, (i) the nature or scope of your position,
authority or duties are materially adversely changed, (ii) your compensation is
not paid or is reduced, there is a material adverse change in your employee
benefits or the Company otherwise materially breaches this Agreement or (iii)
you are required by the Company to relocate to a place more than 50 miles from
your current place of employment, then, if you provide the Company with written
notice of your intent to terminate your employment as a result of such event,
providing the specific reasons therefor, and the Company does not make the
necessary corrections within thirty days of receipt of your written notice, you
may terminate your employment within the ten days following the expiration of
such 

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thirty day notice period
and continue to receive your Base Salary and employee benefits for a period of
twelve (12) months immediately
following the date of such termination, the Annual Bonus that you would have
been entitled to during such twelve (12) months assuming all performance
targets had been exceeded, and immediate vesting for all equity awards,
including any restricted shares in accordance with their terms; provided,
however, that you comply with your obligations under Section 3(e), 4, 5 and 6
hereof.  For purposes of this Agreement,
the term “Change in Control” will be deemed to have occurred as of the
first day any of the following events occurs:

(i)                                    Any person or entity is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the U.S. Securities
Exchange Act of 1934, as amended), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally in the election
of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this Section 3(f) (i), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any affiliate of the Company or (D) any acquisition by any entity pursuant
to a transaction which complies with clauses (A), (B) and (C) of Section 3(f)
(iii) hereof;

(ii)                                Individuals who, as of the date of
this Agreement, constitute the Board (hereinafter referred to as the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof 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 shall be considered a member of
the Incumbent Board, excluding any individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person or entity other
than the Board;

(iii)                            Consummation of a reorganization,
merger, share exchange, amalgamation, recapitalization, consolidation or
similar transaction by and among the Company and another person or entity,
including, for this purpose, a transaction as a result of which another person
or entity owns the Company or all or substantially all of the Company’s assets,
either directly or through one or more subsidiaries (a “Business Combination”),
in each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors (or
equivalent management personnel) of the entity resulting from such Business
Combination or that, as a result of such Business Combination, owns the Company
or all or substantially all of the Company’s assets, either directly or through
one or more subsidiaries, in substantially the same proportions as their
ownership of the Outstanding Company Voting Securities immediately prior to
such Business Combination; (B) no person or entity (excluding any entity
resulting from such Business Combination, or that, as a result of such Business
Combination, owns the Company or all or substantially all of the Company’s
assets, either directly or through one or more subsidiaries, or any employee
benefit plan (or related trust) of the foregoing) beneficially owns, directly
or indirectly, 50% or more of the then outstanding shares of common stock or
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election 

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of directors (or equivalent management
personnel) of the entity resulting from such Business Combination or that, as a
result of such Business Combination, owns the Company or all or substantially
all of the Company’s assets, either directly or through one or more
subsidiaries, except to the extent that such ownership existed with respect to
the Company prior to the Business Combination; and (C) at least a majority of
the members of the board of directors (or equivalent management personnel) of
the entity resulting from such Business Combination or that, as a result of
such Business Combination, owns the Company or all or substantially all of the
Company’s assets, either directly or through one or more subsidiaries, were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, pursuant to which such Business
Combination is effected or approved; or

(iv)                              Approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company or the sale or
other disposition of all or substantially all of the Company’s assets.

4.                                      Assignment
of Intellectual Property Rights

(a)           Assignment. 
You hereby assign all of your rights, title and interest to and in all
Intellectual Property Rights (as defined below) conceived, developed, invented,
made by you or otherwise owned by you and directly or indirectly relating to
the Business (defined in Section 7(a)) and you agree and acknowledge that, on
the date hereof, such rights to and in such Intellectual Property Rights shall
become the sole property of, and belong to, the Company.

(b)           Intellectual Property Rights. 
For the purposes of this Agreement, the term “Intellectual Property
Right” shall mean all proprietary and other rights in and to: (i)
trademarks, service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin; (ii) patents,
inventors’ certificates and invention disclosures; (iii) trade secrets and
other confidential or non-public business information, including ideas,
formulae, compositions, inventions, discoveries and improvements, know-how,
manufacturing and production processes and techniques, and research and development
information (whether patentable or not); drawings, specifications, designs,
plans, proposals and technical data; and 

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financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information; (iv) writings and other works of
authorship, whether copyrightable or not, including computer programs, data
bases and documentation therefor, and all copyrights to any of the foregoing;
(v) mask works; (vi) rights, title and interest in know-how, technical
information, processes, practices and systems, whether or not protectable by
patent, copyright or trade secret law; (vii) moral rights; (viii) rights to
limit the use or disclosure of confidential information by any person; (ix) any
similar tangible or intangible intellectual property or proprietary rights,
information and technology; (x) registrations of, and applications to register,
any of the foregoing with any governmental agency or authority and any renewals
or extensions thereof, (xi) the goodwill associated with each of the foregoing
and (xii) any claims or causes of action arising out of or related to any
infringement or misappropriation of any of the foregoing; in each case in any
jurisdiction.

5.                                      Non-Disclosure

(a)           In view of the fact that your work
for the Company will bring you into close contact with many confidential
affairs of the Company not readily available to the public, as well as plans
for future developments, you agree during your employment with the Company and
thereafter:

(i)                                    to keep secret and retain in the
strictest confidence all proprietary or confidential matters or trade secrets
of the Company or any of its subsidiaries and affiliates (which information
will be deemed confidential notwithstanding any prior unauthorized
disclosures), including, but not limited to, data, know-how, formulae,
practices, processes, methodologies, designs, sketches, photographs, plans,
drawings, specifications, samples, reports, member or customer lists, price
lists, business strategies or arrangements, studies, findings, inventions,
ideas, software, source code, business plans and other technical, business or
financial information relating to the Company’s business, whether existing on
the date hereof or hereafter (such material collectively, “Restricted
Material”), and not to disclose such Restricted Material except with the
Company’s permission to such third parties as may be necessary in the
furtherance of the Company’s interests and in the discharge of your duties; and

(ii)                                to deliver promptly to the Company
upon the termination of your employment or at any other time as the Company may
so request, all documents (and all copies thereof), in whatever form,
containing Restricted Material, and all property associated therewith, which you
may then possess or have under your control; provided, however, that
Restricted Material shall not be subject to the confidentiality restrictions of
this Section 5 where you can show that such information is, at the time of
disclosure, generally known to the public.

(b)           In the event that you are requested
or required (by oral questions, interrogatories, requests for information or
documents, subpoena or similar process) to disclose any Restricted Material,
you agree to provide the Company with prompt notice of such request(s) so that
the Company may seek an appropriate protective order or other appropriate
remedy and/or waive 

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your compliance with the
provisions of this Agreement. In the event that such protective order or other
remedy is not obtained, or that the Company grants a waiver hereunder, you may
furnish that portion (and only that portion) of the Restricted Material which
you are legally compelled to disclose and will exercise your reasonable best
efforts to obtain reliable assurance that confidential treatment will be
accorded any Restricted Material so furnished.

(c)           Nothing in this Section 5 shall be
construed as granting or implying any right to you under any patent or
unpatented intellectual property right of the Company, or your right to use any
invention covered thereby.

6.                                      Non-Solicitation

Except with prior
written permission of the Company, you shall not, directly or indirectly
(individually or on behalf of other persons), during your employment with the
Company or any of its affiliates and for a period of twelve (12) months
following the termination of your employment with the Company for any reason,
hire, offer to hire, entice away or in any manner persuade or attempt to
persuade any officer, employee or agent of the Company or any of its affiliates
(including the Company and any subsidiary) or any then current or prospective
customer, client or broker of the Company or any of its affiliates (including
the Company and any subsidiary), to discontinue his or her relationship with
the Company or any of its affiliates (including the Company and any subsidiary)
or to otherwise do business with any competing business of Company or any of
its affiliates (including the Company and any subsidiary).

7.             Non-Competition

(a)           Except with prior written permission
of the Company, you shall not, during your employment with the Company or any
of its affiliates, and for the six (6) month period following the termination
of your employment, for any reason directly or indirectly (individually or on
behalf of other persons): (i) enter the employ of, or render services to, as a
senior executive or in a managerial capacity, any person, firm or corporation
engaged in the insurance or reinsurance business or any other business in which
the Company is, or has announced an intention to become, engaged in at any time
during your employment with the Company and in each case within any State in
the United States in which Company or any of its affiliates (including the
Company and any subsidiary) does business (hereinafter collectively referred to
as the “Business”); (ii) engage in such Business on your own account; or
(iii) become involved in any such Business, directly or indirectly, as an
owner, partner, shareholder, member, director, officer, principal or
consultant; provided, however, that nothing contained in this Section 7
shall be deemed to prohibit you from acquiring, solely as a passive investment,
no more than 5% of the total outstanding securities of any publicly-held
corporation.

(b)           The provisions of this Section 7
shall not apply following your termination of employment should (i) the Company
issue a Notice of Non-Renewal as provided for in Section 3(a); (ii) in the
event of the termination of your employment by the Company without cause
pursuant to Section 3(a)(iv) of this Agreement; (iii) in the event of the
termination of this Agreement pursuant to Section 3(f); or
(iv) should the Company default in any of its post-termination obligations as
provided for in this Agreement.

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8.                                      Enforcement

(a)           The parties hereto hereby declare
that it is impossible to measure in money the damages that will accrue to the
Company by reason of your failure to perform any of your obligations under
Sections 4, 5, 6 and 7. Accordingly, if the Company institutes any action or
proceeding to enforce the provisions hereof, to the extent permitted by
applicable law, you hereby waive the claim or defense that the Company has an
adequate remedy at law, and you shall not urge in any such action or proceeding
the defense that any such remedy exists at law. The foregoing rights shall be
in addition to any other rights and remedies available to the Company under law
or in equity.

(b)           If any of the covenants contained
in Sections 4, 5, 6 and 7 or any part thereof, is construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portion(s). In addition, if any of the covenants contained in Sections 4, 5, 6
and 7 hereof, or any part thereof, is held by any person or entity with
jurisdiction over the matter to be invalid or unenforceable because of duration
of such provision or the geographical area covered thereby, the parties agree
that such person or entity shall have the power to reduce the duration and/or
geographical area of such provision and, in its reduced form, said provisions
shall then be enforceable.

(c)           It is understood and agreed that no
failure or delay by the Company in exercising any right, power or privilege
contained in Sections 4, 5, 6 and 7 shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege contained in
Sections 4, 5, 6 and 7.

9.                                      Dispute
Resolution

In the event of any
dispute or difference between you and the Company with respect to either the
enforcement or interpretation of this Agreement, both you and the Company agree
to resolve any such dispute or difference by the terms and conditions set forth
in the Company’s Dispute Resolution Guidelines. By executing this Agreement,
you acknowledge receiving and reviewing Company’s Dispute Resolution
Guidelines.

10.                               Miscellaneous

(a)           Any notice or other communication
required or permitted under this Agreement shall be effective only if it is in
writing and shall be deemed to be given when delivered personally or three days
after it is mailed by registered or certified mail, postage prepaid, return
receipt requested or one day after it is sent by a reputable overnight courier
service and, in each case, addressed to the relevant party at the address
provided for such party on the first page hereof, or to such other address as
any party hereto may designate by notice to the other in accordance with the
foregoing.

(b)           This Agreement constitutes the
entire agreement among you and the Company with respect to your employment by
the Company, and supersedes and is in full substitution for any and all prior
understandings or agreements with respect to your employment.

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(c)           This Agreement may be amended only
by an instrument in writing signed by the parties hereto, and any provision
hereof may be waived only by an instrument in writing signed by the party
against whom or which enforcement of such waiver is sought.

(d)           This Agreement and all rights and
obligations hereunder, including, without limitation, matters of construction,
validity and performance, shall be governed by and construed and interpreted in
accordance with the laws of New York without regard to principles of conflict
of laws.

(e)           In the event of any contest or
dispute between you and the Company with respect to this Agreement, each of the
parties shall be responsible for their respective legal fees and expenses in
accordance with the Company’s Dispute Resolution Guidelines.

(f)            This Agreement shall inure for the
benefit of and be an obligation of the Company’s assigns and successors; provided,
however, that you may not assign your duties and obligations hereunder to any
other party.

(g)           The headings in this Agreement are
inserted for convenience of reference only and shall not be a part of or
control or affect the meaning of any provision hereof.

If the terms of
this Agreement meet with your approval, please sign and return one copy to the
Company.

	
   

  	
  Sincerely,

  	
   

  	
   

  
	
   

  	
  AXIS SPECIALTY
  U.S. SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ John Charman

  
	
   

  	
  Name:

  	
   

  	
  John Charman

  
	
   

  	
  Title:

  	
   

  	
  CEO and
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted and Agreed

  	
   

  	
   

  	
   

  
	
  as of the date first set forth above:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ David B. Greenfield

  	
   

  	
   

  	
   

  
						

 

 

 10Exhibit 10.3

AXIS CAPITAL HOLDINGS LIMITED

96 PITTS BAY ROAD

PEMBROKE, BERMUDA  HM08

September 8, 2006

Mr.  Brian W. Goshen

96 Pitts Bay Road

Pembroke, Bermuda  HM08

Dear Brian:

We are delighted
that you have decided to join AXIS Capital Holdings Limited, a holding company
domiciled in Bermuda (the “Company”). We thought it would be useful to
lay out the terms and conditions of our agreement in this letter agreement
(this “Agreement”).  This
Agreement is dated as of September 8, 2006.

1.                                      Employment.

The Company hereby
agrees to employ you in the position of Chief Human Resources Officer of the
Company or in such other position as is mutually agreeable to you and the
Company.  You will report to the Chief
Executive Officer and President of the
Company. You will be expected to devote your full business time and energy,
attention, skills and ability to the performance of your duties and
responsibilities to the Company on an exclusive basis, including service to
subsidiaries and affiliates of the Company as requested by the Board of
Directors of the Company (the “Board”), and shall faithfully and
diligently endeavor to promote the business and best interests of the Company
and its subsidiaries and affiliates. 
Anything herein to the contrary notwithstanding, nothing shall preclude
you from (i) serving on the boards of directors of a reasonable number of other
corporations or the boards of a reasonable number of trade associations and/or
charitable organizations, (ii) engaging in charitable, community and other business
affairs and (iii) managing your personal investments and affairs; provided such
activities do not, in the reasonable judgment of the Company, adversely impact your ability to properly perform your
responsibilities and duties hereunder.

2.             Compensation
and Benefits.

(a)           During your employment with the
Company, your annual base salary shall be $280,000 (the base salary as may be
increased from time to time “Base Salary”) and shall be paid pursuant to
the Company’s customary payroll practices. The Base Salary will be reviewed
annually and may be increased in the sole discretion of the Company.

(b)           In addition to the Base Salary, in
each fiscal year of the Company during your employment with the Company, you
will have the opportunity to earn an annual cash bonus (“Annual Bonus”)
if the Company achieves certain performance objectives and subject to your 

 

individual performance (each of which will be determined by the
Company for each such fiscal year). The Annual Bonus for each period will be
paid only if you are actively employed with the Company on the date on which
bonuses are disbursed to similarly situated senior executives.

(c)           Following the execution of this
Agreement, Company shall grant you an award of five thousand (5,000) restricted
shares of the Common Stock (“Restricted Shares”) of Company pursuant to
the Company Equity Plan.  The Restricted
Shares will vest on the third anniversary of the date of grant provided you
have remained employed by the Company until such date and as otherwise set
forth in the Company Equity Plan and the award agreement. Prior to vesting, the
Restricted Shares shall be non-transferable and, if your employment terminates
prior to vesting of the Restricted Shares in accordance with Section 3(b), the
Restricted Shares shall be forfeited. 
All other terms and conditions shall be provided in the Company Equity
Plan and the award agreement.

(d)           During your employment with the
Company, you will be entitled to participate generally in the benefit plans
made available to senior executives of the Company to include a bi-annual
Executive Physical Program, in accordance with the terms of those plans.

(e)           During your employment with the
Company, you will be entitled to 25 working days of paid vacation per calendar
year.

(f)            During your employment with the
Company, the Company will reimburse you for all reasonable business expenses
incurred by you in the course of performing your 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, subject to
the Company’s requirements with respect to reporting and documentation of
expenses.  Such reimbursements shall also
include any fees or other expenses, including legal expenses, in connection
with obtaining and maintaining a work permit from the Bermuda government
authority if required and reimbursements on an after-tax basis, and for
reasonable expenses incurred in traveling between Bermuda and the United States.

(g)           During your employment with the
Company, the Company will reimburse you on an after-tax basis for the costs of
suitable accommodations and related expenses while working in Bermuda,
including reimbursement for the use of an automobile, if necessary, as approved
by the President and CEO.

(h)           During your employment with the
Company, and subject to the Company’s prior review and approval, you will be
reimbursed by the Company for the initiation fees (not to exceed USD $10,000)
and annual membership fees of one private club; provided, however, that
the Company shall have no other obligations to you relating to any other costs
of your membership in that private club.

(i)            During your employment with the
Company, the Company will reimburse you for reasonable costs incurred for preparation
of annual tax returns and associated tax planning, not to exceed US$5,000 per
year.

 2
 

 

 

3.                                      Term
of Employment

(a)           The employment period shall
commence on September 8, 2006 and shall terminate on the day preceding the
third anniversary thereof; provided, however, that the term of
employment shall automatically be extended for successive one-year periods
unless either party shall give at least six (6) months’ prior written notice of
non-renewal. Notwithstanding the foregoing, your employment hereunder will be
terminated upon the earliest to occur of the following events:

(i)                                    Death. 
Your employment shall automatically terminate upon your death.

(ii)                                Disability. 
The Company shall be entitled to terminate your employment if, as a
result of your incapacity due to physical or mental illness or injury, you
shall have been unable to perform your duties hereunder for a period of 181
days in any twelve-month period.

(iii)                            Cause. 
The Company may terminate your employment for Cause which, for purposes
of this Agreement, shall mean (A) any act or omission which constitutes a
material and substantial breach by you of the terms of this Agreement that
adversely impacts the business or reputation of the Company, (B) the conviction
of a felony or commission of any act which would rise to the level of a felony,
(C) the conviction or commission of a lesser crime or offense that adversely
impacts or potentially could impact upon the business or reputation of the
Company, and/or affiliates and subsidiaries in a material way, (D) your willful
violation of specific lawful directives of the Company, (E) commission of a
dishonest or wrongful act involving fraud, misrepresentation, or moral
turpitude causing damage or potential damage to the Company, and/or affiliates
and subsidiaries, (F) the willful failure to perform a substantial part of your
duties, (G) breach of fiduciary duty.

(iv)                              Without Cause. 
The Company may terminate your employment at any time without Cause; provided,
however, that the Company provides you with notice of its intent to terminate
at least 30 days in advance of the date of termination.  Termination without Cause shall include the
Company’s non-renewal of a successive one-year period of your employment with
the Company as provided for in this Section 3(a).

(v)                                  Voluntary Resignation. 
You may voluntarily terminate your employment hereunder; provided,
however, that you provide the Company with notice of your intent to terminate
at least six (6) months in
advance of the date of termination. 
Voluntary Resignation shall include your non-renewal of a successive
one-year period of your employment with the Company as provided for in this
Section 3(a).

(b)           In the event that your employment
with the Company shall terminate pursuant to Sections 3(a)(i), (ii), (iii), or
(v), the Company’s sole obligation under the Agreement shall be to (i) pay to
you any accrued and unpaid Base Salary through the date of termination of
employment, and an amount equal to such reasonable and necessary unreimbursed
business expenses incurred by you on behalf of Company on or prior to the date
of termination of 

 3
 

 

employment and (ii) afford
you all the employee benefits to which you may be entitled under, and in
accordance with the terms of, all employee benefit plans in which you
participate.

(c)           In the event that your employment
with the Company terminates in accordance with the provisions of Section
3(a)(iii) — for Cause, or 3(a)(iv) - Without Cause hereof, you shall be
entitled to continuation of your Base Salary and employee benefits for a period
of six (6) months immediately following the date of such termination provided,
however, that you comply with your obligations under Sections 3(e), (including,
without limitation, the release and waiver provision), 4, 5, 6 and 7 hereof.

(d)           In the event that your employment
with the Company terminates in accordance with the provisions of Section
3(a)(iv) — Without Cause hereof, you shall be entitled to vesting for all
equity awards, including any restricted shares in accordance with their terms;
provided, however, that you comply with your obligations under Sections 3(e), (including,
without limitation, the release and waiver provision), 4, 5, 6 and 7 hereof.

(e)           In the event that either party
gives notice of the non-renewal of a successive one-year period of your
employment with the Company as provided for in Section 3(a) hereof, or you
voluntarily terminate your employment hereunder and you provide notice thereof,
during the period (or any portion thereof) commencing on the date of such
notice and ending on the date of termination (the “Notice Period”), the
Company may, in its absolute discretion, (i) require you to perform only such
duties as it may allocate to you, (ii) require you not to perform any of your
duties, (iii) require you not to have any contact with customers or clients of
the Company nor any contact (other than purely social contact) with such
employees of the Company as the Company shall determine, (iv)  exclude you from any premises of the Company
and/or (v) require you to resign from all directorships and other offices that
you hold in connection with your employment with the Company (including any
directorships with subsidiaries or other affiliates of the Company) effective
as of any date during the Notice Period. 
If the Company elects to take any such action, such election shall not
constitute a breach by the Company of this Agreement and you shall not have any
claim against the Company in connection therewith so long as, during the Notice
Period, the Company continues to pay to you your accrued and unpaid Base
Salary, afford you all the employee benefits to which you may be entitled
under, and in accordance with the terms of, all employee benefit plans in which
you participate and otherwise comply with the terms of this Agreement.

(f)            Upon termination of your employment
with the Company for any reason, you agree (i) to resign from all directorships
and other offices that you hold in connection with your employment with the
Company (including any directorships with subsidiaries or other affiliates of
the Company) and (ii) to execute a general release and waiver in a form of
which to be agreed by the parties to this Agreement, waiving all claims you may
have against the Company, its affiliates and their respective successors,
assigns, employees, officers, directors, consultants, partners and
shareholders; provided, however, that the requirement to execute a general
release and waiver shall not apply to a voluntary resignation pursuant to
Section 3(a)(v) of this Agreement.

 4
 

 

 

(g)           If within the first twelve months
following a Change of Control, (i) the nature or scope of your position,
authority or duties are materially changed, (ii) your compensation is not paid
or is reduced, there is a material adverse change in your employee benefits or
the Company otherwise materially breaches this Agreement or (iii) you are
required by the Company to relocate to a place more than 50 miles from your
current place of employment then, if you provide the Company with written
notice of your intent to terminate your employment as a result of such event,
providing the specific reasons therefor, and the Company does not make the
necessary corrections within thirty days of receipt of your written notice, you
may terminate your employment within the ten days following the expiration of
such thirty day notice period and continue to receive your Base Salary and
employee benefits for a period of twelve (12) months immediately following the date of such termination, the Annual
Bonus that you would have been entitled to during such twelve (12) months
assuming all performance targets had been exceeded; provided, however,
that you comply with your obligations under Section 3(e), 4, 5, 6 and 7
hereof.  For purposes of this Agreement,
the term “Change in Control” will be deemed to have occurred as of the
first day any of the following events occurs:

(i)                                    Any person or entity is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the U.S. Securities
Exchange Act of 1934, as amended), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally in the election
of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this Section 3(f) (i), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any affiliate of the Company or (D) any acquisition by any entity pursuant
to a transaction which complies with clauses (A), (B) and (C) of Section 3(f)
(iii) hereof;

(ii)                                Individuals who, as of the date of
this Agreement, constitute the Board (hereinafter referred to as the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof 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 shall be considered a member of
the Incumbent Board, excluding any individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person or entity other
than the Board;

(iii)                            Consummation of a reorganization,
merger, share exchange, amalgamation, recapitalization, consolidation or
similar transaction by and among the Company and another person or entity,
including, for this purpose, a transaction as a result of which another person
or entity owns the Company or all or substantially all of the Company’s assets,
either 

 5
 

 

directly or through one or more subsidiaries
(a “Business Combination”), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors (or equivalent management personnel) of the entity
resulting from such Business Combination or that, as a result of such Business
Combination, owns the Company or all or substantially all of the Company’s
assets, either directly or through one or more subsidiaries, in substantially
the same proportions as their ownership of the Outstanding Company Voting
Securities immediately prior to such Business Combination; (B) no person or
entity (excluding any entity resulting from such Business Combination, or that,
as a result of such Business Combination, owns the Company or all or
substantially all of the Company’s assets, either directly or through one or
more subsidiaries, or any employee benefit plan (or related trust) of the
foregoing) beneficially owns, directly or indirectly, 50% or more of the then
outstanding shares of common stock or the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors (or equivalent management personnel) of the entity resulting from
such Business Combination or that, as a result of such Business Combination,
owns the Company or all or substantially all of the Company’s assets, either
directly or through one or more subsidiaries, except to the extent that such
ownership existed with respect to the Company prior to the Business
Combination; and (C) at least a majority of the members of the board of
directors (or equivalent management personnel) of the entity resulting from
such Business Combination or that, as a result of such Business Combination,
owns the Company or all or substantially all of the Company’s assets, either
directly or through one or more subsidiaries, were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action
of the Board, pursuant to which such Business Combination is effected or
approved; or

(iv)                              Approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company or the sale or
other disposition of all or substantially all of the Company’s assets.

4.                                      Assignment
of Intellectual Property Rights

(a)           Assignment. 
You hereby assign all of your rights, title and interest to and in all
Intellectual Property Rights (as defined below) conceived, developed, invented,
made by you or otherwise owned by you and directly or indirectly relating to
the Business (defined in Section 7(a)) and you agree and acknowledge that, on
the date hereof, such rights to and in such Intellectual Property Rights shall
become the sole property of, and belong to, the Company.

 6
 

 

 

(b)           Intellectual Property Rights. 
For the purposes of this Agreement, the term “Intellectual Property
Right” shall mean all proprietary and other rights in and to: (i)
trademarks, service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin; (ii) patents,
inventors’ certificates and invention disclosures; (iii) trade secrets and
other confidential or non-public business information, including ideas,
formulae, compositions, inventions, discoveries and improvements, know-how,
manufacturing and production processes and techniques, and research and
development information (whether patentable or not); drawings, specifications,
designs, plans, proposals and technical data; and financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information; (iv) writings and other works of
authorship, whether copyrightable or not, including computer programs, data
bases and documentation therefor, and all copyrights to any of the foregoing;
(v) mask works; (vi) rights, title and interest in know-how, technical information,
processes, practices and systems, whether or not protectable by patent,
copyright or trade secret law; (vii) moral rights; (viii) rights to limit the
use or disclosure of confidential information by any person; (ix) any similar
tangible or intangible intellectual property or proprietary rights, information
and technology; (x) registrations of, and applications to register, any of the
foregoing with any governmental agency or authority and any renewals or
extensions thereof, (xi) the goodwill associated with each of the foregoing and
(xii) any claims or causes of action arising out of or related to any
infringement or misappropriation of any of the foregoing; in each case in any
jurisdiction.

5.                                      Non-Disclosure

(a)           In view of the fact that your work
for the Company will bring you into close contact with many confidential
affairs of the Company not readily available to the public, as well as plans
for future developments, you agree during your employment with the Company and
thereafter:

(i)                                    to keep secret and retain in the
strictest confidence all proprietary or confidential matters or trade secrets
of the Company or any of its subsidiaries and affiliates (which information
will be deemed confidential notwithstanding any prior unauthorized
disclosures), including, but not limited to, data, know-how, formulae,
practices, processes, methodologies, designs, sketches, photographs, plans,
drawings, specifications, samples, reports, member or customer lists, price
lists, business strategies or arrangements, studies, findings, inventions,
ideas, software, source code, business plans and other technical, business or
financial information relating to the Company’s business, whether existing on
the date hereof or hereafter (such material collectively, “Restricted
Material”), and not to disclose such Restricted Material except with the
Company’s permission to such third parties as may be necessary in the
furtherance of the Company’s interests and in the discharge of your duties; and

(ii)                                to deliver promptly to the Company upon
the termination of your employment or at any other time as the Company may so
request, all documents (and all copies thereof), in whatever form, containing
Restricted Material, and all property associated therewith, which you may then
possess or have under your control; provided, however, that 

 7
 

 

Restricted Material shall not be subject to
the confidentiality restrictions of this Section 5 where you can show that such
information is, at the time of disclosure, generally known to the public.

(b)           In the event that you are requested
or required (by oral questions, interrogatories, requests for information or
documents, subpoena or similar process) to disclose any Restricted Material,
you agree to provide the Company with prompt notice of such request(s) so that
the Company may seek an appropriate protective order or other appropriate
remedy and/or waive your compliance with the provisions of this Agreement. In
the event that such protective order or other remedy is not obtained, or that
the Company grants a waiver hereunder, you may furnish that portion (and only
that portion) of the Restricted Material which you are legally compelled to
disclose and will exercise your reasonable best efforts to obtain reliable
assurance that confidential treatment will be accorded any Restricted Material
so furnished.

(c)           Nothing in this Section 5 shall be
construed as granting or implying any right to you under any patent or
unpatented intellectual property right of the Company, or your right to use any
invention covered thereby.

6.                                      Non-Solicitation

Except with prior written
permission of the Company, you shall not, directly or indirectly (individually
or on behalf of other persons), during your employment with the Company or any
of its affiliates and for a period of six (6) months following the termination
of your employment with the Company for any reason, hire, offer to hire, entice
away or in any manner persuade or attempt to persuade any officer, employee or
agent of the Company or any of its affiliates (including the Company and any
subsidiary) or any then current or prospective customer, client or broker of
the Company or any of its affiliates (including the Company and any
subsidiary), to discontinue his or her relationship with the Company or any of
its affiliates (including the Company and any subsidiary) or to otherwise do
business with any competing business of Company or any of its affiliates
(including the Company and any subsidiary).

7.                                      Non-Competition

(a)           Except with prior written
permission of the Company, you shall not, during your employment with the
Company or any of its affiliates, and for the six (6) month period following
the termination of your employment, for any reason directly or indirectly
(individually or on behalf of other persons): (i) enter the employ of, or
render services to, as a senior executive or in a managerial capacity, any
person, firm or corporation engaged in the insurance or reinsurance business or
any other business in which the Company is, or has announced an intention to
become, engaged in at any time during your employment with the Company and in
each case within any State in the United States in which Company or any of its
affiliates (including the Company and any subsidiary) does business
(hereinafter collectively referred to as the “Business”); (ii) engage in
such Business on your own account; or (iii) become involved in any such
Business, directly or indirectly, as an owner, partner, shareholder, member,
director, officer, principal or consultant; provided, however, that
nothing contained in this Section 7 shall be deemed to prohibit you from
acquiring, solely as a passive investment, no more than 5% of the total
outstanding securities of any publicly-held corporation.

 8
 

 

 

(b)           The provisions of this Section 7
shall not apply following your termination of employment should (i) the Company
issue a Notice of Non-Renewal as provided for in Section 3(a); (ii) you
voluntarily resign under Section 3(a)(v) for which you provided six (6) months
notice; or (iii) the Company
default in any of its post-termination obligations as provided for in this
Agreement.

8.                                      Enforcement

(a)           The parties hereto hereby declare
that it is impossible to measure in money the damages that will accrue to the
Company by reason of your failure to perform any of your obligations under
Sections 4, 5, 6 and 7. Accordingly, if the Company institutes any action or
proceeding to enforce the provisions hereof, to the extent permitted by
applicable law, you hereby waive the claim or defense that the Company has an
adequate remedy at law, and you shall not urge in any such action or proceeding
the defense that any such remedy exists at law. The foregoing rights shall be
in addition to any other rights and remedies available to the Company under law
or in equity.

(b)           If any of the covenants contained
in Sections 4, 5, 6 and 7 or any part thereof, is construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portion(s). In addition, if any of the covenants contained in Sections 4, 5, 6
and 7 hereof, or any part thereof, is held by any person or entity with
jurisdiction over the matter to be invalid or unenforceable because of duration
of such provision or the geographical area covered thereby, the parties agree
that such person or entity shall have the power to reduce the duration and/or
geographical area of such provision and, in its reduced form, said provisions
shall then be enforceable.

(c)           It is understood and agreed that no
failure or delay by the Company in exercising any right, power or privilege
contained in Sections 4, 5, 6 and 7 shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege contained in
Sections 4, 5, 6 and 7.

9.                                      Dispute
Resolution

In the event of
any dispute or difference between you and the Company with respect to either
the enforcement or interpretation of this Agreement, both you and the Company
agree to resolve any such dispute or difference by the terms and conditions set
forth in the Company’s Dispute Resolution Guidelines. By executing this
Agreement, you acknowledge receiving and reviewing Company’s Dispute Resolution
Guidelines.

10.                               Miscellaneous

(a)           Any notice or other communication
required or permitted under this Agreement shall be effective only if it is in
writing and shall be deemed to be given when delivered personally or three days
after it is mailed by registered or certified mail, postage prepaid, return
receipt requested or one day after it is sent by a reputable overnight courier
service and, in each case, addressed to the relevant party at the address
provided for such party on the first page hereof, or to such other address as
any party hereto may designate by notice to the other in accordance with the
foregoing.

 9
 

 

 

(b)           This Agreement constitutes the
entire agreement among you and the Company with respect to your employment by
the Company, and supersedes and is in full substitution for any and all prior
understandings or agreements with respect to your employment.

(c)           This Agreement may be amended only
by an instrument in writing signed by the parties hereto, and any provision
hereof may be waived only by an instrument in writing signed by the party
against whom or which enforcement of such waiver is sought.

(d)           This Agreement and all rights and
obligations hereunder, including, without limitation, matters of construction,
validity and performance, shall be governed by and construed and interpreted in
accordance with the laws of Georgia without regard to principles of conflict of
laws.

(e)           In the event of any contest or
dispute between you and the Company with respect to this Agreement, each of the
parties shall be responsible for their respective legal fees and expenses in
accordance with the Company’s Dispute Resolution Guidelines.

(f)            This Agreement shall inure for the
benefit of and be an obligation of the Company’s assigns and successors; provided,
however, that you may not assign your duties and obligations hereunder to any
other party.

(g)           The headings in this Agreement are
inserted for convenience of reference only and shall not be a part of or
control or affect the meaning of any provision hereof.

If the terms of
this Agreement meet with your approval, please sign and return one copy to the
Company.

	
   

  	
  Sincerely,

  	
   

  	
   

  
	
   

  	
  AXIS SPECIALTY
  U.S. SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ John Charman

  
	
   

  	
  Name:

  	
   

  	
  John Charman

  
	
   

  	
  Title:

  	
   

  	
  CEO and
  President

  
						

 

	
  Accepted and Agreed

  	
   

  
	
  as of the date first set forth above:

  	
   

  
	
   

  	
   

  
	
  /s/ Brian W. Goshen

  	
   

  

 

 10

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