Document:

EX-10.1

Exhibit 10.1

May 21, 2008

Peter D. Johnson

Chief Executive Officer

c/o Quanta Capital Holdings Ltd.

22 Church Street,

Penthouse

Hamilton HM 11

Bermuda

Re: 280G Tax Gross-Up Agreement

Dear Peter:

     1. In consideration of your continued employment with Quanta Capital Holdings Ltd., a company
organized under the laws of Bermuda (“Quanta”) after the date hereof, in the event that it shall be
determined that any amount or benefit (including any cash out of stock options) that is paid or
distributed to you by Quanta, any affiliated company, any person who acquires ownership or
effective control of Quanta or ownership of a substantial portion of Quanta’s assets (within the
meaning of Section 280G of the U.S. Internal Revenue Code or 1986, as amended (the “Code”), and the
regulations thereunder) or any affiliate of such person (collectively, the “Covered Payments” and
such acquisition, the “Transaction”) would be subject to the excise tax imposed under Section 4999
of the Code or any interest or penalties with respect to such excise tax, or any similar tax that
may hereafter be imposed (such excise tax, any such interest or penalties, and any such similar tax
are collectively referred to as the “Excise Tax”), Quanta shall pay to you at the time specified in
this letter agreement (the “Agreement”) an additional amount (the “Gross-Up Payment”) such that the
net amount retained by you with respect to such Covered Payments, after deduction of any Excise Tax
on the Covered Payments and any U.S. federal, state and local income or employment tax and Excise
Tax on the Gross-Up Payment provided for by this Agreement, but before deduction for any U.S.
federal, state or local income or employment tax withholding (or similar tax withholding under laws
of a jurisdiction outside of the U.S.) on such Covered Payments, shall be equal to the amount of
the Covered Payments.

     2. All determinations and calculations required to be made under this Agreement shall be made
in accordance with the principles of Section 280G of the Code by an independent accounting firm in
the United States selected by you and reasonably acceptable to Quanta (the “Accounting Firm”). In
the event that the Accounting Firm is serving as accountant or auditor to the individual entity or
group effecting the transaction or event that gives rise to

Quanta Capital Holdings Ltd. 22 Church Street, Penthouse, Hamilton HM 11, Bermuda

Tel: 441-294-6350 Fax: 441-294-6390 www.quantaholdings.com

 

 

the obligation to make the Covered
Payment, you shall appoint another
accounting firm reasonably acceptable to Quanta to make the determination required (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All reasonable fees
and expenses of the Accounting Firm shall be borne solely by you. The Accounting Firm shall
provide its determination (the “Determination”), together with detailed supporting calculations
regarding the amount of any Gross-Up Payment and any other relevant matter, to you and Quanta
within ten business days of the receipt of notice from you that there has been made or will be made
a Covered Payment, or such earlier time as is requested by Quanta. If the Accounting Firm
determines that no Excise Tax is payable by you, it shall furnish you with a written statement that
it has concluded that no Excise Tax is payable (including the reasons therefor) and that you have
substantial authority not to report any Excise Tax on your U.S. federal income tax return. If a
Gross-Up Payment is determined to be payable, it shall be paid to you at such time as is provided
in this Agreement. Any determination by the Accounting Firm shall be binding upon Quanta and you,
absent manifest error.

     3. For purposes of determining the amount of the Gross-Up Payment, you shall be deemed to pay:
(a) U.S. federal income taxes at the highest applicable marginal rate of U.S. federal income
taxation for the calendar year in which the Gross-Up Payment is to be made; and (b) any applicable
state, local and non-U.S. income taxes at the highest applicable marginal rate of taxation for the
calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in U.S.
federal income taxes which could be obtained from the deduction of such state, local or non-U.S.
taxes if paid in such year.

     4. In the event that the Excise Tax is subsequently determined by the Accounting Firm or
pursuant to any proceeding or negotiations with the Internal Revenue Service to be less than the
amount taken into account hereunder in calculating the Gross-Up Payment made, you shall repay to
Quanta, at the time that the amount of such reduction in the Excise Tax is finally determined, the
portion of such prior Gross-Up Payment that would not have been paid if such Excise Tax had been
applied in initially calculating such Gross-Up Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code (an “Overpayment”). In the
case of an Overpayment, you shall, at the direction and expense of Quanta, take such steps as are
reasonably necessary (including the filing of returns and claims for refund), follow reasonable
instructions from, and procedures established by, Quanta, and otherwise reasonably cooperate with
Quanta to obtain a refund for the excess amount. Notwithstanding the foregoing, in the event of an
Overpayment that has been paid to any U.S. federal, state, local or non-U.S. tax authority,
repayment thereof shall not be required until actual refund or credit of such portion has been made
to you, and interest payable to

Quanta Capital Holdings Ltd. 22 Church Street, Penthouse, Hamilton HM 11, Bermuda

Tel: 441-294-6350 Fax: 441-294-6390 www.quantaholdings.com

 

 

Quanta shall not exceed interest received or credited to you by
such tax authority for the period it held such portion. You and Quanta shall mutually
agree upon the course of action to be pursued (and the method of allocating the expenses
thereof) if your good faith claim for refund or credit is denied.

     5. In the event that the Excise Tax is later determined by the Accounting Firm or pursuant to
any proceeding or negotiations with the Internal Revenue Service to exceed the amount taken into
account hereunder at the time the Gross-Up Payment is made (including, but not limited to, by
reason of any payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), Quanta shall promptly make an additional Gross-Up Payment in respect of such
excess (plus any interest or penalty payable with respect to such excess) at the time that the
amount of such excess is finally determined.

     6. The Gross-Up Payment (or portion thereof) provided for in this Agreement shall be paid to
you not later than ten (10) business days following the date the Determination has been delivered
to you or Quanta; provided that such Gross-Up Payment shall in no event be made earlier than the
date of the closing of the Transaction (the “Payment Date”). Notwithstanding the immediately
preceding sentence, if the amount of such Gross-Up Payment (or portion thereof) cannot be finally
determined on or before the date on which payment is due, Quanta shall pay to you on the Payment
Date an amount estimated in good faith by the Accounting Firm to be the minimum amount of such
Gross-Up Payment and shall pay the remainder of such Gross-Up Payment (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined, provided that the entire amount of the Gross-Up Payment shall in all events be paid no
later than the end of your taxable year next following your taxable year in which the Excise Tax
(and any income or other related taxes or interest or penalties thereon) on a Covered Payment are
remitted to the Internal Revenue Service or any other applicable taxing authority. In the event
that the amount of the estimated Gross-Up Payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by Quanta to you, payable on the fifth (5th)
business day after written demand by Quanta for payment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).

     7. To the extent that the Gross-Up Payment is subject to Section 409A of the Code, it shall be
paid in a manner that will comply with Section 409A of the Code, including the regulations or any
other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with
respect thereto (the “Guidance”). Quanta reserves the right, to the extent Quanta deems necessary
or advisable in its sole discretion, to unilaterally amend or modify this Agreement as may be
necessary to ensure that all benefits provided

Quanta Capital Holdings Ltd. 22 Church Street, Penthouse, Hamilton HM 11, Bermuda

Tel: 441-294-6350 Fax: 441-294-6390 www.quantaholdings.com

 

 

under this Agreement are made in a manner that
qualifies for exemption from or complies with Section 409A of the Code (which amendment may be
retroactive to the extent permitted by the Guidance); provided, however, that
Quanta makes no representations that the compensation or benefits provided under this
Agreement will be exempt from Section 409A of the Code and makes no undertakings to preclude
Section 409A of the Code from applying to the benefits provided under this Agreement.

     8. This Agreement and all disputes or controversies arising out of or relating to this
Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and
governed by and in accordance with the internal laws of the State of New York without regard to
principles of conflicts of law that would apply any other law.

     9. The parties hereby irrevocably submit to the jurisdiction of the courts of the Borough of
Manhattan, State of New York and the Federal courts of the United States of America located in the
State of New York solely in respect of the interpretation and enforcement of the provisions of this
Agreement, and hereby waive, and agree not to assert as a defense in any action, suit or proceeding
for the interpretation or enforcement hereof or of any such document, that it is not subject
thereto or that such action, suit or proceeding may not be brought or is not maintainable in said
courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced
in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such
action or proceeding shall be heard and determined in such a New York State or Federal court. The
parties hereby consent to and grant any such court jurisdiction over the person of such parties
and, to the extent permitted by law, over the subject matter of such dispute and agree that mailing
of process or other papers in connection with any such action or proceeding in the manner provided
in this Section 9 or in such other manner as may be permitted by law shall be valid and sufficient
service thereof.

     10. All notices, requests, instructions or other documents to be given under this Agreement
shall be in writing and shall be deemed given (a) when sent if sent by facsimile or email; provided
that the receipt of such fax or email is promptly confirmed in writing or by telephone confirmation
thereof, (b) when delivered, if delivered personally to the intended recipient and (c) two business
days following sending by overnight delivery via a national or international courier service, and
in each case, addressed to a party at the following address for such party:

if to Quanta:

Quanta Capital Holdings Ltd.

22 Church Street,

Quanta Capital Holdings Ltd. 22 Church Street, Penthouse, Hamilton HM 11, Bermuda

Tel: 441-294-6350 Fax: 441-294-6390 www.quantaholdings.com

 

 

Penthouse

Hamilton HM 11

Bermuda

Attention: Chief Executive Officer

if to you:

Peter D. Johnson

36 Hubbard Avenue

Red Bank, New Jersey 07701

or to such other address as the person to whom notice is given may have previously furnished to the
other in writing in the manner set forth above.

     10. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, successors and assigns. Neither this
Agreement nor any right or interest hereunder shall be assignable or transferable by you or your
beneficiaries or legal representatives, except by will or by the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by your legal personal
representative.

     11. This Agreement represents the entire Agreement and understanding between Quanta and you
concerning the Gross-Up Payment. This Agreement supersedes any prior agreement or understanding of
the parties with respect to the subject matter hereof.

     12. No provision of this Agreement may be amended unless and to the extent such amendment is
agreed to in writing and signed by both you and an authorized officer of Quanta. No waiver by
either party of any breach by the other party of any condition, obligation, performance or
provision contained in this Agreement shall be deemed a waiver of a similar or dissimilar condition
or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed
by the party to be charged with the waiver.

     13. If any provision of this Agreement of the application thereof to any person, place, or
circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable, or
voice, the remainder of this Agreement and such provisions as applied to other persons, places, and
circumstances shall remain in full force and effect.

     14. This Agreement may be executed in counterparts, and each counterpart shall have the same
force and effect as the original and shall constitute an effective, binding agreement on the part
of each of the undersigned.

Quanta Capital Holdings Ltd. 22 Church Street, Penthouse, Hamilton HM 11, Bermuda

Tel: 441-294-6350 Fax: 441-294-6390 www.quantaholdings.com

 

 

     15. If any legal action, arbitration or other proceeding is brought to interpret or enforce
the terms of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys’ fees and any other costs incurred in that proceeding, in addition to any other
relief to which it is entitled.

IN WITNESS WHEREOF, the undersigned have executed this Agreement.

QUANTA CAPITAL HOLDINGS LTD.

	 	 	 	 	 
	By:

	 	/s/ Jonathan J.R. Dodd
 

Jonathan J.R. Dodd
	 	 
	Title:

	 	Chief Financial Officer	 	 
	 
	 	 	 	 
	Accepted: May 21, 2008	 	 
	 
	 	 	 	 
	/s/ Peter D. Johnson	 	 
	Peter D. Johnson	 	 

Quanta Capital Holdings Ltd. 22 Church Street, Penthouse, Hamilton HM 11, Bermuda

Tel: 441-294-6350 Fax: 441-294-6390 www.quantaholdings.comEX-10.1

Exhibit 10.1

FIRST AMENDMENT TO

2007 EQUITY INCENTIVE PLAN

OF

ENDURANCE SPECIALTY HOLDINGS LTD.

          WHEREAS, Endurance Specialty Holdings Ltd. (the “Company”) desires to amend the 2007 Equity
Incentive Plan (as amended and in effect, the “Plan”) of the Company to fix at $70,000 the dollar
value of equity incentives to be granted to non-employee directors of the Company each year
following the Company’s Annual General Meeting (the “Plan Amendment”); and

          WHEREAS, on February 13, 2008, subject to shareholder approval, the Board of Directors of the
Company approved the Plan Amendment.

          NOW THEREFORE, the Plan is hereby amended as follows:

	1.	 	Section 7(a) of the Plan is hereby amended by deleting it in its entirety and substituting
the following in lieu thereof:
	 
	 	 	“Annual Grant. Each Director in office at the close of business on the date of the Annual
General Meeting of shareholders of the Company shall be granted on such date either (i) an
Option to purchase Ordinary Shares or (ii) Restricted Shares. The determination to grant
Restricted Shares or Options shall be made at a meeting of the Committee prior to the
Annual General Meeting of Shareholders each year. The number of Options granted shall be
determined utilizing the Black-Scholes option pricing model, with an aggregate grant value
of $70,000 on the date of grant, at a per Ordinary Share exercise price equal to the Fair
Market Value of one Ordinary Share on such date, a perpetual dividend rate equal to the
most recent quarterly dividend (discounted to present value utilizing the current risk free
rate of return) and the average volatility of the Ordinary Shares on the Stock Exchange
over the last 30 trading days. The per Ordinary Share exercise price of any Options
granted shall be equal to the Fair Market Value of one Ordinary Share on the date of grant.
The number of Restricted Shares granted shall be equal to $70,000 divided by the Fair
Market Value of an Ordinary Share on the date of grant, rounded downward to the nearest
whole number of Restricted Shares. The number of Options or Restricted Shares granted shall
be subject to adjustment pursuant to the provisions of Section 16 hereof.”
	 
	2.	 	The Plan Amendment shall be effective upon approval of the shareholders of the Company at the
2008 Annual General Meeting. If the Plan Amendment is not so approved at such meeting, then
the Plan Amendment shall be void ab initio.
	 
	3.	 	Except herein above provided, the Plan is hereby ratified, confirmed and approved in all
respects.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]