Document:

Exhibit 10.1 Change in Control Agreement

EXECUTIVE CHANGE IN CONTROL AGREEMENT
          This Executive Change in Control Agreement (this “Agreement”), is made as of the 30th day of April, 2012 (the “ Effective Date ”), by and between Advanced Energy Industries, Inc., a Delaware corporation (the “  Company ”), and Gordon Tredger (the “ Executive ”).
Recitals
          A. The Executive currently serves as the President of the Solar Energy Business Unit of the Company.
          B. The Board of Directors of the Company (the “Board”) acknowledges that consolidation within the industries in which the Company operates is likely to continue and the potential for a change in control of the Company, whether friendly or hostile, currently exists and from time to time in the future will exist, which potential can give rise to uncertainty among the senior executives of the Company. The Board considers it essential to the best interests of the Company to reduce the risk of the Executive's departure and/or the inevitable distraction of the Executive's attention from his duties to the Company, which are normally attendant to such uncertainties.
          C. The Executive confirms that the terms of this Agreement reduce the risks of his departure and distraction of his attention from his duties to the Company and, accordingly, desires to enter into this Agreement.
Agreement
          In consideration of the foregoing and the mutual covenants contained herein, the Company and the Executive agree as follows:
          1.Definitions. Capitalized terms used herein shall have the meanings given to them in Annex A attached hereto, except where the context requires otherwise.
          2.Term of Agreement.
               This Agreement shall be effective as of the Effective Date and shall continue in effect until April 29, 2013 (the “ Initial Expiration Date ”),  provided ,  however , that the term of this Agreement automatically shall be extended for one additional year effective as of the Initial Expiration Date and each anniversary thereof (each, a “ Scheduled Expiration Date ”), unless either the Company or the Executive provides written notice to the other that the term of this Agreement shall terminate on the upcoming Scheduled Expiration Date,  provided  such notice is received by the receiving party not less than ninety (90) days prior to the applicable Scheduled Expiration Date, and  provided further  that the Company shall not be entitled to deliver to the Executive such notice in the event of a Change in Control or a Pending Change in Control. Notwithstanding the foregoing, this Agreement shall terminate immediately upon the termination of the Executive's employment prior to a Change in Control.  
 
          3.At Will Employment; Reasons for Termination.
               The Executive's employment shall continue to be at-will, as defined under applicable law. If the Executive's employment terminates for any reason or no reason, the Executive shall not be entitled to any compensation, benefits, damages, awards or other payments in respect of such termination, except as provided in this Agreement or pursuant to the terms of any Applicable Benefit Plan. “ Applicable Benefit Plan ” means any written employee benefit plan in effect and in which the Executive participates as of the time of the termination of his employment.
          4.Benefits Upon Separation.
               (a) Compensation and Benefits Required by Law or Applicable Benefit Plan. Notwithstanding anything to the contrary herein, the Executive or his estate shall be entitled to any and all compensation, benefits, awards and other payments required by any Applicable Benefit Plan, the COBRA Act or other applicable law, after taking into account the agreements set forth herein.
               (b) No Payments Without Release. The Executive shall not be entitled to any of the compensation, benefits or other payments provided herein in respect of the termination of his employment, unless and until he has provided to the Company a full release of claims, substantially in the form of  Appendix I  attached hereto, which release shall be dated not earlier than the date of the termination of his employment, which release shall be executed within 30 days of Executive's termination of employment.

               (c) Voluntary Resignation or Termination for Cause.
                    (i) In the event of the Executive's Voluntary Resignation or termination of his employment by the Company for Cause, the Executive shall not be entitled to any compensation, benefits, awards or other payments in connection with such termination of his employment, except as provided in paragraph (a) of this Section 4.
                    (ii) The Executive shall not be deemed to have been terminated for Cause under this Agreement, unless the following procedures have been observed: To terminate the Executive for Cause, the Board must deliver to the Executive notice of such termination in writing, which notice must specify the facts purportedly constituting Cause in reasonable detail. The Executive will have the right, within 10 calendar days of receipt of such notice, to submit a written request for review by the Board. If such request is timely made, within a reasonable time thereafter, the Board (with all directors attending in person or by telephone) shall give the Executive the opportunity to be heard (personally or by counsel). Following such hearing, unless a majority of the directors then in office confirm that the Executive's termination was for Cause, the Executive's termination shall be deemed to have been made by the Company without Cause for purposes of this Agreement.
               (d) Death or Long-Term Disability. In the event of the Executive's death or Long-Term Disability, the Executive (or his estate or personal representative) shall be entitled to receive (i) the proceeds of any life insurance policy carried by the Company with respect to the Executive, (ii) payments pursuant to any long-term disability insurance policy carried by the Company with respect to the Executive. 
               (e) Involuntary Termination. In the event Executive's employment is terminated under circumstances constituting an Involuntary Termination, the Executive shall be entitled to receive:
                    (i) within fifteen (15) calendar days after the Date of Termination, the Executive's Accrued Compensation and Pro-Rata Bonus through the Date of Termination; and
                    (ii) within fifteen (15) calendar days after the period for revocation of the release has elapsed, the amount in cash equal to the sum of the Executive's annual Base Salary and the Executive's Target Bonus in effect as of the Date of Termination; and
                    (iii) for eighteen (18) months after the period for revocation of the release has elapsed continuation of the Benefits, as if the Executive's employment had not been terminated;  provided, however , that if the Executive commences employment with another employer during such eighteen (18) month period and is eligible to receive medical benefits under the new employer's plan(s), the Benefits shall terminate as of the date the Executive becomes eligible to receive such benefits;
                    (iv) within fifteen (15) calendar days after the after the period for revocation of the release has elapsed, an amount equal to the contributions to the Company's retirement plans on behalf of the Executive that would have been made for the benefit of the Executive if the Executive's employment had continued for twelve (12) months after the Date of Termination, assuming for this purpose that all benefits under any such retirement plans were fully vested and that the Executive's compensation during such twelve (12) months were the same as it had been immediately prior to the Date of Termination; and
                    (v) reimbursement, up to $15,000, for outplacement services reasonably selected by the Executive incurred by the end of the second calendar year after termination of employment such reimbursement to occur by the end of the following calendar year.
          5.Effect on Option, Restricted Stock and Restricted Unit Agreements.
               (a) In the event Options held by the Executive are assumed by the surviving entity in connection with a Change in Control, if an Involuntary Termination of Executive's employment occurs following the Change of Control before the end of the CIC Period, vesting of any and all assumed Options held by the Executive shall be accelerated so that all unexpired Options then held by the Executive shall be fully vested and exercisable immediately upon the Involuntary Termination.
               (b) In the event Restricted Stock and RSUs held by the Executive are assumed by the surviving entity in connection with a Change in Control, if an Involuntary Termination of Executive's employment occurs following the Change of Control before the end of the CIC Period, vesting of any and all assumed Restricted Stock and RSUs held by the Executive shall be accelerated so that all Restricted Stock and RSUs then held by the Executive shall be fully vested and exercisable immediately upon the Involuntary Termination. 
               (c) The termination of the Executive's employment by the Company without Cause during a Pending Change in Control shall have no effect on the vesting of the Options, Restricted Stock or RSUs then held by the Executive, and no shares of Common Stock shall be delivered to the Executive in connection with the RSUs held by the Executive at the time of the termination of his employment unless the Change in Control is effected within three (3) months following the Date of Termination. If the Change in Control is effected, then the Options, Restricted Stock and RSUs held by the Executive as of the Date of Termination shall be treated as if the Executive's employment had not been terminated and the Executive shall have 

rights as set forth under Section 5(a) above. If the Change in Control is not effected within three (3) months following the Date of Termination, then the Options, Restricted Stock and RSUs held by the Executive as of the Date of Termination shall be treated as if the Executive's employment had been terminated as of such three-month anniversary of the Date of Termination.
               (d) In the event the Executive's employment is terminated by the Company under any circumstances other than those described in paragraphs (a) through (c) of this Section 5, the effect of such termination of employment on the Options, Restricted Stock and/or RSUs then held by the Executive shall be as set forth in the agreements representing such Options, Restricted Stock and/or RSUs.
          6.Mitigation. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and except as set forth in Section 4 , such amounts shall not be reduced whether or not the Executive obtains other employment.
          7.Successors.
               (a) This Agreement is personal to the Executive, and, without the prior written consent of the Company, shall not be assignable by the Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.
               (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
               (c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
          8.Miscellaneous.
               (a) The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement constitutes the entire agreement and understanding of the parties in respect of the subject matter hereof and supersedes all prior understanding, agreements, or representations by or among the parties, written or oral, to the extent they relate in any away to the subject matter hereof;  provided, however , this Agreement shall have no effect on any confidentiality agreements or assignment of inventions agreements between the parties. This Agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
               (b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
          if to the Executive:
  Gordon Tredger
  126 Alta Vista Way
  Danville, CA 94506

           if to the Company:
Advanced Energy Industries, Inc.
1625 Sharp Point Drive
     Fort Collins, CO 80525
     Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
               (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
               (d) The Company may withhold from any amounts payable under this Agreement such United States federal, state or local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
               (e) The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.
               (f) All claims by the Executive for payments or benefits under this Agreement shall be promptly forwarded to and addressed by the Compensation Committee and shall be in writing. Any denial by the Compensation Committee of a claim for 

benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The compensation Committee shall afford the Executive a reasonable opportunity for a review of the decision denying a claim and shall further allow the Executive make a written demand upon the Company to submit the disputed matter to arbitration in accordance with the provisions of  paragraph (g)  below. The Company shall pay all expenses of the Executive, including reasonable attorneys and expert fees, in connection with any such arbitration. If for any reason the arbitrator has not made his award within one hundred eighty (180) days from the date of Executive's demand for arbitration, such arbitration proceedings shall be immediately suspended and the Company shall be deemed to have agreed to Executive's position. Thereafter, the Company shall, as soon as practicable and in any event within 10 business days after the expiration of such 180-day period, pay Executive his reasonable expenses and all amounts reasonably claimed by him that were the subject of such dispute and arbitration proceedings.
               (g) Subject to the terms of paragraph (f) above, any dispute arising from, or relating to, this Agreement shall be resolved at the request of either party through binding arbitration in accordance with this  paragraph (g) . Within 10 business days after demand for arbitration has been made by either party, the parties, and/or their counsel, shall meet to discuss the issues involved, to discuss a suitable arbitrator and arbitration procedure, and to agree on arbitration rules particularly tailored to the matter in dispute, with a view to the dispute's prompt, efficient, and just resolution. Upon the failure of the parties to agree upon arbitration rules and procedures within a reasonable time (not longer than 15 business days from the demand), the Commercial Arbitration Rules of the American Arbitration Association shall be applicable. Likewise, upon the failure of the parties to agree upon an arbitrator within a reasonable time (not longer than 15 business days from demand), there shall be a panel comprised of three arbitrators, one to be appointed by each party and the third one to be selected by the two arbitrators jointly, or by the American Arbitration Association, if the two arbitrators cannot decide on a third arbitrator. At least 30 days before the arbitration hearing (which shall be set for a date no later than 60 days from the demand), the parties shall allow each other reasonable written discovery including the inspection and copying of documents and other tangible items relevant to the issues that are to be presented at the arbitration hearing. The arbitrator(s) shall be empowered to decide any disputes regarding the scope of discovery. The award rendered by the arbitrator(s) shall be final and binding upon both parties. The arbitration shall be conducted in Larimer County in the State of Colorado. The Colorado District Court located in Larimer County shall have exclusive jurisdiction over disputes between the parties in connection with such arbitration and the enforcement thereof, and the parties consent to the jurisdiction and venue of such court for such purpose.
               (h) This Agreement shall be governed by the laws of the State of Colorado, without giving effect to any choice of law provision or rule (whether of the State of Colorado or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Colorado.
          9.Other Terms Relating to Section 409A
               (a) Except as provided in Section 9(b), amounts payable under this Agreement following Executive's termination of employment, other than those expressly payable on a deferred or installment basis or as reimbursement of expenses, will be paid as promptly as practicable after such a termination of employment and, in any event, within 2 1 / 2  months after the end of the year in which employment terminates and amounts payable as reimbursements of expenses to the Executive must be made on or before the last day of the calendar year following the calendar year in which such expense was incurred.
               (b) Anything in this Agreement to the contrary notwithstanding, if (A) on the date of termination of Executive's employment with the Company or a subsidiary, any of the Company's stock is publicly traded on an established securities market or otherwise (within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as amended (the “Code”)), (B) if Executive is determined to be a “specified employee” within the meaning of Section 409A(a)(2)(B) of the Code, (C) the payments exceed the amounts permitted to be paid pursuant to Treasury Regulations section 1.409A-1(b)(9)(iii) and (D) such delay is required to avoid the imposition of the tax set forth in Section 409A(a)(1) of the Code, as a result of such termination, the Executive would receive any payment that, absent the application of this Section 9(b), would be subject to interest and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the earliest of (1) six (6) months after the Executive's termination date, (2) the Executive's death or (3) such other date as will cause such payment not to be subject to such interest and additional tax (with a catch-up payment equal to the sum of all amounts that have been delayed to be made as of the date of the initial payment).
          (c) It is the intention of the parties that payments or benefits payable under this Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Code. To the extent such potential payments or benefits could become subject to such Section, the parties shall cooperate to amend this Agreement with the goal of giving the Executive the economic benefits described herein in a manner that does not result in such tax being imposed.
          (d) A termination of employment under this Agreement shall be deemed to occur only in circumstances that would constitute a separation from service for purposes of Treasury Regulations section 1.409A-1(h)(1)(ii).

          (e) Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A.
[Signature Page Follows]

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth in the Preamble hereto.
	
							
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	Advanced Energy Industries, Inc.
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 /S/ Garry Rogerson
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Chief Executive Officer
	 
	 

	
							
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	Executive
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 /S/ Gordon Tredger
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Gordon Tredger
	 
	 

 

ANNEX A
DEFINITIONS
               (a) “Accrued Compensation” means an amount including all amounts earned or accrued through the Date of Termination but not paid as of the Date of Termination including (i) Base Salary, (ii) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Date of Termination, (iii) vacation and sick leave pay (to the extent provided by Company policy or applicable law), and (iv) incentive compensation (if any) earned in respect of any period ended prior to the Date of Termination. It is expressly understood that incentive compensation shall have been “earned” as of the time that the conditions to such incentive compensation have been met, even if not calculated or payable at such time.
               (b) “Agreement” means this Executive Change in Control Agreement, as set forth in the Preamble hereto.
               (c) “Applicable Benefit Plan” means any written employee benefit plan in effect and in which the Executive participates as of the time of the termination of his employment.
               (d) “Base Salary” means the Executive's annual base salary at the rate in effect during the last regularly scheduled payroll period immediately preceding the occurrence of the Change in Control or termination of employment and does not include, for example, bonuses, overtime compensation, incentive pay, fringe benefits, sales commissions or expense allowances.
               (e) “Board” means the Board of Directors of the Company, as set forth in the Recitals hereto.
               (f) “Cause” means any of the following:
                    (i) the Executive's (A) conviction of a felony; (B) commission of any other material act or omission involving dishonesty or fraud with respect to the Company or any of its Affiliates or any of the customers, vendors or suppliers of the Company or its Affiliates; (C) misappropriation of material funds or assets of the Company for personal use; or (D) engagement in unlawful harassment or unlawful discrimination with respect to any employee of the Company or any of its subsidiaries;
                    (ii) the Executive's continued substantial and repeated neglect of his duties, after written notice thereof from the Board, and such neglect has not been cured within 30 days after the Executive receives notice thereof from the Board;
                    (iii) the Executive's gross negligence or willful misconduct in the performance of his duties hereunder that is materially and demonstrably injurious to the Company; or 
                    (iv) the Executive's engaging in conduct constituting a breach of his written obligations to the Company in respect of confidentiality and/or the use or ownership of proprietary information.
  (g) “Change in Control” shall be deemed to occur upon the consummation of any of the following transactions, unless the only parties to the transaction are the Company and/or one or more of its direct or indirect majority-owned subsidiaries and/or one or more companies directly or indirectly owning a majority interest in the Company immediately prior to the transaction:
(i)    a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state of the Company's incorporation or a transaction in which 50% or more of the surviving entity's outstanding voting stock following the transaction is held by holders who held 50% or more of the Company's outstanding voting stock prior to such transaction; or
(ii)    the sale, transfer or other disposition of all or substantially all of the assets of the Company; or
(iii)    any reverse merger in which the Company is the surviving entity, but in which 50% or more of the Company's outstanding voting stock is transferred to holders different from those who held the stock immediately prior to such merger; or
(iv)    the acquisition by any person (or entity), other than Douglas Schatz and/or any of his affiliates or members of his immediate family, directly or indirectly of 50% or more of the combined voting power of the outstanding shares of Common Stock.
               (h) “CIC Period” means the six month period following the effective date of a Change in Control.
               (i) “Code” means the Internal Revenue Code of 1986, as amended.
               (j) “Common Stock” means common stock, par value $0.001, of the Company.

               (k) “Company” means Advanced Energy Industries, Inc., a Delaware corporation, as set forth in the Preamble hereto.
               (l) “Date of Termination” means (i) if the Executive's employment is terminated for Cause, the date of receipt by the Executive of written notice from the Board or the Chief Executive Officer that the Executive has been terminated, or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause, death or Long-Term Disability, the date specified in the Company's written notice to the Executive of such termination, (iii) if the Executive's employment is terminated by reason of the Executive's death or Long-Term Disability, the date of such death or the effective date of such Long-Term Disability, (iv) if the Executive's employment is terminated by Executive's resignation that constitutes Involuntary Termination under this Agreement, the date of the Company's receipt of the Executive's notice of termination or any later date specified therein.
               (m) “Effective Date” means the date set forth in the Preamble hereto.
 A-ii

 
               (n) “Executive” means the individual identified in the Preamble hereto.
               (o) “Good Reason” means any of the following:
                    (i) a material reduction in the Executive's duties, level of responsibility or authority, other than (A) reductions solely attributable to the Company ceasing to be a publicly held company or becoming a subsidiary or division of another company, or (B) isolated incidents that are promptly remedied by the Company; or
                    (ii) a material reduction in the Executive's Base Salary, without (A) the Executive's express written consent or (B) an increase in the Executive's benefits, perquisites and/or guaranteed bonus, which increase(s) have a value reasonably equivalent to the reduction in Base Salary; or
                    (iii) a material reduction in the Executive's Target Bonus, without (A) the Executive's express written consent or (B) an corresponding increase in the Executive's Base Salary; or
                    (iv) the relocation of the Executive's principal place of business to a location more than thirty-five (35) miles from the Executive's principal place of business immediately prior to the Change in Control, without the Executive's express written consent; or
                    (v) the Company's (or its successor's) material breach of this Agreement.
               (p) “Involuntary Termination” means the termination of Executive's employment with the Company at the time of or following a Change in Control before the end of the CIC Period:
                    (i) by the Company without Cause, or
                    (ii) by the Executive for Good Reason.
               (q) “Long-Term Disability” is defined according to the Company's insurance policy regarding long-term disability for its employees.
               (r) A “Payment” means any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable pursuant to this Agreement or otherwise.
               (s) “Pending Change in Control” means that one or more of the following events has occurred and a Change in Control pursuant thereto is reasonably expected to be effected within 90 days of the date as of the determination as to whether there is a Pending Change in Control: (i) the Company executes a letter of intent, term sheet or similar instrument with respect to a transaction or series of transactions, the consummation of which transaction(s) would result in a Change in Control; (ii) the Board approves a transaction or series of transactions, the consummation of which transaction(s) would result in a Change in Control; or (iii) a person makes a public announcement of tender offer for the Common Stock, the
A-iii
 

 

completion of which would result in a Change in Control. A Pending Change in Control shall cease to exist upon a Change in Control.
               (t) “Pro Rata Bonus” means an amount equal to 100% of the Target Bonus that the Executive would have been eligible to receive for the Company's fiscal year in which the Executive's employment terminates following a Change in Control, multiplied by a fraction, the numerator of which is the number of days in such fiscal year through the Termination Date and the denominator of which is 365.
               (u) “Restricted Stock” means Common Stock issued by the Company with vesting restrictions and subject to an award agreement pursuant to a stock plan of the Company.
               (v) “RSUs” mean restricted stock units granted by the Company pursuant to which the Company has agreed to issue Common Stock upon the satisfaction of vesting and other conditions, which RSUs are subject to an award agreement pursuant to a stock plan of the Company.
               (w) “Target Bonus” means the bonus which would have been paid to the Executive for full achievement of the Company's base business plan or budget and/or for the attainment of specific performance objectives pertaining to the business of the Company or any of its specific business units or divisions, or to individual performance criteria applicable to the Executive or his position, which objectives have been established by the Board of Directors (or the Compensation Committee thereof) for the Executive relating to such plan or budget for the year in question. “ Target Bonus ” shall not mean the “maximum bonus” which the Executive might have been paid for overachievement of such plan.
               (x) “Value” of a Payment means the economic present value of a Payment as of the date of the change of control for purposes of Section 280G of the Code, as determined by the Accounting Firm using the discount rate required by Section 280G(d)(4) of the Code.
               (y) “Voluntary Resignation” means the termination of the Executive's employment upon his voluntary resignation, which includes retirement, as set forth in  Section 3  hereof.
A-iv

 

APPENDIX I
Legal Release
     This Legal Release (“Release”) is between Advanced Energy Industries, Inc. (the “Company”) and Gordon Tredger  (“ Executive ”) (each a “ Party ,” and together, the “ Parties ”).
Recitals
     A. Executive and the Company are parties to an Executive Change In Control Agreement to which this Release is appended as Appendix I (the “ CIC Agreement ”).
     B. Executive wishes to receive the benefits described in the CIC Agreement.
     C. Executive and the Company wish to resolve, except as specifically set forth herein, all claims between them arising from or relating to any act or omission predating the Final Separation Date of [                      ].
Agreement
     The Parties agree as follows:
     Confirmation of CIC Agreement Obligations. The Company shall pay or provide to Executive the payments and benefits, as, when and on the terms and conditions specified in the CIC Agreement.
     Legal Releases
          (a) Executive, on behalf of Executive and Executive's heirs, personal representatives and assigns, and any other person or entity that could or might act on behalf of Executive, including, without limitation, Executive's counsel (all of whom are collectively referred to as “Executive Releasers”), hereby fully and forever releases and discharges the Company, its present and future affiliates and subsidiaries, and each of their past, present and future officers, directors, employees, shareholders, independent contractors, attorneys, insurers and any and all other persons or entities that are now or may become liable to any Releaser due to any Releasee's act or omission, (all of whom are collectively referred to as “Executive Releasees”) of and from any and all actions, causes of action, claims, demands, costs and expenses, including attorneys' fees, of every kind and nature whatsoever, in law or in equity, whether now known or unknown, that Executive Releasers, or any person acting under any of them, may now have, or claim at any future time to have, based in whole or in part upon any act or omission occurring on or before the Final Separation Date, without regard to present actual knowledge of such acts or omissions, including specifically, but not by way of limitation, matters which may arise at common law, such as breach of contract, express or implied, promissory estoppel, wrongful discharge, tortious interference with contractual rights, infliction of emotional distress, defamation, or under federal, state or local laws, such as the Fair Labor Standards Act, the Employee Retirement Income Security Act, the National Labor Relations Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Equal Pay Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and any civil rights law of any state or other governmental body; PROVIDED, HOWEVER, that notwithstanding the foregoing or anything else contained in this Agreement, the release set forth in
A-v

 

this Section shall not extend to: (i) any rights arising under this Agreement; or; (ii) any vested rights under any pension, retirement, profit sharing or similar plan; (iii) Executive's rights, if any, to indemnification, and/or defense under any Company certificate of incorporation, bylaw and/or policy or procedure, or under any insurance contract, in connection with Executive's acts an omissions within the course and scope of Executive's employment with the Company; or (iv) any rights or remedies that cannot by law be waived by private agreement. Executive hereby warrants that Executive has not assigned or transferred to any person any portion of any claim which is released, waived and discharged above. Executive further states and agrees that Executive has not experienced any illness, injury, or disability that is compensable or recoverable under the worker's compensation laws of any state that was not reported to the Company by Executive before the Final Separation Date. Executive has specifically consulted with counsel with respect to the agreements, representations, and declarations set forth in the previous sentence. Executive understands and agrees that by signing this Agreement Executive is giving up any right to bring any legal claim against the Company concerning, directly or indirectly, Executive's employment relationship with the Company, including Executive's separation from employment. Executive agrees that this legal release is intended to be interpreted in the broadest possible manner in favor of the Company, to include all actual or potential legal claims that Executive may have against the Company, except as specifically provided otherwise in this Agreement.
          (b) In order to provide a full and complete release, Executive understands and agrees that this Agreement is intended to include all claims, if any, covered under this Section 2 that Executive may have and not now know or suspect to exist in Executive's favor against any Executive Releasee and that this Agreement extinguishes such claims. Thus, Executive expressly waives all rights under any statute or common law principle in any jurisdiction that provides, in effect, that a general release does not extend to claims which the releasing party does not know or suspect to exist in Executive's favor at the time of executing the release, which if known by Executive must have materially affected Executive's settlement with the party being released. Notwithstanding any other provision of this Section 2, however, nothing in this Section 2 is intended or shall be construed to limit or otherwise affect in any way Executive's rights under this Agreement.
          (c) Executive agrees and acknowledges that Executive: (i) understands the language used in this Agreement and the Agreement's legal effect; (ii) is specifically releasing all claims and rights under the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621  et seq .; (iii) will receive compensation under this Agreement to which Executive would not have been entitled without signing this Agreement; (iv) has been advised by the Company to consult with an attorney before signing this Agreement; and (v) will be given up to twenty one (21) calendar days to consider whether to sign this Agreement. For a period of seven days after Executive signs this Agreement, Executive may, in Executive's sole discretion, rescind this Agreement by delivering a written notice of rescission to the Company's General Counsel. If Executive rescinds this Agreement within seven calendar days after Executive signs the Agreement, or if Executive does not sign this Agreement within the twenty-one day consideration period, this Agreement shall be void, all actions taken pursuant to this Agreement shall be reversed, and neither this Agreement nor the fact of or circumstances surrounding its execution shall be admissible for any purpose whatsoever in any proceeding between the Parties, except in connection with a claim or defense involving the validity or effective rescission of this Agreement. If Executive does not rescind this Agreement within seven calendar days after the day Executive signs this Agreement, this Agreement shall become final and binding and shall be irrevocable.
A-vi

 
     Executive acknowledges that Executive has received all compensation to which Executive is entitled for Executive's work up to Executive's last day of employment with the Company, and that Executive is not entitled to any further pay or benefit of any kind, for services rendered or any other reason, other than the payments and benefits, to the extent not already paid, described in the CIC Agreement.
     Executive agrees that the only thing of value that Executive will receive by signing this Supplemental Release is the payments and benefits described in the CIC Agreement.
     The Parties agree that their respective rights and obligations under the CIC Agreement shall survive the execution of this Release.
NOTE: DO NOT SIGN THIS LEGAL RELEASE UNTIL AFTER EXECUTIVE'S FINAL DAY OF EMPLOYMENT.
	
											
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	           EXECUTIVE
	 
	 
	 
	ADVANCED ENERGY INDUSTRIES, INC.
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	By:
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Date:
	 
	 
	 
	 
	 
	Date:
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

A-viiExhibit 10.1

XL Group plc Reinsurance Supplemental Long
Term Cash Incentive Compensation Plan 

	
  

 	
  

 
	
 Section 1.

 	
 Purposes of the Plan

 

                    The
purpose of the Reinsurance Supplemental Long Term Cash Incentive Compensation
Plan (the “Plan”) is to advance the interests of XL Group plc and its
shareholders by creating a long-term incentive compensation vehicle covering
certain employees in the reinsurance business of XL Group plc and the
Subsidiaries (the “Reinsurance Segment”).
The Plan is designed to motivate exceptional profitable revenue growth
and retain key talent through the four-year Performance Period (defined below),
while maintaining controls designed to ensure such growth is prudent and to
mitigate any risks from Plan operation that could have a material adverse
affect on the Company. The Plan is
designed to pay out in cash over three years beginning after the end of the
Performance Period. There are no
additional deferral provisions with respect to any amounts potentially payable
under the Plan.

	
  

 	
  

 
	
 Section 2.

 	
 Definitions

 

                    “Award
Amount” means the amount of a Participant’s award under the Plan, determined in
accordance with Section 5 below and subject to the other Plan terms set forth
herein.

                    “Board”
means the Board of Directors of the Company.

                    “Cause”
means (i) Participant’s conviction of a felony involving moral turpitude,
dishonesty or laws to which the Company or the Subsidiaries are subject in
connection with the conduct of its or their business; (ii) Participant’s
willful misconduct that is materially injurious to the financial condition of
the Company or a Subsidiary; (iii) the Participant’s willful refusal to obey
any lawful policy or requirement duly adopted by the Company or a Subsidiary;
(iv) Participant’s willful violation of the policies or code of conduct of the
Company or a Subsidiary; (v) Participant’s willful violation of the
underwriting guidelines applicable to the Participant or the underwriting
authority of the Participant; or (vi) as defined in an employment agreement
between the Participant, the Company and/or Subsidiary.

                    “Change
in Control” means any person, meaning an individual, a partnership, or other
group or association as defined in Sections 13(d) and 14(d) of the United
States Securities Exchange Act of 1934 (other than a group of which the Company
is a member or which has been organized by the Company for the purpose of
making such acquisition), acquires, directly or indirectly, 40 percent or more
of the combined voting power of the outstanding securities of the Company
having a right to vote in the election of directors, including but not limited
to a transaction pursuant to (i) a compromise or arrangement sanctioned by the
Court under section 201 of the Companies Act 1963 of the Republic of Ireland or
(ii) section 204 of the Companies Act 1963 of the Republic of Ireland. Ownership of 40 percent or more of the
combined voting power of the outstanding securities of the Company by any
person controlled directly or indirectly by the Company shall not be deemed a
Change of Control of the Company; provided, however, that, as applied to
any Award Amount that

1

constitutes
deferred compensation for purposes of Section 409A of the Code, a transaction
will constitute a Change in Control only if it also qualifies as a “change in
control event” (as defined in Treas. Reg. Section 1.409A-3(i)(5)).

                    “Code”
means the United States Internal Revenue Code of 1986, as amended.

                    “Combined
Ratio” means the combined ratio (“CR”) for the Performance Period, determined
as of the end of the Performance Period and based on a weighted average of the
CRs for each accident year (“AY”) in the Performance Period. Weightings shall be based on the AY net
earned premiums for the Reinsurance Segment, as reported on the Company’s
financial statements. Each AY CR shall
be determined as follows: A calendar year (“CY”) CR shall be calculated
annually following the close of each CY.
The CY CR shall be adjusted to an AY basis by removing any prior year
reserve development (“PYD”) from the CY CR to arrive at a CR for the most
recent AY. The PYD, if any, removed
from the most recent CY CR will be added to the appropriate prior AYs such that
the resulting restated AY CRs reflect the cumulative PYD from all prior
CYs.   AY CRs will be restated annually to reflect the PYD
experienced in subsequent CYs. 

                    “Committee”
means the Management Development and Compensation Committee of the Board, or
any successor Committee approved by the Board.

                    
“Company” means XL Group plc and any successor company.

                    “Company
CAGR” means the compound annual growth rate of net written premium for the
Reinsurance Segment, as reported on the Company’s financial statements, as
measured from the beginning of the Performance Period (using December 31, 2011
data) to the end of the Performance Period.

                    “Disability”
means permanent and total disability as determined under the Subsidiary
long-term disability plan covering the Participant.

                    “Effective
Date” means January 1, 2012. 

                    “First
Payment” shall be as defined in Section 5.D.

                    “Head
of Reinsurance” means the Company’s Executive Vice President, Chief Executive
of Reinsurance Operations on the Effective Date.

                    “Participant”
shall be as defined in Section 3.

                    “Peer
Group” means Munich Re, Swiss Re, Everest Re, Partner Re, Hannover Re and
Alleghany Corporation; provided however, that (i) Alleghany Corporation
shall be included in the Peer Group only if net written premium is publicly
reported solely for the reinsurance segment formerly operated by Transatlantic
Re for periods beginning January 1, 2012 and continuing during the Performance
Period, and (ii) if any such company is acquired, becomes subject to a
proceeding under applicable bankruptcy laws (or a similar proceeding) or
otherwise ceases to exist as a separate public company during a year included
in the Performance Period, such company will continue to be included in the
Peer Group with modifications to the calculation as described in the definition
of “Peer Group CAGR” below.

-2-

                    “Peer
Group CAGR” means the compound annual growth rate in annual net written premium
(or if a Peer Group company does not publicly report net written premium, then
such company’s annual net earned premium shall instead be used) for the
reinsurance operations of the companies in the Peer Group, as reported on such
companies’ financial statements, as measured from the beginning of the
Performance Period (January 1, 2012) to the end of the Performance Period
(December 31, 2015). Peer Group CAGR
shall be calculated using reported premium for the Peer Group companies on a
consolidated basis (i.e., based on the sum of the Peer Group companies’ net
written premiums, or net earned premiums in cases where net earned premiums are
not available); provided that if a company ceases to be a member of the
Peer Group during the Performance Period, such company’s CAGR for the
Performance Period will be calculated separately based on the trailing
twelve-month premium data as of the last publicly reported period. Peer Group CAGR will then be the weighted
average of the remaining consolidated Peer Group’s compound annual growth rate
for the entire Performance Period, and the truncated compound annual growth
rate for the company that left the Peer Group.
Weighting will be based on net written (or net earned) premium as of
January 1, 2012. 

                    
“Performance Period” means the period beginning on January 1, 2012 and ending
on December 31, 2015.

                    “Plan”
shall be as defined in Section 1.

                    “Pool”
means the total amount payable under the Plan which shall be based on payout
amounts associated with results for Relative CAGR and Combined Ratio, as
provided in Appendix A hereto.

                    “Pool
Percentage” means a Participant’s percentage of the Pool, as determined by the
Committee; provided that the Head of Reinsurance shall have a Pool
Percentage of 35%.

                    “Reinsurance
Segment” shall be as defined in Section 1.

                    “Relative
CAGR” means Company CAGR compared to Peer Group CAGR as shown by the
relationship: (1.0 + Company CAGR)/(1.0 + Peer Group CAGR).

                    “Second
Payment” shall be as defined in Section 5.D.

                    “Subsidiary”
means any corporation at least fifty percent (50%) percent of the outstanding
voting stock of which is owned by the Company. 

                    “Third
Payment” shall be as defined in Section 5.D.

	
  

 	
  

 
	
 Section 3.

 	
 Eligibility

 

                    The
Head of Reinsurance of the Company and other employees of the Company’s
Reinsurance division selected by the Committee are eligible to participate in
the Plan. Each of the Head of
Reinsurance and the eligible employees selected by the Committee (including any
additional employees selected by the Committee) shall become a
Participant. The Committee shall have
the authority to remove a current Participant, or to replace a current
Participant with a new Participant. 

-3-

	
  

 	
  

 
	
 Section 4.

 	
 Administration

 

                    A.
Committee. The Plan shall be administered
by the Committee. The Committee shall
have full discretionary power, consistent with the Management Development and
Compensation Committee Charter, to:

	
  

 	
  

 	
  

 
	
 (i)

 	
  

 	
 interpret
 and make all determinations under the Plan;

 
	
  

 	
  

 	
  

 
	
 (ii)

 	
  

 	
 determine,
 consistent with Section 3 above, those employees of the Company and the
 Subsidiaries who are eligible to participate in the Plan;

 
	
  

 	
  

 	
  

 
	
 (iii)

 	
  

 	
 approve the
 determination of the amount of the Pool, including determinations of, or
 relating to, Combined Ratio and Relative CAGR and any adjustments thereto;

 
	
  

 	
  

 	
  

 
	
 (iv)

 	
  

 	
 establish,
 consistent with the terms of the Plan, each Participant’s Pool Percentage and
 corresponding Award Amounts; and

 
	
  

 	
  

 	
  

 
	
 (v)

 	
  

 	
 adopt such
 rules, regulations, and guidelines for administering the Plan as the
 Committee may deem necessary or proper.

 

                    B.
Operational Review. The
Company’s Chief Enterprise Risk Officer, Chief Financial Officer, and Chief
Actuary will review the business writings as often as necessary but no less
frequently than annually to ensure that the Plan is operating in a manner
consistent with the long-term health of the Reinsurance Segment and the overall
Company. They shall consider any
factors that are, in their judgment, relevant, including but not limited to:

	
  

 	
  

 	
  

 
	
 (i)

 	
  

 	
 a material
 change in the current portfolio composition;

 
	
  

 	
  

 	
  

 
	
 (ii)

 	
  

 	
 significant
 changes in the Company’s current underwriting philosophy that are not in line
 with expectations;

 
	
  

 	
  

 	
  

 
	
 (iii)

 	
  

 	
 an increase
 in business combined with declining rate adequacy levels; and

 
	
  

 	
  

 	
  

 
	
 (iv)

 	
  

 	
 indications
 that business decisions by Participants are being made primarily to influence
 Award Amounts without proper consideration of other factors (e.g., the
 long-term health of the Reinsurance Segment and the Company).

 

The
Company’s Chief Enterprise Risk Officer, Chief Financial Officer, and Chief
Actuary shall report their findings to the Committee on a current basis, but no
less frequently than annually, during the Performance Period.

                    C.
Adjustments. The Committee shall
have full discretion to adjust the Pool amount or any individual Award Amount
as determined pursuant to Appendix A, including, but not limited to, as a
response to the following situations:

	
  

 	
  

 	
  

 
	
 (i)

 	
  

 	
 Based on a
 report from the Chief Enterprise Risk Officer, Chief Financial Officer, and
 Chief Actuary as described in Section 4.B. above, the Committee determines
 that business was written that is not consistent with the long-term health of
 the 

 

-4-

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Reinsurance
 Segment and/or the overall Company, in which case the Committee may decide to
 exclude such business from the calculations of Company CAGR and CR under the
 Plan.

 
	
  

 	
  

 	
  

 
	
 (ii)

 	
  

 	
 In the event
 of a catastrophic event (or a series of such events) above the normal budgeted
 catastrophe load, based on the quality of the Company’s underwriting results
 compared to industry results.

 
	
  

 	
  

 	
  

 
	
 (iii)

 	
  

 	
 In the case
 of a Participant who materially violates the policies or code of conduct of
 the Company or the Subsidiaries or who materially violates the underwriting
 guidelines applicable to the Participant or the underwriting authority of the
 Participant.

 

                    D.
Third-party Advisors. The
Committee may employ attorneys, consultants, accountants, and other
persons. The Board, Committee, the
Company, and its officers shall be entitled to rely upon the advice or opinion
of such persons.

                    E.
Binding Effect of Committee Actions.
All actions taken and all interpretations and determinations made by the
Committee or the Board shall be final and binding upon the Participants, the
Company, and all other interested persons.
No member of the Committee or the Board shall be personally liable for
any action, determination, or interpretation made in good faith with respect to
the Plan. All members of the Committee
and the Board shall be protected and indemnified by the Company, to the fullest
extent permitted by applicable law and the Company’s by-laws, in respect of any
such action, determination, or interpretation of the Plan.

                    F.
Foreign Jurisdictions. The
Committee shall have the discretion to modify or amend the Plan, or adopt
additional terms and or conditions, as may be deemed necessary or advisable in
order to comply with the local laws and regulations of any jurisdiction.

	
  

 	
  

 
	
 Section 5.

 	
 Determination of Awards

 

                    A.
Award Amount. Each Participant’s
Award Amount will be equal to the Participant’s Pool Percentage multiplied by
the Pool amount, determined as set forth in Appendix A, and subject to any
adjustments pursuant to Section 4.C. of the Plan. Unless otherwise specifically determined by the Committee, any
percentage of the Pool that is forfeited due to termination of employment of a
Participant or otherwise shall not be available for distribution to other
Participants.

                    B.
Cash Payments and No Additional Deferral. All payments under this Plan will be made in cash, and there will
be no right of further deferral with respect to any payments under the Plan.

                    C.
Payment of Award Amounts. So
long as the Participant remains continuously employed by the Company or a
Subsidiary (and has not given notice of termination) during the entire
Performance Period or, in the case of the Head of Reinsurance, through February
15, 2016, the Participant’s Award Amount shall be paid as follows: (i) the
First Payment (as defined below) shall be paid to the Participant on or after
January 1, 2016 (February 15, 2016, in the case of the Head of Reinsurance)
and on or prior to March 15, 2016, (ii)  the Second Payment (as
defined below) shall be paid to the Participant on or after January 1,
2017 and on or prior to March 15, 2017, and (iii) the

-5-

Third Payment
(as defined below) shall be paid to the Participant on or after January 1,
2018 and on or prior to March 15, 2018 or, in the case of the Head of
Reinsurance, on or after October 1, 2017 and on or prior to December 31,
2017. 

                    D.
Calculation of Award Amounts.
The “First Payment” shall be equal to 50% of the product of the Pool
amount and the Participant’s Pool Percentage.
The “Second Payment” and the “Third Payment” shall be adjusted to take
into account reserve development subsequent to the Performance Period on
business written during the Performance Period, and calculated as follows:

	
  

 	
  

 	
  

 
	
 (i)

 	
  

 	
 For the
 Second Payment, the AY CRs for the Performance Period shall be restated as of
 December 31, 2016, and the payment shall be equal to 75% of the product of
 the adjusted Pool amount and the Participant’s Pool Percentage, minus the
 First Payment amount.

 
	
  

 	
  

 	
  

 
	
 (ii)

 	
  

 	
 For the
 Third Payment, the AY CRs for the Performance Period shall be restated as of
 December 31, 2017 (September 30, 2017, in the case of the Head of
 Reinsurance), and the payment shall be equal to 100% of the product of the
 adjusted Pool amount and the Participant’s Pool Percentage, minus the First
 Payment and the Second Payment amounts.

 

Notwithstanding
the foregoing, the Committee shall have full discretion to adjust the Pool amount
or any individual Award Amount pursuant to Section 4.C. above.

                    E.
For the avoidance of doubt, except as otherwise set forth in Section 6 below,
in order to receive any payment under this Plan the Participant must remain
continuously employed by the Company or a Subsidiary through and not have given
notice of termination of employment prior to the end of the Performance Period
(December 31, 2015) or, in the case of the Head of Reinsurance, February 15,
2016.

	
  

 	
  

 
	
 Section 6.

 	
 Termination of Employment

 

                    A.
Death or Disability. In the
event of a Participant’s termination of employment due to his or her death or
Disability during the Performance Period or, in the case of the Head of
Reinsurance, prior to February 15, 2016, the Participant (or his/her estate)
shall receive an Award Amount, prorated based on the portion of the Performance
Period completed prior to the date of death or Disability, as approved by the
Committee. Such Award Amount shall be
paid at the time provided in Section 5.C. above and subject to the same
adjustments pursuant to Sections 4 and 5, if applicable, as the payments to the
other Participants. Notwithstanding the
foregoing, in the case of termination of employment of the Head of Reinsurance
during the Performance Period, the following provisions shall apply: 

	
  

 	
  

 	
  

 
	
 (i)

 	
  

 	
 In the case
 of termination on or prior to December 31, 2014, for purposes of determining
 the Pool amount, Relative CAGR and Combined Ratio shall be calculated as if
 the Performance Period ended on September 30 of the year following the year
 in which the termination occurs (with Combined Ratio reflecting the
 cumulative PYDs for all periods during such Performance Period). In such case, an amount equal to 100% of
 the product of such Pool amount and the Participant’s Pool percentage shall
 be paid in a single payment on or after October 

 

-6-

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 1 and on or
 prior to December 31 of the year following the year in which the termination
 occurs.

 
	
  

 	
  

 	
  

 
	
 (ii)

 	
  

 	
 In the case
 of termination after December 31, 2014 and on or prior to December 31, 2015,
 for purposes of determining the Pool amount, Relative CAGR and Combined Ratio
 shall be calculated for the full Performance Period and an initial amount
 equal to 50% of the product of the Pool amount and the Participant’s Pool
 percentage shall be paid on or after January 1, 2016 and on or prior to March
 15, 2016. In addition, the Pool
 amount shall be recalculated with Combined Ratio restated as of September 30,
 2016 and an amount equal to 100% of the product of such Pool amount, less the
 amount paid pursuant to the previous sentence, shall be paid on or after
 October 1, 2016 and on or prior to December 31, 2016.

 

                    B.
Termination by the Company Without Cause. In the event the Participant’s employment is terminated by the
Company not for Cause (including, in the case of a Participant who has an
employment agreement with the Company, a termination by the Participant that is
deemed to be a termination by the Company without Cause under the provisions of
the employment agreement or a termination by the Participant for Good Reason
under the employment agreement) during the Performance Period or, in the case
of the Head of Reinsurance, prior to February 15, 2016, the Participant shall receive
an Award Amount, prorated based on the portion of the Performance Period
completed prior to the date of termination, as approved by the Committee. Such Award Amount shall be paid at the same
time and subject to the same adjustments pursuant to Sections 4 and 5, if
applicable, as the payments to the other Participants. Notwithstanding the
foregoing, in the case of termination of employment of the Head of Reinsurance
during the Performance Period, the provisions of clauses (i) and (ii) of
Section 6.A. of the Plan shall apply.

                    C.
Voluntary Termination of Employment by Participant. In the event of a Participant’s voluntary
termination of employment or the Participant’s giving of notice of termination
of employment during the Performance Period or, in the case of the Head of
Reinsurance, prior to February 15, 2016 (not including, in the case of a
Participant who has an employment agreement with the Company, a termination by
the Participant that is deemed to be a termination by the Company without Cause
under the provisions of the employment agreement or a termination by the
Participant for Good Reason under the employment agreement), the Participant
shall not be entitled to any further payment under the Plan and shall have no
rights or interests in the Plan.

                    D.
Termination by the Company for Cause.
In the event the Participant’s employment is terminated by the Company
for Cause, the Participant shall not be entitled to any further payment under
the Plan and shall have no rights or interests in the Plan.

	
  

 	
  

 
	
 Section 7.

 	
 General Provisions

 

                    A.
No Right to Employment or Participation. No Participant or other person shall have any claim or right to
be retained in the employment of the Company or a Subsidiary by reason of the
Plan or to any award made as part of the Plan nor will the Plan be construed as
having created an employment contract for any term.

-7-

                    B.
Not Compensation Under Other Plans.
An award made under this Plan shall not be considered “compensation”
under any qualified or non-qualified, registered or non-registered employee
benefit plan, program or arrangement of the Company and shall not have any
effect on the level of benefits provided to or received by a Participant or
his/her estate or designated beneficiary, as part of any employee benefit plan
of the Company or the Subsidiaries.

                    C.
Plan Expenses. The expenses of
the Plan and its administration shall be borne by the Company.

                    D.
Plan Not Funded. The Plan shall
be unfunded and the Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment
of any award made under the Plan.

                    E.
Other Long-Term Incentive Arrangements.
This Plan is not intended to be the sole and exclusive long term
incentive program of the Company in which Participants may be entitled to
participate in the ordinary course.

                    F.
Reports. The appropriate
officers of the Company shall cause to be filed any reports, returns, or other
information regarding the Plan, as may be required by any applicable statute,
rule, or regulation.

                    G.
Withholding. The Company may
deduct from any payment to a Participant under this Plan any Federal, state, or
local withholding or other tax or charge which the Company is then required to
deduct under applicable law with respect thereto.

                    H.
No Transfers. No award or rights
under this Plan may be transferred or assigned by a Participant other than by
will or by the laws of descent and distribution.

                    I.
Governing Law. The validity,
construction, and effect of the Plan, and any actions relating to the Plan,
shall be determined in accordance with the laws of the state of New York and
applicable federal law, without regard to the conflict of laws provisions of
any state or country.

                    J.
Section 409A. It is intended
that the Plan will comply with Section 409A of the Code and any regulations and
guidelines issued thereunder, and the Plan shall be interpreted on a basis
consistent with such intent. The Plan
may be amended in any respect deemed necessary (including retroactively) by the
Board in order to preserve compliance with Section 409A of the Code. It is intended that amounts payable under
this Plan will not be considered to be deferred compensation for purposes of
Section 409A of the Code by virtue of Treas. Reg. Section 1.409A-1(b)(4). However, if any amount payable hereunder is
considered to be deferred compensation for such purposes, notwithstanding any
provision to the contrary in this Plan, if a Participant is deemed on the date
of his or her “separation from service” (within the meaning of Treas. Reg.
Section 1.409A-1(h)) to be a “specified employee” (within the meaning of
Treas. Reg. Section 1.409A-1(i)), then with regard to any payment that is
required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after
taking into account the applicable provisions of Treas. Reg. Section
1.409A-1(b)(4)), the portion, if any, of such payment so required to be delayed
shall not be made prior to the earlier of (i) the expiration of the six
(6)-month period measured from the date of his “separation from service” or
(ii) the date of his or her death (the “Delay Period”). Upon the expiration of the Delay Period, all
payments delayed pursuant to this Section 7.J shall be paid to the

-8-

Participant in
a lump sum. No action or failure to
act, pursuant to this Section 7.J shall subject the Company to any claim,
liability, or expense, and the Company shall not have any obligation to
indemnify or otherwise protect any Participant from the obligation to pay any
tax, interest or penalty pursuant to Section 409A or Section 457A of the
Code. Notwithstanding any provision of
this Plan to the contrary, for purposes of any provision of this Plan providing
for the payment of any amounts considered to be deferred compensation for
purposes of Section 409A of the Code upon or following a termination of
employment, references to the Participant’s “termination of employment” (and
corollary terms) with the Company shall be construed to refer to the
Participant’s “separation from service” (within the meaning of Treas. Reg.
Section 1.409A-1(h)) with the Company.
Whenever payments under this Plan are to be made in installments, each
such installment shall be deemed to be a separate payment for purposes of
Section 409A.

	
  

 	
  

 
	
 Section 8.

 	
 Amendment / Termination of the Plan

 

                    The
Board may, from time to time, amend the Plan in any respect, or may discontinue
or terminate the Plan at any time; provided, however, that no
amendment, discontinuance or termination of the Plan shall, without the consent
of the affected Participant, have a material adverse effect on any award made
to any Participant under the Plan.

	
  

 	
  

 
	
 Section 9.

 	
 Change in Control

 

                    A.
In the event a Change in Control occurs, unless the Company commits in writing
at the time of such Change in Control to each of the Participants that the Plan
will be continued in effect after the Change in Control with Award Amounts
determined on the basis of the operational results of the Reinsurance Segment
of the Company and its Subsidiaries, on a stand-alone basis, for the full
duration of the Plan, the Performance Period shall terminate and the Committee
shall determine Relative CAGR and Combined Ratio as of the latest practical
date occurring prior to the Change in Control.
Each Participant’s Award Amount shall be calculated based on such
Relative CAGR and Combined Ratio, subject to adjustment pursuant to Sections 4
and 5, if applicable, and shall be paid to the Participant without proration
within 60 days after such Change in Control.

                    B.
In the event a Change in Control occurs and the Company makes the commitment to
the Participants set forth in Section 9.A above, the terms of the Plan shall
continue in effect, except that any amount payable under Section 6.B. due to an
applicable termination of employment occurring after the Change in Control
shall not be reduced to a prorated amount.

-9-

APPENDIX A

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 XL Re CAGR /
 Industry CAGR

 	
  

 	
 0.75

 	
  

 	
 0.85

 	
  

 	
 1.00

 	
  

 	
 1.15

 	
  

 	
 1.25

 	
  

 	
 1.50

 	
  

 
	
 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 	

 

 	
  

 
	
 Standalone
 Payout for Growth

 	
  

 	
 50%

 	
  

 	
 75%

 	
  

 	
 100%

 	
  

 	
 115%

 	
  

 	
 135%

 	
  

 	
 150%

 	
  

 
	
 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 	

 

 	

 

 	
  

 
	
 CR

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 90

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 
	
 89

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 2,400

 	
  

 	
  

 	
 2,800

 	
  

 	
  

 	
 3,000

 	
  

 
	
 88

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 —

 	
  

 	
  

 	
 4,000

 	
  

 	
  

 	
 4,600

 	
  

 	
  

 	
 5,400

 	
  

 	
  

 	
 6,000

 	
  

 
	
 87

 	
  

 	
  

 	
 3,300

 	
  

 	
  

 	
 5,000

 	
  

 	
  

 	
 6,600

 	
  

 	
  

 	
 7,600

 	
  

 	
  

 	
 9,000

 	
  

 	
  

 	
 10,000

 	
  

 
	
 86

 	
  

 	
  

 	
 4,600

 	
  

 	
  

 	
 7,000

 	
  

 	
  

 	
 9,200

 	
  

 	
  

 	
 10,600

 	
  

 	
  

 	
 12,400

 	
  

 	
  

 	
 13,800

 	
  

 
	
 85

 	
  

 	
  

 	
 5,900

 	
  

 	
  

 	
 8,800

 	
  

 	
  

 	
 11,800

 	
  

 	
  

 	
 13,600

 	
  

 	
  

 	
 16,000

 	
  

 	
  

 	
 17,800

 	
  

 
	
 84

 	
  

 	
  

 	
 7,200

 	
  

 	
  

 	
 10,800

 	
  

 	
  

 	
 14,400

 	
  

 	
  

 	
 16,600

 	
  

 	
  

 	
 19,400

 	
  

 	
  

 	
 21,600

 	
  

 
	
 83

 	
  

 	
  

 	
 8,500

 	
  

 	
  

 	
 12,800

 	
  

 	
  

 	
 17,000

 	
  

 	
  

 	
 19,600

 	
  

 	
  

 	
 23,000

 	
  

 	
  

 	
 25,600

 	
  

 

Relative CAGR and CR between
the amounts set forth above will result in interpolated Award Amounts, as
determined by the Committee.

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}]]