Thomas W. Jasper

Employment Agreement

Separation Agreement

 

Richard Claiden

Employment Agreement

 

 

 

 

 

EMPLOYMENT AGREEMENT

 

 

PRIMUS ASSET MANAGEMENT, INC.

 

360 MADISON AVENUE 23RD FLOOR

 

 

 

NEW YORK, NEW YORK 10017

 

 

 

212.697.3150 FAX 212.697.3731

 

June 13, 2008

Thomas W. Jasper

Dear Tom:

This amended and restated letter agreement (the “Letter Agreement”) sets forth the terms and conditions of your continued employment with Primus Asset Management, Inc., a Delaware corporation (the “Company”).

1.

Term. The initial term of your employment under this Letter Agreement will begin on May 1, 2008 (the “Effective Date”) and continue until the third anniversary date thereof (the “Initial Term”). Following the Initial Term, your employment under this Letter Agreement will be automatically extended for one-year periods (each, an “Additional Term”), unless you provide the Company, or the Company provides you, with at least 6 months advance written notice prior to the end of the Initial Term or any Additional Term that this Letter Agreement will terminate. The period from the Effective Date until such anniversary date with respect to which notice is provided will be referred to as the “Term,” and the period during which you are employed by the Company pursuant to this Letter Agreement will be referred to as the “Employment Period.”

 

2.

Position; Duties. You will continue to hold the position of Chief Executive Officer of Primus Guaranty, Ltd (“PGL”). You will report to the Board of Directors of the Company, and will perform such duties as may be specified by the Board from time to time not inconsistent with your position as Chief Executive Officer. You agree to use your best efforts to perform such duties faithfully, to devote all of your working time to the business of the Company and its subsidiaries and affiliates, and while you remain employed by the Company, you will not engage in any other business activity that is in conflict with your duties and obligations to the Company and its subsidiaries and affiliates. During the Employment Period, the Company agrees to cause PGL to nominate you to serve as a member of its Board of Directors, provided that following a Change in Control (as defined in Section 7(i) below), the Company shall have no such obligation.

 

 





3.

Base Salary. During the Employment Period you will be paid a base salary at an annual rate of $600,000, payable in accordance with the normal payroll practices established by the Company (“Base Salary”). Your Base Salary will be reviewed at least once in each calendar year, starting in 2009, and may be subject to upward (but not downward) adjustment.

 

4.

Annual Bonus. With respect to each fiscal year of the Company that ends during the Employment Period, you will have an opportunity to earn a bonus of 200% of your Base Salary based on targeted level of performance (the “Annual Bonus”). Your Annual Bonus will primarily be based on the achievement of certain performance objectives that are established pursuant to the PGL Annual Performance Bonus Plan, or such other plan as may be in effect from time to time. The Annual Bonus will be paid in such combination of cash and an award based on shares of PGL (“Shares”) as determined by the Compensation Committee of PGL in its discretion, after consultation with you. Although it is expected that 50% of the Annual Bonus will generally be paid in cash and 50% will be paid in the form of Shares or Share units subject to 3-year vesting, the actual Annual Bonus paid to you may deviate from that form or percentage. The cash portion of the Annual Bonus for a fiscal year will be payable in the following year as soon as practicable following the release of financial statements for such fiscal year (the “Cash Bonus Payment Date”). Except as provided in Section 7 below, the cash portion of the Annual Bonus will not be paid to you unless you remain employed by the Company through the date of payment.

 

5.

Equity Awards.

(a) Long Term Incentives. On or about each of the first three anniversaries of the Cash Bonus Payment Date, you will receive a long term incentive award with a value equal to $1,600,000, for a total award value of $4,800,000 (the “Long Term Incentive”). Fifty percent (50%) of the Long Term Incentive will be in the form of either performance shares (“Performance Shares”) or options to purchase Shares (“Options”). Performance Shares will be valued based on the market price on the date of grant of the number of Performance Shares payable at target level of performance. The number of Performance Shares actually delivered will depend on attainment of performance goals, determined by the Compensation Committee of PGL. Options will be valued based on the Black Scholes value of such Options on the date of grant with an exercise price equal to the fair market value on the date of grant. The Performance Shares will be granted pursuant to the Incentive Plan and will cliff vest on the third anniversary of the grant date, based on achievement of certain return on equity targets to be mutually determined by you and the Company, provided you remain employed by the Company through the applicable vesting date (except as provided in Section 7(c)). The remaining fifty percent (50%) of the Long Term Incentive will be in the form of a restricted stock unit (each, an “RSU”) or Options. RSUs will be valued based on the market price of a Share on the date of grant, and the Options will be valued based on the Black Scholes value of such Options on the date of grant with an exercise price equal to the fair market value on the date of grant. The RSUs or Options, as applicable, will be granted pursuant to the Incentive Plan and will vest 1/3 on each of the three anniversaries of the grant date, provided you remain employed

 

 

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by the Company through the applicable vesting date (except as provided in Section 7(c)). The RSUs will be settled in Shares upon vesting. During the Employment Period, the Compensation Committee of PGL may grant you additional annual and/or long term incentive awards at its discretion.

(b) Change in Control. Notwithstanding anything herein, the Incentive Plan or any award agreement to the contrary, upon a Change in Control, each Stock Award (including any theretofore granted Long Term Incentive) then-outstanding shall immediately vest (assuming the targeted level of performance would have been achieved, where applicable), and shall be treated in accordance with the terms of the plans pursuant to which they were granted.

6.

Benefits. During the Employment Period, the Company will provide you with such vacation, fringe benefits and insurance coverages that it will establish for its senior executives and their families, including coverages for medical, dental, prescription drugs, vision, death and disability. You will also be entitled to participate in any future executive compensation plans established by the Company or PGL at a level commensurate with your position with the Company, other than the PGL Senior Management Severance Pay Plan.

 

7.

Termination.

(a) Generally. Notwithstanding the Term of this Letter Agreement, your employment with the Company will be at-will, meaning that you will be free to resign from the Company and the Company will be free to terminate your employment at any time. Upon any such termination or resignation during or upon expiration of the Term, you will be entitled to any Base Salary earned and accrued but not yet paid, any reimbursable business expenses incurred but not yet reimbursed, and any benefit to which you (or members of your family) may be entitled to under the Company’s benefit plans as of the date of termination. In addition, except as provided below, any Stock Award (as defined below) that is an option and that is or becomes vested upon your termination of employment shall remain exercisable for the 90 day period following such termination of employment, subject to the terms of the applicable plan pursuant to which such share option was granted; provided, however, that if such termination is initiated by the Company for Cause, all options shall immediately terminate.

(b) Death/Disability. In addition to the entitlements set forth in subparagraph (a) above, in the event that, prior to expiration of the Term, your employment terminates on account of your death or is terminated by the Company on account of your Disability, the Company will make a cash payment to you or your beneficiaries, as applicable, equal to (i) if such termination occurs after the end of a fiscal year and before the Cash Bonus Payment Date in respect of such year, the Annual Bonus, if any, that would have been payable for such fiscal year, to the extent such Annual Bonus has not already been paid, and (ii) the Annual Bonus, if any, that would have been paid to or earned by you for the fiscal year in which such termination occurs, determined as if applicable performance targets

 

 

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were achieved at 100%, payable at such time and in such amount that would have been paid had your employment not so terminated, multiplied by a fraction, the numerator of which is the number of days in the fiscal year that you were employed by the Company prior to your date of termination, and the denominator of which is 365 (the “Prorated Bonus”). In addition, any award relating to Shares, or any securities or other consideration into which such Shares are converted in connection with a Change in Control, whether granted pursuant to the Incentive Plan or otherwise (a “Stock Award”) outstanding at the time of your termination of employment that would have become vested solely by reason of your having remained employed by the Company (a “Service-Based Stock Award”) shall become fully vested. Any Stock Award that would have become vested by reason of both your having remained employed by the Company through the end of a specified performance period, and the Company or PGL achieving a pre-established level of performance during such performance period (a “Performance-Based Stock Award”), shall vest on the assumption that targeted level of performance would have been achieved, and such vesting shall be prorated to reflect the portion of the performance period that you were actually employed. Any Stock Award that is an Option and that is or becomes vested upon your termination of employment by reason of your death or Disability shall remain exercisable for the one year period following such termination of employment, subject to the terms of the applicable plan pursuant to which such option was granted.

(c) Terminations Triggering Severance. In addition to the entitlements set forth in subparagraph (a) above, in the event that (x) your employment is terminated by the Company for any reason other than for Cause or your Disability prior to expiration of the Term, or (y) you terminate your employment for Good Reason prior to expiration of the Term, you will be entitled to receive the severance benefits described in subparagraph (d) below.

(d) Severance Benefits. Upon a termination of your employment described in subparagraphs (c) above, and subject to satisfaction of the conditions set forth in subparagraph (f) below, the Company will (i) make a cash payment to you equal to two (2) times the sum of your Base Salary and Annual Bonus (assuming achievement of targeted level of performance) in effect at the time of such termination of employment, one-half of which shall be payable in accordance with the Company’s normal payroll practices over the one year period following your termination of employment, and the remainder of which shall be payable in one lump sum at the end of such one year period, (ii) make a cash payment to you equal to the Prorated Bonus, (iii) if such termination occurs after the end of a fiscal year and before the Cash Bonus Payment Date in respect of such year, make a cash payment to you equal to the Annual Bonus, if any, that would have been payable for such fiscal year, to the extent such Annual Bonus has not already been paid, (iv) continue health coverage for the two year period following such termination of employment on the same basis that such coverage is provided to senior executives of the Company and their families during such period, and (v) vest, on the first anniversary of such termination, all Service-

 

 

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Based Stock Awards (including any theretofore granted Long Term Incentive) that are unvested and outstanding at the time of such termination, and any such Options shall remain exercisable for the one year period following the first anniversary of your termination of employment, and if such termination occurs within the 24 month period following a Change in Control, vest, on the first anniversary of such termination, all Performance-Based Stock Awards (including any theretofore granted Long Term Incentive) on the assumption that targeted level of performance would have been achieved, provided that such vesting shall be prorated to reflect the portion of the performance period that you were actually employed. Except as provided in this Section 7(d), in the event that your employment is terminated pursuant to Section 7(c), any amounts payable to you under Section 7(d) shall be paid to you immediately following your date of termination; provided, however, that in the event your employment is terminated pursuant to Section 7(c) and you are a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the date of termination), any amounts that would otherwise be payable under this Section 7(d) on account of your termination of employment (other than in the event of your death, in which case such amounts shall be paid as soon as reasonably practicable following your death) during the six-month period immediately following the date of your “separation from service” within the meaning of Section 409A of the Code shall be paid to you on the first business day after the date which is six months following your “separation from service” (the “Delayed Payment Date”).

(e) Expiration of the Term. If your employment with the Company is terminated upon expiration of the Term, i.e. upon the end of the Initial Term or any Additional Term, regardless of which party provided the notice or initiated the termination (except where expiration of the Term occurs within 24 months following a Change in Control pursuant to notice that is provided by the Company following a Change in Control pursuant to Section 1 above), you shall not be entitled to the severance benefits described in subparagraph (d) above, but (i) if such termination occurs after the end of a fiscal year and before the Cash Bonus Payment Date in respect of such year, you shall be entitled to the Annual Bonus, if any, that would have been payable for such fiscal year, to the extent such Annual Bonus has not already been paid, and (ii) you shall immediately vest in each Service-Based Stock Award outstanding at the time of such termination of employment, and any such Options shall remain exercisable for the one year period following the date of termination of employment. Any Performance Based Stock Award (including the portion, if any, of the Long Term Incentive Award granted prior to your date of termination) shall continue to vest on the same basis as such awards would have vested had you been employed for the period commencing on the date of such termination and ending on the date that you engaged in Competitive Activities (as defined in Section 12 below), subject to the achievement of the relevant performance objectives. If your employment with the Company is terminated upon expiration of the Term, i.e. upon the end of the Initial Term or any Additional Term within 24 months following a Change in Control pursuant to notice that is provided by the Company following a Change in Control pursuant to Section 1 above, you shall be treated as if you were terminated pursuant to Section 7(c) above.

 

 

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(f) Conditions. Your entitlement to receive, or continue to receive, the severance benefits, vesting and extended exercisability set forth in subparagraphs (d) and (e) above shall be conditioned upon (i) your execution of a release of claims in favor of the Company and its subsidiaries and affiliates in substantially the form attached as Exhibit C, and such release becoming irrevocable, as provided in such release, and (ii) your compliance with Sections 9 through 13 below. In the event of your breach of any of the provisions of such Sections, no further severance payments or benefits will be provided, and any unvested Stock Awards shall be immediately forfeited.

(g) No Mitigation. The amount and duration of the severance payments provided in subparagraph (d) above shall not be subject to a duty to mitigate and shall not be reduced by the amount of compensation that you receive from another employer, whether as a director, employee or consultant; provided, however, the Company’s obligation set forth above to continue your health coverages will terminate no later than the date you become eligible for comparable coverage under another group health plan, and you agree to notify the Company of your eligibility for any such coverage.

(h) Offset. The Company may offset from any amount payable under subparagraph (d) above any amount you owe to the Company or any of its subsidiaries and affiliates.

(i) Definitions. For purposes of this Letter Agreement, the following terms shall have the meaning set forth below:

 

 

“Cause” shall mean a finding by of a majority of the Company’s Board of Directors (excluding you, if you are a director) at a meeting in which you will have an opportunity to participate that you have:

 

 

 

(i)

materially failed, refused or neglected to perform your job functions (other than by reason of a physical or mental impairment) that continued after you have been provided adequate and specific notice thereof;

 

 

 

(ii)

failed to comply with any material term of this Letter Agreement or any material term of any written Company policy that is applicable and has been communicated to you, which failure continued after you have been provided adequate and specific notice thereof;

 

 

 

(iii)

committed an act of fraud or embezzlement against the Company or its subsidiaries and affiliates; or

 

 

 

(iv)

been convicted of, or entered a plea of guilty or nolo contendere to, a felony or misdemeanor involving moral turpitude.

 

 

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“Disability” shall mean your continuous inability by reason of a physical or mental illness, injury or impairment to perform the duties assigned to you for a period of six consecutive calendar months.

 

 

 

“Change in Control” shall mean:

 

 

 

(i)

In any twelve (12) month period, the acquisition by any “Person” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)), excluding PGL or any of its subsidiaries or any employee benefit plan sponsored by any of the foregoing, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of PGL representing, immediately following such acquisition, 30% or more of the voting power with respect to the election of directors;

 

 

 

(ii)

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

 

 

 

(iii)

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

 

 

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“Good Reason” shall mean:

 

 

 

(i)

any material breach by the Company of its obligations under this Letter Agreement, after you have given the Company written notice and an opportunity to cure such breach;

 

 

 

(ii)

a material and adverse diminution of your job duties or responsibilities as Chief Executive Officer of the Company, taking into account the Company’s size, status as a public company and capitalization as of the date of this Letter Agreement, after you have given the Company written notice and an opportunity cure such change or diminution; or

 

 

 

(iii)

a relocation of your principle place of employment by more than 50 miles from New York City.

 

8.

Special Tax Gross-Up

(a) Gross-Up. The Company will pay to you an amount (the “Gross-Up Payment”) that, on an after-tax basis (including federal income and excise taxes, social security and Medicare taxes and state and local income taxes) equals the excise tax imposed on you under Section 4999 of the Code (the “Excise Tax”) by reason of amounts payable under this Letter Agreement, as well as other amounts payable outside this Letter Agreement by the Company or any of its subsidiaries and affiliates that are described in Section 280G(b)(2)(A)(i) of the Code. For purposes of this subsection, you shall be deemed to pay federal, state and local income taxes at the highest marginal rate of taxation. The Gross-Up Payment shall in all events be paid by the Company to you by 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 and penalties thereon) is remitted by you to the appropriate taxing authorities.

(b) Cut-Back. Notwithstanding Section 8(a), no payment shall be made thereunder, and amounts payable under this Letter Agreement and, if necessary, amounts payable outside of this Letter Agreement by the Company or any of its subsidiaries and affiliates that are described in Section 280G(b)(2)(A)(i) of the Code, shall be reduced to the extent necessary to avoid any portion of any such payment being treated as a “parachute payment” within the meaning of Section 280G(b)(2) of the Code if, after such reduction, you would retain 90% of the amount that would otherwise be payable without regard to this Section 8(b). Reductions to be made under this Section 8(b) shall first be applied to amounts payable in cash, then to non-cash benefits other than acceleration of vesting, and then to acceleration of vesting.

(c) Determinations. Determinations of the Excise Tax and the amount of the Gross-Up Payment or reduction to be made pursuant to Section 8(a) or (b) shall be made by the Company. If it is subsequently determined by the Internal

 

 

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Revenue Service (“IRS”) that the Excise Tax is greater than the amount so determined, the Company shall recalculate the Gross-Up Payment or reduction to be made pursuant to Section 8(a) or (b), and make any appropriate payment to you. The Company, at its cost, may, on your behalf, challenge any assessment or imposition of any such excise tax by the IRS, and you reasonably assist and cooperate with the Company, at the Company’s expense, with respect to any such challenge. Should you receive a refund of any excise tax previously paid, you shall repay to the Company the portion of any Gross-Up Payment made in respect of the Excise Tax so refunded you agree that you will with respect to the applicability of the Excise Tax, take a position consistent with that of the Company at all times.

9.

Return of Property. You agree that upon termination of your employment with the Company for any reason, you will immediately resign all officer and director positions you may have with the Company or any of its subsidiaries and affiliates. You further agree that you will as promptly as practicable deliver to the Company all documents, correspondence, memoranda, notes, records, reports, plans, designs, studies and any other papers or items made or received by you in connection with your employment with the Company (including without limitation documents prepared by you or which may have come into your possession in the course of your employment hereunder) that are reasonably necessary to the on-going functioning of the Company (whether or not constituting confidential information) or its subsidiaries and affiliates, and all computer equipment, disks and software, keys, credit cards, books and other property of the Company or its subsidiaries and affiliates then in your possession.

 

10.

Proprietary Information. You understand that your work with the Company will involve access to and creation of confidential (including trade secrets) and proprietary information of the Company and its subsidiaries and affiliates (collectively “Proprietary Information”) and recognize that it is in the legitimate business interest of the Company and its subsidiaries and affiliates to restrict your disclosure or use of Proprietary Information. You therefore agree that you will maintain the confidentiality of, and will never use or disclose, or authorize any other person or entity to use or disclose, any Proprietary Information, other than in connection with your employment as necessary to further the business objectives of the Company or its subsidiaries and affiliates or as may be required by law or legal process or as may be required for you to enforce your rights under this Letter Agreement or as a stockholder of PGL. The term Proprietary Information includes, by way of example and without limitation, matters of a technical nature, such as software design and specifications, financial models, scientific, trade and engineering secrets, “know-how”, formulas, secret processes, drawings, works of authorship, machines, inventions, computer programs (including documentation of such programs), services, materials, patent applications, new product plans, other plans, technical information, technical improvements, manufacturing techniques, specifications, manufacturing and test data, progress reports and research projects, and matters of a business nature, such as business plans, prospects, financial information, proprietary information about

 

 

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costs, profits, markets, sales, lists of customers and suppliers of the Company and its subsidiaries and affiliates, the management, operation and planning of the Company and its subsidiaries and affiliates, procurement and promotional information, credit and financial data concerning customers or suppliers of the Company and its subsidiaries and affiliates, and other information of a similar nature to the extent not available to the public, and plans for future development, but does not include any information that has been publicly disclosed or was known to you prior to accepting employment with the Company.

11.

Innovations. You agree to promptly and fully disclose to the Company all ideas, inventions, discoveries, creations, designs, materials, works of authorship, trademarks, and other technology and rights (and any related improvements or modifications thereof), whether patentable or not, copyrightable or not, or otherwise protectable or not under any form of legal protection afforded to intellectual property (collectively, “Innovations”), relating to any activities of the Company and its subsidiaries and affiliates, conceived or developed by you alone or with others during the Employment Period or any prior term of employment with the Company or its subsidiaries and affiliates, whether or not conceived during regular business hours. Such Innovations shall be the sole property of the Company. To the extent possible, such Innovations shall each be considered a Work Made For Hire by you for the Company within the meaning of the U.S. Copyright Act. To the extent such Innovations may not be considered such a Work Made For Hire, you hereby assign to the Company, without additional consideration, any right, title, or interest you may now have in such Innovations, and going forward, you agree to automatically assign to the Company at the time of creation of the Innovations, without additional consideration, any right, title, or interest you may have in such Innovations. You will (whether during or after your employment with the Company) execute such written instruments and do other such acts as may be necessary in the reasonable opinion of the Company to obtain a patent, register a copyright, or otherwise protect or enforce the Company’s rights in such Innovations. You agree to assist the Company in obtaining or maintaining for itself at its own expense United States and foreign patents, copyrights, trade secret protection or other protection of any and all Innovations.

 

12.

Competing Businesses. You agree that, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, during the Employment Period and, if your employment is terminated under circumstances described in Section 7(c), for a period of 12 months thereafter, you will not directly or indirectly, on your own behalf or as a partner, officer, director, employee, agent, consultant or stockholder (other than as the holder of 1% or less of the voting capital stock of any corporation with a class of equity securities registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended) engage in or render services to any person or entity engaged in the development or sale of financial products related to credit enhancement, or that is a dealer with respect to such products, where your activities will relate to financial products offered by the

 

 

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Company or one of its subsidiaries or affiliates at the time of your termination of employment (“Competitive Activities”). In the event of a termination of your employment other than pursuant to Section 7(c), the Company may elect, by providing you written notice within 10 days of such termination, to provide you with a payment equal to 2.5 times your Base Salary, payable in accordance with the Company’s normal payroll practices over the one year period following your termination of employment in, and exchange therefore you agree not to engage in Competitive Activities during such one year period. The Company may, at any time during such one-year period, cease making such payments, at which time you will be relieved of your obligation not to engage in Competitive Activities. The period following your termination of employment during which this Section 12 applies is referred to as the “Restricted Period”. If, in any judicial proceeding, a court shall refuse to enforce this covenant because the time limit is too long or because it is more extensive than necessary to protect the business and goodwill of the Company, it is understood and agreed between the parties that for purposes of such proceeding such time limitation and areas of enforcement shall be reformed to the extent necessary to permit enforcement of such covenant.

13.

Business Relationships. You acknowledge that the relationships of the Company and its subsidiaries and affiliates with their employees, customers and vendors are valuable business assets. You agree that, during the Employment Period and during the Restricted Period, you will not directly or indirectly (for yourself or for any third party) divert or attempt to divert from the Company or its subsidiaries and affiliates any business, employee, customer or vendor, through solicitation or otherwise. Further, you agree not to make any disparaging remarks or comments with respect to the Company and its subsidiaries and affiliates.

 

14.

Nondisparagement. You agree that you will not issue any communication or statement that disparages the Company or any of its subsidiaries and affiliates, except if testifying truthfully under oath pursuant to subpoena or other legal process or otherwise responding to or providing disclosures required by law in connection with an investigation by a governmental or law enforcement agency. The Company will not, and will use reasonable efforts to cause its senior executive officers to not, issue any communication or statement that disparages you, except if testifying truthfully under oath pursuant to subpoena or other legal process or otherwise responding to or providing disclosure required by law in connection with an investigation by a governmental or law enforcement agency. Notwithstanding the foregoing, nothing in this Section 14 shall be construed so as to preclude the Company or any of its subsidiaries and affiliates from fairly and accurately discussing, reporting or communicating, orally or in written form, concerning the performance of the business of the Company or any of its subsidiaries and affiliates during your employment.

 

15.

Enforcement. You agree that: (i) the covenants set forth in Sections 9 through 13 are reasonable in all respects, including, where applicable, geographical and temporal scope, and (ii) the Company would not have entered into this Letter Agreement but for your covenants contained therein, and (iii) the covenants

 

 

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contained therein have been made in order to induce the Company to enter into this Letter Agreement. If, at the time of enforcement of Sections 9 through 13, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. You recognize and affirm that in the event of your breach of any provision of Sections 9 through 13, money damages would be inadequate and the Company would have no adequate remedy at law. Accordingly, you agree that in the event of a breach or a threatened breach by you of any of the provisions of Sections 9 through 13, the Company, in addition and supplementary to other rights and remedies granted by law existing in its favor (including recovery of damages and costs (including reasonable attorneys’ fees)), may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security).

16.

Indemnification. To the fullest extent permitted by law, the Company will indemnify you and hold you harmless from all claims arising from any action taken by you, or your failure to act, within the scope of your authority as an officer or director of the Company and/or its subsidiaries and affiliates, unless the action or omission is fraudulent or constitutes willful misconduct or gross negligence. You shall also be covered under any directors & officers liability insurance policy secured by the Company.

 

17.

Withholding. The Company shall have the right to withhold from any amount payable hereunder an amount necessary in order for the Company to satisfy any withholding tax obligation it may have under applicable law.

 

18.

Legal Fees. The Company agrees to reimburse you for your legal fees incurred in connection with the negotiation and review of this Letter Agreement, up to a maximum of $20,000, upon the presentation to the Company by you of appropriate substantiation of such fees.

 

19.

No Conflicts; Proper Authorization. You represent and warrant to the Company that your acceptance of continued employment and the performance of your duties for the Company will not conflict with or result in a violation or breach of, or constitute a default under any contract, agreement or understanding to which you are or were a party or of which you are aware and that there are no restrictions, covenants, agreements or limitations on your right or ability to enter into and perform the terms of this Letter Agreement. The Company represents and warrants to you that the terms of this Letter Agreement have been fully authorized and approved by the Board of Directors of the Company.

 

 

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20.

Governing Law. The terms of this Letter Agreement and any action arising thereunder, shall be governed by and construed in accordance with the domestic laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

21.

Dispute Resolution. Except for any claims or controversy relating to the enforcement of the restrictive covenants set forth in Sections 9 through 14 which may be brought in any court of competent jurisdiction, any other disputes arising out of this Letter Agreement, including claims of violations of federal or state discrimination statutes or public policy, shall be resolved pursuant to binding arbitration before a panel of three arbitrators serving under the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). In event of a dispute, a written request for arbitration shall be submitted to the New York, New York office of the AAA. The award of the arbitrators shall be final and binding and judgment upon the award may be entered in any court having jurisdiction thereof. Except as otherwise provided above, this procedure shall be the exclusive means of settling any disputes that may arise under this Letter Agreement. All fees and expenses of the arbitrators and all other expenses of the arbitration, except for attorneys’ fees and witness expenses, shall be shared equally by you and the Company. Each party shall bear its own witness expenses and attorneys fees, provided, however, the Company will reimburse you for your legal fees in connection with any such dispute where you are found to be the prevailing party by the arbitrator and/or court.

 

22.

Entire Agreement. This Letter Agreement supersedes all previous and contemporaneous communications, agreements and understandings, whether oral or written, between you, on the one hand, and the Company, PGL or any of their subsidiaries and affiliates or predecessors, on the other hand (including the employment letter between you and Primus Corporate Services Inc., dated March 12, 2002 and the employment letter between you and the Company, dated August 16, 2004), and constitutes the sole and entire agreement between you and the Company pertaining to the subject matter hereof.

 

23.

Survival. You acknowledge that the provisions of Sections 9 through 14, 20 and 21 shall survive termination of this Letter Agreement upon expiration of the Term.

 

24.

Counterparts. This Letter Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become a binding agreement when one or more counterparts have been signed by each party and delivered to the other party.

 

25.

Notices. Any notice, request, or instruction to be given hereunder shall be in writing and shall be deemed given when personally delivered or three days after being sent by United States certified mail, postage prepaid, with return receipt requested to, the parties at their respective addresses set forth below:

 

 

13

 





To the Company:

Primus Guaranty, Ltd.

360 Madison Avenue

23rd Floor

New York, NY 10017

To you:

Mr. Thomas W. Jasper

26.

Opportunity to Consult with Counsel. You acknowledge and affirm that you have had the opportunity to consult with an attorney prior to signing this Letter Agreement.

 

 

14

 





 

If the foregoing is acceptable to you, kindly sign and return to me one copy of this Letter Agreement, and this Letter Agreement shall constitute a binding agreement between you and the Company.

 

 

 

Sincerely yours,

 

 

Primus Asset Management, Inc

 

By: 


/s/ Richard Claiden

 

 

 

Name: Richard Claiden

 

 

 

Title: Chief Financial Officer

 

AGREED TO AND ACCEPTED:

 

 

 


/s/ Thomas W. Jasper

 

 

Thomas W. Jasper

 

 

 

 

 

15

 


 

EX-10.4 5 c08324exv10w4.htm EXHIBIT 10.4

EXHIBIT 10.4

Primus Asset Management, Inc.
360 Madison Avenue
New York, NY 10017

CONFIDENTIAL

October 29, 2010

Thomas W. Jasper
39 Manursing Avenue
Rye, NY 10580

Dear Tom:

The purpose of this letter agreement (the “Agreement”) is to confirm the terms regarding your separation of employment from Primus Asset Management, Inc. (the “Company”). As more fully set forth below, the Company desires to provide you with certain payments and benefits in exchange for certain agreements by you. This Agreement shall become effective on the eighth (8th) day following your signing and delivering the Agreement to the Company, provided you do not revoke the Agreement as described in Section 17 below (the “Effective Date”).

 

1.

 

Separation of Employment. You acknowledge that your employment with the Company will terminate effective as of November 1, 2010 (the “Separation Date”). You hereby resign from all positions as an officer and director of the Company, Primus Guaranty, Ltd. (“Primus Guaranty”) and their subsidiaries and affiliates as of the Separation Date. You acknowledge that from and after the Separation Date, you shall have no authority with respect to the Company and its subsidiaries and affiliates and you shall not be, and shall not represent yourself as, an officer, employee or director of the Company or its subsidiaries and affiliates. By no later than the Separation Date, the Company will provide you with your final paycheck, which will include all salary owed to you for work performed through the Separation Date for the Company and its subsidiaries and affiliates. You confirm that you have no accrued, but unused vacation time.

 

 


 

 

2.

 

Payments and Benefits. In exchange for the mutual covenants set forth in this Agreement, and provided you sign, return and do not revoke this Agreement, including the release of claims contained herein, the Company agrees to provide you with the following:

 

a.

 

A lump sum cash payment of $500,000, in lieu of your 2010 annual bonus, which shall be paid within 21 days after the Separation Date.

 

 

b.

 

A lump sum cash payment of $750,000, in lieu of the 2011 equity awards that were to be valued at $1.6 million and granted to you under the employment letter agreement between you and the Company as amended and restated on June 13, 2008 (the “Employment Agreement”). The $750,000 lump sum payment shall be paid within 21 days after the Separation Date.

 

c.

 

A cash payment in the aggregate amount of $250,000, which shall be paid as additional consideration for the covenants described in Section 6 of this Agreement. This payment will be made in equal payroll installments over the 12-month period following the Separation Date; provided, however, that any amounts that would otherwise be payable during the six-month period immediately following the Separation Date shall be postponed and paid to you on the first business day after the date that is six months after the Separation Date.

 

 

d.

 

Your outstanding stock options, restricted stock units, performance shares and deferred shares shall be subject to vesting and payment as described in Section 3 below.

 

e.

 

You (and your dependents) will have the right to elect to continue your medical and dental insurance under the Company’s benefit plan pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). In the event you elect to continue your coverage under the Company’s medical and dental plans and pay the applicable COBRA premiums, the Company shall reimburse you monthly for your COBRA premiums paid for such coverage each month for the period beginning on the Separation Date and ending on May 1, 2011. You (and your dependents) will receive a COBRA election packet under separate cover that sets forth the details of the continuation coverage available under COBRA. Except as provided herein, your active participation in the Company’s employee benefit plans shall cease effective as of the Separation Date.

 

 

f.

 

You acknowledge and agree that the payments provided in this Agreement shall be in full settlement and satisfaction of the amounts payable to you under the Employment Agreement, and are in addition to amounts otherwise due or owing to you by the Company. You acknowledge and agree that the payments under this Agreement are not intended to, and shall not constitute, a severance plan, and shall confer no benefit on anyone other than the parties hereto. You further acknowledge that except for the specific consideration set forth in this Agreement, you are not and shall not in the future be entitled to, and you are not owed, any other compensation including, without limitation, wages, bonuses, vacation pay, holiday pay or any other form of compensation benefit. You further acknowledge that the payments provided in this Agreement exceed any payment, benefit, or other thing of value to which you might otherwise be entitled under any policy, plan or procedure of the Company and/or any agreement between you and the Company; and are just and sufficient consideration for the waivers, releases and commitments set forth herein; and no promise or inducement has been offered to you, except as expressly set forth herein, and you are not relying upon any such promise or inducement in entering into this Agreement.

 

2


 

 

3.

 

Equity Awards. In exchange for the mutual covenants set forth in this Agreement, and provided you sign, return and do not revoke this Agreement, including the release of claims contained herein, the Company confirms and agrees as follows regarding your outstanding equity awards:

 

a.

 

Restricted Stock Units. Your outstanding restricted stock units with respect to 822,395 Primus Guaranty shares (“RSUs”) shall become fully vested as of the Separation Date and shall be paid in Primus Guaranty shares within 21 days after the Separation Date.

 

 

b.

 

Options. Your outstanding options as listed on Exhibit A to this Agreement (“Options”) shall become fully vested as of the Separation Date. Your vested Options shall remain exercisable until the first to occur of (i) one year after the Separation Date; or (ii) the expiration of the maximum term of the Options under the applicable grant agreement. The Options shall remain subject to the terms and conditions of the Primus Guaranty, Ltd. Incentive Compensation Plan (the “Incentive Compensation Plan”) and the applicable grant agreements.

 

c.

 

Performance Shares. Your outstanding performance shares with respect to 161,128 Primus Guaranty shares (“Performance Shares”) shall remain outstanding and will be subject to vesting as follows:

Your Performance Shares will vest if the Primus Guaranty shares achieve the following prices on or before January 28, 2013, the third anniversary of the date of grant:

 

 

80,564 Performance Shares shall vest if a price of $5.50 is achieved; and an additional

 

 

80,564 Performance Shares shall vest if a price of $6.50 is achieved.

A price will be considered achieved if the closing price of the Primus Guaranty shares at the close of trading on the New York Stock Exchange (or other public exchange on which the shares are traded) equals or exceeds the specified price for each of 20 trading days during any 30 consecutive trading day period, and the date of such achievement will be the “PS Vesting Date.” A number of Primus Guaranty shares equal to the number of Performance Shares that vest on a particular PS Vesting Date will be delivered to you following certification by the Compensation Committee that the applicable price has been achieved, but no later than 60 days after the applicable PS Vesting Date.

 

3


 

Notwithstanding anything in any plan or agreement to the contrary:

 

(i)

 

The unvested Performance Shares shall vest in the event that a change in control of Primus Guaranty, as defined in the Incentive Compensation Plan (“Change in Control”), occurs and, on or after the date of the Change in Control, Primus Guaranty shares cease to be traded on all public securities exchanges for a period that is, at the time, long-term and indefinite;

 

(ii)

 

The unvested Performance Shares shall be forfeited immediately if you materially breach any of the terms and conditions of Section 9, 10 or 11 of the Employment Agreement or Section 6 of this Agreement and you do not cure such breach after being given a reasonable opportunity to cure;

 

 

(iii)

 

The unvested Performance Shares shall be forfeited if they do not vest according to this Agreement on or before January 28, 2013; and

 

(iv)

 

The terms of this Agreement shall replace and supersede any and all prior terms of grant of the Performance Shares.

The Company confirms that 80,563 performance shares under the January 2010 grant vested in October 2010 upon attainment of a share price of $4.50 per share and will be distributed to you at the same time as distributions are made to other employees.

 

d.

 

Deferred Shares. Your deferred restricted share units with respect to 390,658 Primus Guaranty shares (“Deferred Shares”) shall be paid to you in Primus Guaranty shares within five business days after the date that is six months after the Separation Date. Payment of your Deferred Shares shall be made pursuant to the terms of the Primus Restricted Share Unit Deferral Plan.

 

4.

 

Cooperation. You agree that through May 1, 2011, upon reasonable request by the Company or the Releasees, you shall cooperate fully with the Company and the Releasees (as defined in Section 7 below) in connection with any matter or event relating to your employment or events that occurred during your employment with the Company and its predecessors, including, without limitation, in the defense or prosecution of any claims or actions now in existence or which may be brought or threatened in the future against or on behalf of the Company and the Releasees, including any claims or actions against their affiliates and their respective members, shareholders, directors, officers and employees and including any transitional matters related to the transition of your role and responsibilities as a director and officer of the Company and Primus Guaranty to another individual. Your cooperation in connection with such matters, actions and claims shall include, without limitation, being available, upon reasonable notice, to meet with the Company and the Releasees regarding matters in which you have been involved, and any contract matters or audits; to prepare for, attend and participate in any proceeding (including, without limitation, depositions, consultation, discovery or trial); to provide affidavits; to assist with any audit, inspection, proceeding or another inquiry; and to act as a witness in connection with any litigation or other legal proceeding affecting the Company and the Releasees. You further agree that should you be contacted (directly or indirectly) by any person or entity (for example, by any party representing an individual or entity) adverse to the Company and the Releasees, you shall, to the extent permitted by law, promptly notify the General Counsel of Primus Guaranty. You shall be reimbursed for any reasonable costs and expenses incurred in connection with providing such cooperation under this section.

 

4


 

 

5.

 

Additional Covenants. You expressly acknowledge and agree to the following:

 

a.

 

You will continue to be subject to the Return of Property, Proprietary Information, Innovations, Nondisparagement and Enforcement provisions contained in Sections 9, 10, 11, 14 and 15 of your Employment Agreement, respectively;

 

 

b.

 

Other then as specifically provided in Section 3(c) of this Agreement, you shall receive no additional compensation or benefits in the event of a change in control of the Company, Primus Guaranty or any of their subsidiaries or affiliates;

 

c.

 

Nothing in this Agreement shall prohibit or restrict you, the Company and the Releasees, or their respective attorneys from: (i) making any disclosure of relevant and necessary information or documents in any action, investigation, or proceeding relating to this Agreement, or as required by law or legal process; or (ii) participating, cooperating, or testifying in any action, investigation, or proceeding with, or providing information to any self-regulatory organization, any governmental agency or legislative body, including but not limited to the Equal Employment Opportunity Commission (“EEOC”), or the Company’s Legal Department, and/or pursuant to the Sarbanes-Oxley Act; provided that, to the extent permitted by law, upon receipt of any subpoena, court order or other legal process compelling the disclosure of any such information or documents, the disclosing party gives prompt written notice to the other party so as to permit such other party to protect such party’s interests in confidentiality to the fullest extent possible. You acknowledge and agree, however, that pursuant to Section 7, you are waiving any right to recover monetary damages or any other form of personal relief in connection with any such action, investigation or proceeding. To the extent you receive any personal or monetary relief in connection with any such charge, action, investigation or proceeding, the Company will be entitled to an offset for the payments made in connection with Section 2 and Section 3 of this Agreement; and

 

 

d.

 

The material breach of any of the terms and conditions of Section 9, 10 or 11 of the Employment Agreement or Section 6 of this Agreement, if you fail to cure such breach after being given a reasonable opportunity to cure, shall constitute a material breach of this Agreement and shall relieve the Company of any further obligations hereunder.

 

5


 

 

6.

 

Business Relationships. You acknowledge that the relationships of the Company, Primus Guaranty and their subsidiaries and affiliates with their employees, customers and vendors are valuable business assets. You agree that, during the one-year period following the Separation Date (the “Restricted Period”), you will not directly or indirectly (for yourself or for any third party) divert or attempt to divert from the Company, Primus Guaranty or their subsidiaries and affiliates, any business, employee, customer or vendor, through solicitation or otherwise.

In addition, you agree during the Restricted Period to abstain from participating, in any capacity, directly or indirectly, without the Company’s prior written consent, in any plan or proposal to acquire control, or influence the management or policies, of the Company, Primus Guaranty or their subsidiaries, or any persons or entities known to you at the time to be affiliates of the Company or Primus Guaranty, or to advance claims on behalf of bondholders or counterparties to Primus Financial against the Company, Primus Guaranty or their subsidiaries and affiliates. You agree not to provide during the Restricted Period any advice or assistance to, or become associated with, XL Capital Limited, Second Curve Capital, LLC or AEGON U.S.A. Investment Management, LLC, in each case while such entity has a direct or indirect ownership interest in Primus Guaranty or the Company, or any other record or beneficial owner of 10% or more of any class of voting securities of Primus Guaranty as identified to you in writing by the Company or Primus Guaranty. You also agree during the Restricted Period to abstain from participating, in any capacity, directly or indirectly (including by providing advice to any person or entity), in any transaction or matter relating to the Company, Primus Guaranty or their subsidiaries and affiliates where your interests or the interests of any person or entity with whom you are associated, directly or indirectly, are in any way or could reasonably be adverse to the interests of, or on the opposite side of, the Company, Primus Guaranty or their subsidiaries or affiliates. Notwithstanding the foregoing, you may pursue discussions with third parties concerning potential credit insurance or credit default swap vehicles or opportunities provided that (i) you first consult with the board of directors of Primus Guaranty, (ii) Primus Guaranty gives you advance written confirmation that your discussions will not conflict with any current or future initiatives of the Company, Primus Guaranty or their subsidiaries or affiliates in this area, and (iii) you give Primus Guaranty advance written confirmation that your discussions will not result in the use or divulging of confidential or proprietary information of the Company, Primus Guaranty or their subsidiaries or affiliates.

If, in any judicial proceeding, a court shall refuse to enforce this covenant because the time limit is too long or because it is more extensive than necessary to protect the business and goodwill of the Company, Primus Guaranty and their subsidiaries and affiliates, it is understood and agreed between the parties that for purposes of such proceeding such time limitation and areas of enforcement shall be reformed to the extent necessary to permit enforcement of such covenant.

 

6


 

 

7.

 

Release of Claims. In return for the payments and benefits provided under this Agreement, and for other good and valuable consideration that you would not otherwise be entitled to, you hereby irrevocably and unconditionally release, remise, waive and forever discharge the Company and the Releasees (as defined below) from any and all agreements, promises, liabilities, claims, demands, rights and entitlements of any kind, at law or in equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, fixed or contingent, apparent or concealed, to the maximum extent permitted by law (“Claims”), which you, your heirs, executors, administrators, legal representatives, successors or assigns ever had, now have or hereafter can, shall or may have, against the Company and the Releases, based upon or arising from any set of facts, whether known or unknown to you, at any time on or prior to the date you execute this Agreement, including, but not in any way limited to, any and all matters arising out of, occurring or relating to your employment and/or termination thereof with the Company, other than those relating to your enforcement of the terms of this Agreement. This Release specifically includes, without limitation, any and all rights and Claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e); the Civil Rights Acts of 1866, 1871 and 1991; the Americans with Disabilities Act, 42 U.S.C. § 1201, et seq.; the Employee Retirement Income Security Act of 1974 (“ERISA”) (including but not limited to claims for breach of fiduciary duty under ERISA); the Rehabilitation Act of 1973; the Worker Adjustment and Retraining Notification Act, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993; the Equal Pay Act of 1963; the Age Discrimination in Employment Act, (29 U.S.C. § 621, et seq.) (“ADEA”); the Older Workers’ Benefits Protection Act; the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. § 1514A, also known as the Sarbanes-Oxley Act; the Genetic Information Nondiscrimination Act of 2008; the New York State Human Rights Law; the New York City Human Rights Law, and all amendments to the foregoing, and any and all other federal, state and/or local statutes, ordinances, regulations, common laws or constitutional provisions. For purposes of this Agreement, the term the “Company and the Releasees” means and includes the Company, Primus Guaranty, their past, present and future direct or indirect subsidiaries, divisions, insurers, direct or indirect corporate parents, affiliates, their past, present and future predecessors, successors and assigns, and their current, former and future partners, members, managers, officers, directors, employees, shareholders, representatives, agents, and attorneys, in their official and/or individual capacities, and all other related individuals and entities, jointly and individually, and this Release shall inure to the benefit of and shall be binding and enforceable by all such entities and individuals.

Notwithstanding the generality of the foregoing, nothing herein constitutes a release or waiver by you of: (i) any claim or right you may have under COBRA; (ii) any claim or right you may have for unemployment insurance benefits; (iii) any claim or right that may arise after the execution of this Agreement; (iv) any claim or right you may have under this Agreement; (v) any claim to vested benefits under the written terms of a qualified employee pension benefit plan; (vi) any claim under directors and officers insurance maintained by the Company or Primus Guaranty with respect to your service as an officer or director of the Company and Primus Guaranty, and any claim for indemnification you may have as a former officer and director under the certificate of incorporation or bylaws of the Company or Primus Guaranty or under applicable law, or (vii) any rights that you may have to obtain contribution in the event of the entry of judgment against you as a result of any act or failure to act for which both you and the Company are jointly responsible.

 

7


 

 

8.

 

Director and Officer Insurance. The Company agrees to continue to maintain directors’ and officers’ liability insurance covering you, on the same basis and terms as the Company provides generally for its active employees and directors, if such insurance is available under commercially reasonable terms, until such time as lawsuits against you with respect to your employment with the Company are no longer permitted by law, but not beyond six years after the Separation Date.

 

9.

 

Continued Use of Office Space and Administrative Assistant. You may continue to use your office in the Company’s New York City office at 360 Madison Avenue, 23rd Floor, New York, NY 10017 through December 31, 2010. During this time, the Company will continue to make available to you the reasonable use of a telephone and internet connectivity, as well as appropriate means of access necessary to gain entrance to the office. You agree to use your personal email address and not the Company’s email address after the Separation Date, although you may use the Company’s email address to receive (but not send) email on a transition basis and the Company will provide you a reasonable period for transition to a new computer and email address. You agree that you will not hold yourself out as an employee or director of the Company. Through December 31, 2010, you may continue to receive assistance from your current administrative assistant in the same capacity as before your Separation Date. You agree to indemnify and hold harmless the Company and the Releasees from any liability resulting from your use of the office space and the administrative assistance after the Separation Date. On or before December 31, 2010, you shall return to the Company all property that was provided to you pursuant to this Section 9.

 

 

10.

 

Joint Announcement. You and the Company shall agree on a joint announcement mutually acceptable to you and the Company regarding your termination of employment.

 

11.

 

Non-Admission. You understand and agree that this Agreement may not be cited as, and does not constitute any admission by the Company and the Releasees of, any violation or evidence of noncompliance with any federal, state, city, local or other statute, constitution, public policy, tort law, contract law, common law, rule, ordinance, or of any other wrongdoing, unlawful conduct, liability or breach of any duty whatsoever.

 

8


 

 

12.

 

Entire Agreement / Modification / Waiver / Choice of Law / Enforceability / Jury Waiver. You acknowledge and agree that this Agreement supersedes any and all prior or contemporaneous oral and/or written agreements between you and the Company, Primus Guaranty and their predecessors, and sets forth the entire agreement between you and the Company and the Releasees with respect to the subject matter hereof, except that you will continue to be bound by terms and your commitments under Sections 9, 10, 11, 14 and 15 of the Employment Agreement, which Sections shall remain in full force and effect. No variations or modifications hereof shall be deemed valid unless reduced to writing and signed by the parties hereto. The failure of the Company and the Releasees to seek enforcement of any provision of this Agreement in any instance or for any period of time shall not be construed as a waiver of such provision or the Company’s right to seek enforcement of such provision in the future. This Agreement shall be deemed to have been made in New York, and shall be governed by and construed in accordance with the laws of New York, without giving effect to conflict of law principles. You agree that any action, demand, claim or counterclaim relating to the terms and provisions of this Agreement, or to its formation or breach, shall be commenced in New York in a court of competent jurisdiction in New York, New York, and you further acknowledge that venue for such actions shall lie exclusively in New York and that material witnesses and documents would be located in New York. Both parties hereby waive and renounce in advance any right to a trial by jury in connection with such legal action.

 

 

13.

 

Legal Fees. The Company agrees to reimburse you for your legal fees in connection with the negotiation and review of this Agreement, up to a maximum of $25,000, upon the presentation to the Company by you of appropriate substantiation of such fees within 21 days after the Separation Date.

 

14.

 

Severability. The provisions of this Agreement are severable, and if for any reason any part hereof shall be found to be unenforceable, the remaining provisions shall be enforced in full; provided that, if any provision of Section 7 of this Agreement is held unenforceable by any court of law, and you proceed with any Claim (within the scope of Section 7 above) against the Company and the Releasees then you agree that the Company may seek to recoup from you the payments and benefits provided under Section 2 and Section 3 hereof, and the Company will be relieved from any further obligation to provide you with any further payments or benefits, or any other form of consideration or compensation described in this Agreement.

 

 

15.

 

Taxes. The Company shall withhold from any amounts payable under this Separation Agreement all federal, state, city, or other taxes or amounts as shall be required to be withheld pursuant to any law or governmental regulation or ruling. You shall be responsible for all taxes that may apply to any payment or benefit provided under this Agreement, except payroll taxes customarily withheld and paid by the employer. Each payment under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Internal Revenue Code, and in no event may you designate the calendar year of a payment under this Agreement.

 

9


 

 

16.

 

Agreement Not To Be Construed Against Its Drafter. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the parties.

 

 

17.

 

Acknowledgments. You hereby acknowledge that:

 

a.

 

The Company advises you to consult with an attorney before signing this Agreement;

 

 

b.

 

You have obtained independent legal advice from an attorney of your own choice with respect to this Agreement, or you have knowingly and voluntarily chosen not to do so;

 

c.

 

You freely, voluntarily and knowingly entered into this Agreement after due consideration;

 

 

d.

 

You have had a minimum of twenty-one (21) days to review and consider this Agreement;

 

e.

 

If you knowingly and voluntarily choose to do so, you may accept the terms of this Agreement before the twenty-one (21) day consideration period provided for in Section 17(d) above has expired;

 

 

f.

 

You have a right to revoke this Agreement by notifying the undersigned Company representative in writing within seven (7) days of your execution of this Agreement;

 

g.

 

In exchange for your waivers, releases and commitments set forth herein, including your waiver and release of all claims arising under the ADEA, the payments, benefits and other considerations that you are receiving pursuant to this Agreement exceed any payment, benefit or other thing of value to which you would otherwise be entitled, and are just and sufficient consideration for the waivers, releases and commitments set forth herein; and

 

 

h.

 

No promise or inducement has been offered to you, except as expressly set forth herein, and you are not relying upon any such promise or inducement in entering into this Agreement.

 

18.

 

Revocation by the Company. You agree that if you fail to execute and return this Agreement to the Company within twenty-one (21) days of your receipt of the Agreement for your review and consideration, the promises and agreements made by the Company herein will have been revoked.

 

10


 

 

19.

 

Notice. 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 four 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 as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

Primus Asset Management, Inc.
360 Madison Avenue, 23rd Floor
New York, NY 10017
Attn: General Counsel

with a copy to:

Mims Maynard Zabriskie, Esquire
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103

If to you:

Thomas W. Jasper, addressed to his most recent address on the Company’s books and records.

With a copy to:

Arthur Kohn
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006

or to such other address as any party hereto may designate by notice to the others.

By executing this Agreement, you are acknowledging that you have been afforded sufficient time to understand the terms and effects of this Agreement and all Exhibits hereto, that your agreements and obligations hereunder are made voluntarily, knowingly and without duress, and that neither the Company nor its agents or representatives have made any representations inconsistent with the provisions of this Agreement.

 

11


 

This Agreement may be signed on one or more copies, each of which when signed will be deemed to be an original, and all of which together will constitute one and the same Agreement.

If the foregoing correctly sets forth our understanding, please sign, date and return the enclosed copy of this Agreement to Vincent Tritto at the Company no later than November 19, 2010.

Very truly yours,

PRIMUS ASSET MANAGEMENT, INC.

 

 

 

 

 

 

 

By:

 

/s/ Vincent B. Tritto

 

 

 

Dated: October 29, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Confirmed and Agreed:

 

 

 

 

 

 

 

 

 

 

 

/s/ Thomas W. Jasper

 

 

 

Dated: October 29, 2010

 

 

 

 

 

Thomas W. Jasper

 

 

 

 

 

12


 

Exhibit A

Options

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant Date

 

Shares

 

 

Exercise Price

 

 

Expiration Date*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/15/03

 

 

50,000

 

 

$

6.94

 

 

 

11/1/11

 

2/15/04

 

 

61,250

 

 

$

9.76

 

 

 

11/1/11

 

2/1/07

 

 

200,000

 

 

$

11.75

 

 

 

11/1/11

 

2/15/06

 

 

65,000

 

 

$

12.74

 

 

 

11/1/11

 

10/5/04

 

 

78,750

 

 

$

13.50

 

 

 

10/4/11

 

 

 

 

 

*

 

The expiration date shown in the table is the earlier of (i) one year after the Separation Date or (ii) the maximum term of the options in the applicable grant agreement.

 

13

EX-10.2 2 c14722exv10w2.htm EX-10.2

EXHIBIT 10.2

[Letterhead of Primus Asset Management, Inc.]

February 2, 2011

Mr. Richard Claiden
[Address]

Re: Summary of Employment Terms — Letter of Understanding

Dear Richard:

On behalf of Primus Asset Management, Inc. (the “Company”), I am pleased to confirm the terms and conditions relating of your continuing employment with the Company. This letter agreement (“Agreement”) confirms our understanding of the terms and conditions of your employment on and after January 1, 2011.

Position and Term

You will serve as the Chief Executive Officer of the Company and of Primus Guaranty, Ltd. and its other subsidiaries (together with the Company, “Primus”). You will be a regular full-time employee of the Company, and you will have the duties, authority and responsibilities associated with your position, which may change from time to time.

You agree to use your best efforts to perform your assigned duties faithfully, to devote all of your working time to the business of Primus, and while you remain employed with the Company, you will not engage in any other business activity that is in conflict with your duties and obligations to Primus.

Subject to earlier termination as provided below, this Agreement and your employment hereunder shall terminate on December 31, 2013; provided that if the Company advises you in writing at least 90 days before such date that the term of the Agreement will be extended to a date not later than December 31, 2014, this Agreement and your employment hereunder shall terminate on the date set forth in such written notice from the Company. As used in this Agreement, the “End of the Term” means December 31, 2013 or such later date as is set forth in the written notice from the Company as described in the preceding sentence.

Compensation and Benefits

The salary for your position is $650,000 per annum (the “Base Salary”), commencing January 1, 2011 and payable semi-monthly in arrears or otherwise as the Company pays its employees. If the Company elects to extend your employment as described above, your Base Salary will be increased to $675,000 per annum for the extended period.

You shall be granted a long-term incentive award of 120,000 performance shares, which shall be subject to the terms of the grant letter separately provided to you.

 

 


 

The Company does not intend to pay annual bonuses for years after 2010, but will pay you an annual bonus in 2011 in respect of 2010.

During your employment, you will be entitled to participate in all employee benefit plans from time to time in effect for employees of the Company generally. These benefits currently include:

 

 

Medical, Drug and Dental Insurance, and Vision Coverage

 

 

Vacation in accordance with Company policy

 

 

 

A 401(k) plan with partial Company contribution matching

 

 

Sick leave, granted on an as-needed basis. (Sick leave taken beyond five business days per year will require medical explanation.)

All benefit plans are subject to amendment or termination by the Company at any time.

Termination of Employment

The Company may terminate your employment at any time without Cause by giving you 30 days’ advance written notice. The Company may terminate your employment immediately in the event of Cause. You may terminate your employment at any time by giving the Company 30 days’ advance written notice.

If you continue in employment through the End of the Term and your employment terminates without Cause at the End of the Term, you will receive severance pay and reimbursement of COBRA Premiums as described below, subject to your executing and not revoking a general release of claims against Primus, in the form attached as Appendix A (the “Release”) and subject to your compliance with the terms of this Agreement. Severance pay and reimbursement of COBRA Premiums will also be paid if, before the End of the Term, (i) the Company terminates your employment without Cause, (ii) your employment is terminated by you for Good Reason, (iii) your employment terminates upon your death, or (iv) your employment terminates upon your Disability, subject to your executing and not revoking the Release and subject to your compliance with the terms of this Agreement. The severance pay and reimbursement of COBRA premiums will be as follows:

(i) The severance pay will be equal to one month of your Base Salary for each full year of continuous service with the Company (the “Severance Period”). The severance pay will be paid in a lump sum payment within 60 days following your termination date; provided that if such 60-day period begins in one calendar year and extends into a second calendar year, the payment will be made in the second calendar year.

(ii) If you elect COBRA Coverage under the Company’s health plan, the Company shall reimburse you for the COBRA Premium paid by you with respect to each month during the Severance Period, provided that such reimbursement shall be reduced by the amount of any monthly co-premium payment you would have been required to make had you remained actively employed by the Company. The COBRA Premium reimbursement shall be made on the first payroll day of each month following the termination date.

 

2


 

In the event of your termination of employment, all then-outstanding equity awards shall be governed by the relevant equity compensation plan under which the awards were granted and the applicable grant agreements. However, your outstanding options and restricted share units that vest based solely on continued service will become fully vested if the Company terminates your employment without Cause, (ii) your employment is terminated by you for Good Reason, (iii) your employment terminates upon your death, or (iv) your employment terminates upon your Disability. Any outstanding performance shares shall be governed by the terms of the applicable grant agreement.

This Agreement supersedes and replaces any and all other severance plans or policies of Primus, including, without limitation, the Primus Guaranty, Ltd. Senior Management Severance Pay Plan (“Severance Pay Plan”). You hereby acknowledge that the Severance Pay Plan is terminated as of the date of this Agreement, you hereby waive advance notice of such Severance Pay Plan termination and you release Primus from all liabilities with respect to the Severance Pay Plan.

Defined Terms

For purposes of this Agreement, the following terms will have the respective meanings set forth below:

Board” means the Board of Directors of Primus Guaranty, Ltd.

Cause” means a finding by a majority of the Board (excluding you, if you are a director) at a meeting in which you will have an opportunity to participate that you have: (i) been charged with a felony or a crime involving moral turpitude, (ii) committed an act of fraud or embezzlement against Primus, (iii) materially failed, refused or neglected to perform your duties (other than by reason of a physical or mental impairment) or to implement the directives of the Board or your supervisor, or (iv) willfully engaged in conduct that is materially injurious to Primus, monetarily or otherwise, including a material breach of the covenants described in this Agreement; provided that, in the case of an event described in item (iii) or (iv), Primus has given you written notice of such event, you have had an opportunity to cure such event during a period of at least ten business days after receipt of such notice, and you have failed to cure such event to the reasonable satisfaction of the Board.

Change in Control” shall have the meaning prescribed in the Primus Guaranty, Ltd. Incentive Compensation Plan, as amended and restated on January 1, 2011.

COBRA Premium” means, if you are entitled to, and elect to receive, continued health coverage (“COBRA Coverage”) under the Company’s health plans pursuant to Section 4980B of the Code, the monthly premium paid by you for such coverage.

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

 

3


 

Disability” means your continuous inability by reason of a physical or mental illness, injury or impairment to perform the duties assigned to you for a period of six consecutive calendar months.

Good Reason” shall mean, on or after January 1, 2011, a (i) material reduction of your aggregate Base Salary and benefits, (ii) a relocation of your principal place of employment to a location that is more than 40 miles from your principal place of employment on January 1, 2011 or that is outside the states of New York and Connecticut, (iii) a material and adverse diminution of your job duties or responsibilities or (iv) any failure of the Company to obtain the assumption of this Agreement by any successor or assign of all or substantially all of the business or assets of the Company as described under “Assignment” below. Notwithstanding the foregoing, Good Reason shall not include a change or adjustment in the nature of your duties and responsibilities that continues to allow you to have the same authority with respect to Primus’ functional area, employees or products and services that you had immediately prior to such change or adjustment (and, for the avoidance of doubt, a change in, or elimination of, duties or responsibilities caused by reason of Primus Guaranty, Ltd. ceasing to be publicly traded shall not constitute Good Reason), and changes resulting from a change in Primus’ strategy, business, assets or status shall not constitute Good Reason. An event described in provisions (i) through (iv) shall not constitute a termination for Good Reason unless you provide written notice of termination for Good Reason to the Company within 30 days after the event constituting grounds for Good Reason occurs and the Company does not correct the act or failure to act constituting grounds for Good Reason within 30 days following its receipt of your written notice of termination for Good Reason. In order for a termination to be on account of Good Reason, you must terminate employment within 30 days after the end of the cure period with respect to the Good Reason event.

Change in Control

In the event of a Change in Control, if you become entitled to receive payments under this Agreement, as well as other amounts payable by Primus that are described in Section 280G(b)(2)(A)(i) of the Code, and such benefits or payments would be subject to the excise tax imposed by section 4999 of the Code (the “Excise Tax”), the aggregate present value of the payments under this Agreement shall be reduced (but not below zero) to the Reduced Amount (as defined below), if reducing the payments under this Agreement will provide you with a greater net after-tax amount than would be the case if no reduction was made. The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of payments without causing any payment under this Agreement to be subject to the Excise Tax, determined in accordance with section 280G(d)(4) of the Code. Reductions to be made under this paragraph shall first be applied to amounts payable in cash, then to non-cash benefits other than acceleration of vesting, and then to acceleration of vesting. Determinations of the Excise Tax and the amount of the payment or reduction to be made pursuant to this section of this Agreement shall be made by the Board, based on calculations made by an accounting or consulting firm selected by the Board. All of the fees and expenses of the accounting or consulting firm in performing the determinations referred to in this section shall be borne solely by the Company.

 

4


 

Other Terms

Proprietary Information; Non-Solicitation. As an employee, you will be subject to the policies regarding Proprietary Information and Innovations as described in Appendix B to this Agreement, among other policies applicable to the Company’s employees. You acknowledge that the relationships of Primus with its employees are valuable business assets. You agree that, during your employment and during the one-year period following termination of employment for any reason, you will not directly or indirectly (for yourself or for any third party) solicit any then current employee of Primus to leave the employ of Primus. Your agreement to comply with these policies and covenants shall survive the termination of this Agreement.

Enforcement of Covenants. You acknowledge that the covenants contained in this Agreement, in view of the nature of the businesses in which the Primus is engaged, are reasonable and necessary in order to protect the legitimate interests of Primus and that any violation thereof would result in irreparable injuries to Primus which would not be readily ascertainable or compensable in terms of money, and therefore you further acknowledge that, in the event of violation of any of these restrictions, Primus shall be entitled to obtain from any court of competent jurisdiction temporary, preliminary and permanent injunctive relief as well as damages and an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which Primus may be entitled. You further agree that if it is determined by a court you have breached the terms of the preceding “Proprietary Information; Non-Solicitation” paragraph, Primus shall be entitled to seek to recover from you all costs and reasonable attorneys’ fees incurred as a result of its attempts to redress such breach or to enforce its rights and protect its legitimate interests.

Taxation. All payments and other benefits under this Agreement shall be subject to applicable tax withholding. This Agreement is intended to meet the requirements of Section 409A of the Code to the extent applicable, or an exception, including the requirement, if applicable, that payments upon separation from service be delayed for six months if you are considered a “key employee” of a public company for purposes of Section 409A. Payments to be made upon a termination of employment under the Agreement may only be made upon a “separation for service” under Section 409A. In no event may you, directly or indirectly, designate the calendar year of a payment.

In the event that any payment made pursuant to this Agreement is taxable to you prior to the date on which you receive such payment, by reason of Section 409A of the Code or Section 457A of the Code, then, to the extent permitted by Sections 409A and 457A of the Code, the Company may, but shall not be required to, determine that you may receive a distribution at the time the payment is includible in your taxable income. Such distribution shall be equal to your U.S. federal, state, and local tax obligations resulting from the inclusion in income of the payment under Section 409A or 457A of the Code, as applicable, consistent with Sections 409A and 457A. Each subsequent payment payable to you shall be reduced by the distribution made to you with respect to the early taxation of such payment.

 

5


 

Amendment. This Agreement may be amended or modified only by a written instrument signed by you and by an authorized representative of the Company, subject to prior approval by the Board or the Compensation Committee of the Board.

Entire Agreement. This Agreement constitutes the entire agreement between you and Primus with respect to the subject matter hereof, and supersedes all prior communications, agreements and understandings, written or oral, with respect to the terms and conditions of your employment with the Company on and after January 1, 2011 (including, without limitation, the Severance Pay Plan). The language of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the parties.

No Mitigation. You shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

Assignment. The Company may assign this Agreement to any successor to its business or assets. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns and upon you and your legal representatives. The Company may require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company to expressly assume this Agreement and agree to perform the obligations hereunder in the same manner and to the same extent the Company would be required to perform if no such succession had taken place.

Nonalienation of Benefits. None of the payments, benefits or rights under this Agreement shall be subject to any claim of any creditor of yours, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment, trustee’s process, or any other legal or equitable process available to any creditor of yours. You shall not have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which you may expect to receive, contingently or otherwise, under this Agreement. This Agreement shall not be funded. You shall have no right to, or interest in, any assets of Primus which may be applied to the payment of benefits.

No Contract of Employment. Neither the establishment of this Agreement, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving you the right to be retained in the service of the Company.

Death. In the event of your death following your termination of employment and after having become entitled to benefits under the Agreement, any amounts owing but not yet paid pursuant to this Agreement shall be paid to the personal representative of your estate.

 

6


 

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

Governing Law. This Agreement shall be construed and enforced under and be governed in all respects by the laws of New York, without regard to the conflict of laws principles thereof.

Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered the same Agreement.

If the foregoing is acceptable to you, kindly sign and return to me a copy of this Agreement.

Very truly yours,

/s/ VINCENT B. TRITTO

Vincent B. Tritto
General Counsel
Primus Asset Management, Inc.

Agreed to and accepted by:

 

 

 

/s/ RICHARD CLAIDEN

 

Richard Claiden

 

 

 

7


 

Appendix A

RELEASE

I,                                           , the undersigned, agree that in return for the separation pay and other benefits described in the letter agreement (“Agreement”), dated                      , by and between Primus Asset Management, Inc. (the “Company”) and myself, and for other good and valuable consideration, to the fullest extent permitted by law, I hereby IRREVOCABLY AND UNCONDITIONALLY RELEASE, REMISE AND FOREVER DISCHARGE the Company and Releasees (as defined below) from any and all agreements, promises, liabilities, claims, demands, rights and entitlements of any kind whatsoever, in law or equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, fixed or contingent, apparent or concealed (“Claims”), which I, my heirs, executors, administrators, successors, assigns or legal representatives ever had, now have or hereafter can, shall or may have for, upon, or by reason of any matter, cause or thing whatsoever existing, arising, occurring or relating to my employment and/or termination thereof with the Company and Releasees, or my status as an equity owner of the Company and Releasees, at any time on or prior to the date I execute this Release, including, without limitation, any and all Claims arising out of or relating to compensation, benefits, compensation that may be payable at any time and in any circumstance under the Agreement, any and all contract claims, tort claims, fraud claims, claims for payments, bonuses, commissions, sales credits, etc., defamation, disparagement, or other personal injury claims, claims for accrued vacation pay, claims under any federal, state or municipal wage payment, discrimination or fair employment practices law, statute or regulation, and claims for costs, expenses and attorneys’ fees with respect thereto. This release and waiver specifically includes, without limitation, any and all rights and claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e); the Civil Rights Acts of 1866, 1871 and 1991; the Americans with Disabilities Act, 42 U.S.C. § 1201, et seq.; the Employee Retirement Income Security Act (“ERISA”) (including, but not limited to, claims for breach of fiduciary duty under ERISA); the Rehabilitation Act of 1973; the Worker Adjustment and Retraining Notification Act, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993; the Equal Pay Act of 1963; the Corporate and Criminal Fraud Accountability Act of 2002, 18. U.S.C. § 1514A, also known as the Sarbanes-Oxley Act; the Age Discrimination in Employment Act, 29 U.S.C. §621, et seq. (“ADEA”); the Older Workers’ Benefits Protection Act; the Rehabilitation Act of 1973; the Genetic Information Nondiscrimination Act of 2008; and any similar New York state, local or municipal statute, including but not limited to the New York State Human Rights Law; the New York Labor Law; the New York Civil Rights Law; the New York City Human Rights Law; and the New York Executive Law; [add provisions with respect to other applicable state laws relating to employment;] and all amendments to the foregoing, and any other federal, state or local statutes, ordinances, regulations, common laws, or constitutional provisions regarding employment, compensation, employee benefits, termination of employment or discrimination in employment, and any and all claims for benefits under any compensation, bonus or benefit plan, program or policy of the Company and the Releasees, and all claims for monetary or personal relief.

 

8


 

Notwithstanding the generality of the foregoing, nothing herein constitutes a release or waiver by me of: (i) any claim or right I may have under COBRA; (ii) any claim or right I may have for unemployment insurance benefits; (iii) any claim to vested benefits under the written terms of the Company’s 401(k) plan; (iv) any right to indemnification I may have as a director, officer or employee pursuant to applicable law and/or the constituent documents of the Company and the Releasees; (v) any claim or right not released above that may arise after the execution of this Release; or (vi) any claim or right I may have under this Release.

This Release may not be cited as, and does not constitute any admission by the Company and the Releasees of, any violation of any such law or legal obligation with respect to any aspect of my employment or termination therefrom.

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

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

For purposes of this Release, the term “the Company and Releasees” includes the Company (and its predecessors) and Primus Guaranty Ltd., and their past and/or present direct or indirect subsidiaries, divisions, insurers, direct or indirect corporate parents, affiliates and related business entities, assets, employee benefit plans or funds, and any of its and their past, present and future predecessors, successors and assigns, and its and their current, former and future partners, members, managers, officers, directors, fiduciaries, trustees, administrators, employees, stockholders, representatives, agents, and attorneys, in their official and/or individual capacities, and all other related individuals and entities, jointly and individually, and the provisions of this Release shall inure to the benefit of and shall be binding and enforceable by all such entities and individuals.

If any provision of this Release is held unenforceable by any court of law, and I proceed with any Claim against the Company and the Releasees then I agree that the Company and/or the Releasees may seek to recoup from me the separation pay and/or benefits, being provided under the Agreement, and the Company and/or the Releasees will be relieved from any further obligation to provide me with any further separation pay and/or benefits described in the Agreement.

I hereby acknowledge that:

 

9


 

 

a.

 

The Company advises me to consult with an attorney before signing this Release;

 

b.

 

I have obtained independent legal advice from an attorney of my own choice with respect to this Release, or I have knowingly and voluntarily chosen not to do so;

 

 

c.

 

I freely, voluntarily and knowingly entered into this Release after due consideration;

 

d.

 

I have had a minimum of twenty-one (21) days to review and consider this Release;

 

 

e.

 

If I knowingly and voluntarily choose to do so, I may accept the terms of this Release before the twenty-one (21) day consideration period provided for above has expired;

 

f.

 

I have a right to revoke this Release by notifying the [General Counsel of the Company] in writing within seven (7) days of my execution of this Release;

 

 

g.

 

In exchange for my waivers and releases and commitments set forth herein, including my waiver and release of all claims arising under ADEA, the payments, benefits and other considerations that I will receive pursuant to the Agreement exceed any payment, benefit or other thing of value to which I would otherwise be entitled, and are just and sufficient consideration for the waivers and releases set forth herein.

I agree that if I fail to execute and return this Release to the Company within the twenty-one (21) days provided for my review and consideration, or revoke my execution of the Release during the seven (7) day revocation period, I will not be entitled to the separation pay and other benefits provided for in the Agreement.

By executing this Release, I acknowledge that I have been afforded sufficient time to understand the terms and effects of this Release, that my agreements hereunder are made voluntarily, knowingly and without duress, and that neither the Company nor its agents or representatives have made any representations inconsistent with the provisions of this Release.

[Signatures to be added.]

 

10


 

Appendix B

Primus Asset Management, Inc. Proprietary Information and Innovations

Proprietary Information. You understand that your work as an employee of Primus Asset Management, Inc. (the “Company”) shall involve access to and creation of confidential (including trade secrets) and proprietary information (collectively, “Proprietary Information”) and recognize that it is in the legitimate business interest of the Company to restrict your disclosure or use of Proprietary Information. You therefore agree that you shall maintain the confidentiality of, and shall never use or disclose, or authorize any other person or entity to use or disclose, any Proprietary Information, other than in connection with your employment as necessary to further the business objectives of the Company or as may be required by law or legal process. The term Proprietary Information includes, by way of example and without limitation, matters of a technical nature, such as software design and specifications, financial models, scientific, trade and engineering secrets, “know-how”, formulas, secret processes, drawings, works of authorship, machines, inventions, computer programs (including documentation of such programs), services, materials, patent applications, new product plans, other plans, technical information, technical improvements, manufacturing techniques, specifications, manufacturing and test data, progress reports and research projects, and matters of a business nature, such as business plans, prospects, financial information, proprietary information about costs, profits, markets, sales, lists of customers and suppliers of the Company and its affiliates, the management, operation and planning of the Company and its affiliates, procurement and promotional information, credit and financial data concerning customers or suppliers of the Company and its affiliates, and other information of a similar nature to the extent not available to the public, and plans for future development, whether received by you prior to, on or after the date hereof from or on behalf of the Company, or its affiliates but does not include any information that has been publicly disclosed or was known to you prior to accepting your employment by the Company. You acknowledge that your obligations under this paragraph shall survive the termination of your employment with the Company, and that immediately after such termination (or during your employment if so requested by the Company), you shall return all Proprietary Information to the Company. You agree that you shall not divulge to the Company, its affiliates, or any of their employees, nor use during your employment with the Company, any proprietary or confidential information acquired by you during any previous employment or consulting arrangement.

You confirm that you are aware that the United States securities laws generally prohibit any person who has material non-public information about a company from purchasing or selling securities of such company on the basis of such information or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person may purchase or sell such securities.

 

11


 

Innovations. You agree to promptly and fully disclose to the Company all ideas, inventions, discoveries, creations, designs, materials, works of authorship, trademarks, and other technology and rights (and any related improvements or modifications thereof), whether patentable or not, copyrightable or not, or otherwise protectable or not under any form of legal protection afforded to intellectual property (collectively, “Innovations”), relating to any activities of the Company and its affiliates, conceived or developed by you alone or with others during any period of employment by the Company or its affiliates (whether or not conceived during regular business hours), or during the six month period immediately following termination of your employment. Such Innovations shall be the sole property of the Company. To the extent possible, such Innovations shall each be considered a Work Made For Hire by you for the Company within the meaning of the U.S. Copyright Act. To the extent such Innovations may not be considered such a Work Made For Hire, you hereby assign to the Company, without additional consideration, all right, title, or interest you may now have in such Innovations, and going forward, you agree to automatically assign to the Company at the time of creation of the Innovations, without additional consideration, all right, title, or interest you may have in such Innovations.

Any assignment of copyright hereunder (and any ownership of a copyright as a Work Made For Hire) includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights” (collectively, “Moral Rights”). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, you hereby waive such Moral Rights and consent to any action of the Company that would violate such Moral Rights in the absence of such consent.

You shall (whether during or after your employment with the Company) execute such written instruments and do other such acts as may be necessary or appropriate in the reasonable opinion of the Company to obtain a patent, register a copyright, or otherwise protect or enforce the Company’s rights in such Innovations. You agree to assist the Company in obtaining or maintaining for itself at its own expense United States and foreign patents, copyrights, trade secret protection or other protection of any and all Innovations. You hereby irrevocably designate and appoint the Company and its duly authorized officers and agents, as your agents and attorney-in-fact to act for and on your behalf and instead of you, to execute and file any documents, applications or related findings and to do all other lawfully permitted acts to further the purposes set forth above in this Appendix, including, without limitation, the perfection of assignment and the prosecution and issuance of patents, patent applications, copyright applications and registrations, trademark applications and registrations or other rights in connection with such Innovations and improvements thereto with the same legal force and effect as if executed by you.

Except as disclosed in a writing attached hereto, you represent that you do not claim ownership to any Innovations that you may have conceived or developed alone or with others prior to your employment by the Company or its affiliates. If any Innovations assigned hereunder are based on, or incorporated, or are improvements or derivatives of, or cannot be reasonably made, used, reproduced and distributed without using or violating technology or rights owned or licensed by you and not assigned hereunder, you hereby grant the Company a perpetual, worldwide, royalty-free, non-exclusive and sub-licensable right and license to exploit and exercise all such technology and rights in support of the Company’s exercise or exploitation of any assigned Inventions (including any modifications, improvements and derivatives thereof).

 

12