Promissory Note - ACE Ltd. and Dominic J. Frederico
PROMISSORY NOTE
$250,000.00 March 23, 1999
FOR VALUE RECEIVED, the undersigned, Dominic J. Frederico, an individual
(the "Employee"), promises to pay to the order of ACE Limited, a Cayman Islands
company (the "Company"), on the date on which the Employee's employment with the
Company terminates (the "Maturity Date"), the principal sum of $250,000.00 and
any accrued interest on this Note, subject to the provisions of this Note
relating to forgiveness of such obligations.
This Note evidences obligations in connection with a loan made by the
Company to the Employee as part of the inducement to the Employee to assume
additional responsibilities with the Company.
The unpaid principal amount of this Note from time to time outstanding
shall bear interest at a rate per annum (based upon a 365/366 day year) equal to
the applicable Federal rate as of the March 23, 1999, as determined for purposes
of section 1274(d) of the Internal Revenue Code of 1986, as amended, compounded
annually. After the Maturity Date, any unpaid and unforgiven principal amount
and accrued unforgiven interest on the unpaid principal amount of this Note
shall be payable on demand.
As of each of the first five one-year anniversaries of March 23, 1999 if
the Employee (i) is employed by the Company on such anniversary, (ii) has died
or resigned as a result of disability, or (iii) has been terminated by the
Company without Cause, an amount equal to $50,000.00 of the principal amount due
under this Note, together with the amount of interest that has accrued with
respect to the entire unpaid principal and interest amount since the preceding
March 23, shall be forgiven. If the Employee's employment with the Company is
terminated (i) by the Company for Cause or (ii) by reason of the Employee's
voluntary resignation (for reason other than death or disability), then any
remaining principal and interest shall become due and payable on the date of
such termination of employment. For purposes of this Note, the term "Cause"
shall have the same meaning set forth in the Employment Agreement dated as of
January 9, 1995 between the Company and the Employee. Disability shall mean
being adjudged by the Compensation Committee of the Company to be disabled
within the meaning of the Company's long-term disability plan.
Subject to the other terms and conditions hereof, the Employee may
voluntarily prepay all or any portion of the unpaid and unforgiven principal
amount of this Note from time to time outstanding and any accrued and unforgiven
interest thereon, without premium or penalty.
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All payments of principal of and interest on this Note shall be payable in
lawful currency of the United States of America at Hamilton, Bermuda or such
other place as the Company shall designate to the Employee in writing, in cash
or by check. If payment hereunder falls due on a day which is either a Saturday,
Sunday or any other day on which banks in Hamilton, Bermuda are not generally
open for business to the public (i.e., not a "Business Day"), then such due date
shall be extended to the immediately succeeding Business Day, and additional
interest shall accrue and be payable for the period of any such extension.
The Employee agrees that if any of the following events of default (each an
"Event of Default") shall occur and be continuing:
(i) default in the performance or observance of any other agreements of the
Employee contained herein, or
(ii) the institution of any bankruptcy, insolvency, receivership or similar
proceeding relating to the Employee or his assets, and if such case or
proceeding is not commenced by the Employee, it is consented to or
acquiesced in by the Employee or remains for 60 days undismissed;
then the Company may declare this Note and all unpaid and unforgiven principal
of and interest on this Note and all accrued costs, expenses and other amounts
under this Note to be due and payable, whereupon all unpaid and unforgiven
principal of and interest on this Note and all such costs, expenses and other
amounts shall immediately become due and payable following such declaration.
The Employee hereby represents and warrants to the Company as of the date
hereof (i) that this Note is the legally valid and binding obligation of the
Employee, enforceable against the Employee in accordance with its terms, and
(ii) that the execution, delivery and performance by the Employee of this Note
does not conflict with or contravene (a) any law, rule or regulation binding
upon the Employee or affecting any of the Employee's assets, (b) any provision
of any contract, instrument or agreement binding upon the Employee or affecting
any of the Employee's assets, or (c) any writ, order, judgment, decree or
decision of any court or governmental instrumentality binding upon the Employee
or affecting any of the Employee's assets.
All notices, certificates and other communications hereunder shall be in
writing and may be either delivered personally, by internationally recognized
express courier for overnight delivery, or by facsimile (with request for
assurance of receipt in a manner appropriate with respect to communications of
that type, provided that a confirmation
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copy is concurrently sent by a internationally recognized express courier for
overnight delivery) or mailed, postage prepaid, by certified or registered mail,
return receipt requested, addressed as follows:
If to the Company: ACE Limited
The ACE Building
30 Woodbourne Avenue
Hamilton HM 08, Bermuda
Attention: General Counsel
Facsimile: (441) 296-0087
If to the Employee: Dominic J. Frederico
ACE Limited
The ACE Building
30 Woodbourne Avenue
Hamilton HM 08, Bermuda
Facsimile: (441) 296-0087
All Notices hereunder shall be in writing (including, without limitation,
facsimile transmission) and shall be sent to the Employee or the Company, as
appropriate, at such party's address shown above, or at such other address as
such party may, by written notice received by the other party hereto, have
designated as its or his address for such purpose. Notices sent by facsimile
transmission shall be deemed to have been given when sent; notices sent by mail
shall be deemed to have been given five days after the date mailed by registered
or certified mail, postage prepaid; and notices sent by hand delivery shall be
deemed to have been given when received.
This Note has been made and delivered at Hamilton, Bermuda and shall be
construed in accordance with and governed by the internal laws of the State of
New York. Wherever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the least extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
IN WITNESS WHEREOF, the Employee has caused this Note to be executed as of
the day and year first above written.
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Dominic J. Frederico
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