INTEGRATION BONUS AND ENHANCED SEVERANCE AGREEMENT
Exhibit
10.1
THIS
INTEGRATION BONUS AND ENHANCED SEVERANCE AGREEMENT (the “Agreement”) is entered
into by and among AmCOMP Incorporated, a Delaware corporation (the
“Company”),Employers Holdings, Inc., a Nevada corporation (“Parent”) and Xxxxx
Xxxxx-Xxxxxxxxx (the “Executive”), effective as of the date of execution of the
Merger Agreement (as defined below) (the “Effective Date”). Terms
capitalized but not defined herein shall have the meanings given them in the
Employment Agreement (as defined below).
WHEREAS,
the Executive is employed by the Company in the position of Executive Vice
President and Chief Operating Officer;
WHEREAS,
the Company and the Executive entered into that certain Amended and Restated
Employment Agreement, dated as of August 22, 2005 (the “Employment
Agreement”);
WHEREAS,
the Company and Parent have entered into that certain agreement and plan of
merger (the “Merger Agreement”) pursuant to which wholly owned subsidiary of
Parent will merge with and into the Company (the “Merger”) upon closing of the
Merger;
WHEREAS,
the Company and Parent recognize the importance of the Executive’s contribution
and assistance in ensuring a smooth transition and integration and of the
Executive’s continuation of employment through the closing of the Merger, and
for a period thereafter; and
WHEREAS,
the Executive desires to continue in employment and assist and cooperate in
facilitating the closing of the Merger and to perform such transition and
integration planning functions and duties as may be requested by the Company
and
Parent, on the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual agreements set forth herein and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Company, Parent and the Executive hereby agree as
follows:
1.
Term. The
Agreement shall commence on the Effective Date and shall terminate when all
payments to the Executive pursuant to Sections 3 and 4 have been made (the
“Term”). The Executive’s employment with the Company shall terminate
upon the date that is 60 calendar days following the closing of the Merger
(the
“Separation Date”)..
2.
Duties. During
the Term, the Executive will be required to cooperate and otherwise use her
best
efforts to ensure a smooth transition and integration for a successful Merger
between the Company and Parent and to perform such other transition, integration
and planning functions and duties as may be assigned by the Board of Directors
of the Company prior to the close of the Merger (the “Company Board”), and by
the Chief Executive Officer or the President and Chief Operating Officer of
Parent from and following the close of the Merger.
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3.
Integration
Bonus. Subject to the consummation of the Merger, and provided
that the Executive satisfactorily performs her duties, as described in Section
2
above, as determined in good faith by the Company Board prior to the close
of
the Merger, and by the Chief Executive Officer or the President and Chief
Operating Officer of Parent from and following the close of the Merger, and
either the Executive remains employed by the Company through the Separation
Date
or the Executive’s employment is terminated by Parent or the Company other than
for Cause on or prior to the Separation Date, the Executive will be entitled
to
receive a bonus (the “Integration Bonus”) in an amount equal to $200,000,
payable as soon as practicable, but in no event later than, 15 calendar days
following the Separation Date.
4.
Separation and
Severance Payment. The parties acknowledge and agree that the
Executive’s employment with the Company shall terminate as of the Separation
Date, and the Executive shall continue to be eligible to receive the severance
payments and benefits subject and pursuant to the terms and conditions set
forth
in Section 7 of the Employment Agreement, except as modified below:
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(a)
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Provided
that either the Executive remains employed by the Company through
the
Separation Date, or the Executive’s employment is terminated by the
Company or Parent pursuant to clause (iv) of Section 7(a) of the
Employment Agreement at any time following the closing of the Merger,
then, in lieu of (and not in addition to) the payments and benefits
set
forth in Section 7(c) of the Employment Agreement, Parent will pay,
or
will cause the Company to pay, to the Executive, 18 equal months
of
severance pay commencing on the Separation Date; each monthly payment
shall be an amount equal to the sum of (i) one-sixth the Executive’s
annual Salary in effect immediately prior to such termination (i.e.,
an
amount representing two months’ Salary) and (ii) one-twelfth of the amount
of incentive compensation and bonuses approved and accrued for the
Executive in respect of the most recent fiscal year preceding such
termination (the “Enhanced Merger Severance”) and Parent will provide, or
will cause the Company to provide the Executive with the benefits
referenced in Section 5(b) of the Employment Agreement for 18 months
following the Separation Date.
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(b)
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In
consideration for the Enhanced Merger Severance, the Executive
acknowledges and agrees that she is subject to, and will continue
to be
subject to, the terms and conditions of the restrictive covenants
set
forth in Section 9 of the Employment Agreement for the 18-month period
set
forth therein (the “Restricted Period”). The Executive further
agrees to make herself available to the Company and Parent and to
assist
the Company and Parent during the Restricted Period in performing
such
duties as the Company or Parent may request from time to time.
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(c)
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Notwithstanding
anything to the contrary contained in the Agreement, (i) if the Executive
is determined to be a “specified employee” (within the meaning of Section
409(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended
(the
“Code”)), then any portion of the Enhanced Merger Severance that is
otherwise due to be paid or provided to the Executive during the
first six
months after the Separation Date shall, to the extent required to
avoid
negative tax consequences under Section 409A of the Code, be suspended
and
instead paid on the date that is six months and one day following
the
Separation Date; and (ii) the Executive shall not be considered to
have
terminated employment with the Company for purposes of this Agreement
or
the Employment Agreement unless the Executive would be considered
to have
incurred a “separation from service” from the Company within the meaning
of Section 409A of the Code.
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5.
Survival of the
Employment Agreement. Notwithstanding anything to the contrary
contained in the Agreement, except as modified pursuant to Section 4 above,
the
Employment Agreement remains in effect and the Executive remains subject to
the
terms and conditions set forth therein.
6.
Entire
Agreement. The Agreement, together with the Employment
Agreement, as hereby modified, sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and, as of the
Effective Date, supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto and,
as
of the Effective Date, any prior agreements of the parties hereto in respect
of
the subject matter contained herein are hereby terminated and
cancelled.
7.
Withholding. All
amounts payable to the Executive under the Agreement shall be subject to
applicable withholding of income, wage and any other applicable
taxes.
8.
Amendment or
Modification; Waiver. No provisions of the Agreement may be
modified, waived or discharged unless such waiver, modification or discharge
is
agreed to in writing signed by the Executive and such officer of the Company,
prior to the close of the Merger, and Parent from and following the close of
the
Merger, as may be specifically designated by the Company Board or the Board
of
Directors of Parent, respectively. No waiver by any party hereto at
any time of any breach by another party hereto of, or compliance with, any
condition or provision of the Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions
at
the same or at any prior or subsequent time.
9.
Law
Governing. The Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, except that body of law
relating to choice of laws.
10.
No Right To Continued
Employment. Nothing in the Agreement shall confer upon the
Executive any right to continue in the employ of the Company or shall interfere
with or restrict in any way the rights of the Company or Parent, which are
hereby expressly reserved, to discharge the Executive at any time for any reason
whatsoever, with or without cause.
11.
Severability;
Enforcement. If any provision of the Agreement, or the
application thereof to any person, place, or circumstance, shall be held by
a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of the Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
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12.
Agreement Void if
No
Merger. Notwithstanding anything to the contrary contained in
the Agreement, if the Merger is not consummated, then the Agreement shall be
of
no further force or effect and the Executive shall have no rights to receive
any
amounts hereunder, including, without limitation, the benefits set forth in
Sections 3 and 4. Notwithstanding anything to the contrary contained
in the Agreement, neither the Company nor Parent shall be under any obligation
to consummate the Merger or any other transaction at any time.
13.
Counterparts. The
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
IN
WITNESS WHEREOF, the parties have executed the Agreement as of the Effective
Date.
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AmCOMP
Incorporated
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By:
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/s/
Xxxx X. Xxxx
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Name:
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Xxxx
X. Xxxx
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Title:
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Chief
Executive Officer
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Date:
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January
31, 2008
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Employers
Holdings, Inc.
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By:
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/s/
Xxx X. Xxxxxx
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Name:
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Xxx
X. Xxxxxx
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Title:
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Executive
Vice President
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Date:
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January
30, 2008
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Executive
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/s/
Xxxxx Xxxxx-Xxxxxxxxx
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Xxxxx
Xxxxx-Xxxxxxxxx
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Date:
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January
30, 2008
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