Exhibit 10.12B
STAY BONUS AGREEMENT
STAY BONUS AGREEMENT made and entered into as of the
7th day of August, 1995 by and between Piedmont Management
Company Inc. ("Piedmont") and
_______________________________________________ (the "Employee").
W I T N E S S E T H:
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WHEREAS, Piedmont has entered into a definitive merger
agreement (the "Merger Agreement") effective August 7, 1995 with
Chartwell Re Corporation ("Chartwell") whereby Chartwell will be
the surviving corporation (the "Surviving Corporation"); and
WHEREAS, Employee is currently serving as
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and is an integral member of the management of Piedmont and
Piedmont and Employee are parties to an agreement dated as of
October 26, 1994 (the "Change in Control Agreement"); and
WHEREAS, Piedmont wishes to encourage Employee to
remain in Piedmont's employ through the consummation of the
transactions contemplated by the Merger Agreement ("the Merger")
and has determined that this Agreement will serve that purpose;
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein and for other good and valuable
consideration, the parties hereto agree as follows:
1. Termination of Change in Control Agreement;
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Entire Agreement
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If Employee continues to be employed by Piedmont until
the date on which the effective time of the Merger occurs
("the Effective Date"), this Agreement shall become effective,
supersede and replace the change in Control Agreement and any
other Piedmont severance policy otherwise applicable to Employee
(as in effect prior to the Merger). This Agreement does not
become effective or alter the severance and other benefits
Employee may be entitled to receive under the Change in Control
Agreement in the event of his termination prior to the Effective
Date.
2. Employee's Intention
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Employee states that, based on this agreement, he has
no present intention of resigning from Piedmont's employ.
3. Stay Bonus
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Provided Employee remains continuously employed by
Piedmont until the Effective Date, on the Effective Date but
immediately prior to the effective time of the Merger, he shall
be entitled to the following:
(a) ______ months of base salary (defined as monthly
base salary at the Effective Time), less applicable withholdings,
payable in a lump sum payment on the Effective Date; and
(b) continued medical and dental coverage under the
plans of Lexington Management Corporation for up to months
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(which coverage shall be netted against Piedmont's or the
Surviving Company's as applicable, obligations under the
Consolidated Omnibus Budget Reconciliation Act of 1985).
Employee will not be entitled to such coverage for any period
during which Employee is eligible for medical coverage from a
subsequent employer (other than the Surviving Corporation).
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4. Parachute Payment
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(a) Notwithstanding any other provision of this
Agreement, if it is determined that the Net After-Tax Amount (as
defined in subparagraph (b) below) to be realized by Employee
would be higher if a portion of the payments under this Agreement
were not paid, then and to such extent such payments shall not be
paid. The determination of whether a portion of any such payment
should not be paid shall be made by a nationally recognized
accounting firm selected by Piedmont and reasonably acceptable to
Employee and such determination shall be binding upon Employee
and Piedmont.
(b) For purposes of this Agreement, "Net After-Tax
Amount" means the net amount of compensation (assuming for this
purpose only that all vested options and other forms of
compensation subject to vesting upon such change in control are
exercised upon such change in control) to be received (or deemed
under applicable law to have been received) by Employee in
connection with the Merger under this Agreement, under any option
agreement and under any other plan, arrangement or contract of
Piedmont to which Employee is a party, after giving effect to all
taxes, including but not limited to income and excise taxes,
applicable to such payments.
5. Binding Effect
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This Agreement shall be binding upon and inure to the
benefit of the parties hereto, the Surviving Corporation and
their respective legal representatives, heirs, distributees,
successors and assigns; provided, that the rights and
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obligations of Employee hereunder shall not be assignable by him.
6. Applicable Law
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This Agreement, and all of the rights and
obligations of the parties in connection with this Agreement,
shall be governed by and construed in accordance with the
substantive laws of the State of New York without giving effect
to principles relating to conflicts of law.
7. Employment-At-Will
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This Agreement does not alter the fact that the
relationship between Piedmont and Employee is an employment-at-
will, and that Piedmont may terminate Employee's employment and
Employee may terminate the employment relationship at any time
for any reason at all.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date and year stated above.
PIEDMONT MANAGEMENT COMPANY, INC.
By:
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Title:
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Employee
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