EMPLOYMENT AGREEMENT
Exhibit
10.1
This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into on April 12, 2007 but
effective as of the 1st day of January, 2007 (the “Effective Date”), between HCC INSURANCE
HOLDINGS, INC. (“HCC” or “Company”) and XXXXX X. XXXXXXXX (“Executive”), sometimes collectively
referred to herein as the “Parties.”
R E C I T A L S:
WHEREAS, Executive is to be employed as Chief Executive Officer (“CEO”) of HCC;
WHEREAS, it is the desire of the Board of Directors of HCC (the “Board”) to (i) directly
engage Executive as an officer of HCC and its subsidiaries; and (ii) directly engage, if elected,
the services of Executive as a director of HCC and its subsidiaries; and
WHEREAS, Executive is desirous of committing himself to serve HCC on the terms herein
provided.
NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements set forth below, the Parties agree as follows:
1. Term. The Company hereby agrees to employ Executive as its Chief Executive Officer
and Executive hereby agrees to accept such employment, on the terms and conditions set forth
herein, for the period commencing on January 1, 2007 and expiring as of 11:59 p.m. on December 31,
2010 unless sooner terminated (the “Term”), subject to the provisions contained in Section 6 below.
2. Duties.
(a) Duties as Employee of the Company. Executive shall, subject to the supervision of
the Board of Directors, have general management and control of HCC in the ordinary course of its
business with all such powers with respect to such management and control as may be reasonably
incident to such responsibilities. During normal business hours, Executive shall devote
substantially all of his time and attention to diligently attending to the business of the Company.
During the Term, Executive shall not directly or indirectly render any services of a business,
commercial, or professional nature to any other person, firm, corporation, or organization, whether
for compensation or otherwise, without the prior consent of the Board of Directors of HCC.
However, Executive shall have the right to engage in such activities as may be appropriate in order
to manage his personal investments so long as such activities do not interfere or conflict with the
performance of his duties to the Company hereunder. The conduct of such activity shall not be
deemed to materially interfere or conflict with Executive’s performance of his duties until
Executive has been notified in writing thereof and given a reasonable period in which to cure same.
(b) Other Duties. At all times during the Term, the Company shall use its best
efforts to cause Executive to be elected a director of HCC. Any such failure to use its best
efforts
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prior to a Change of Control shall be a material breach of this Agreement for purposes of
Section (4)(a)(4)(iv). Executive agrees to serve as a director and member of HCC and of any of its
subsidiaries and in one or more executive offices of any of HCC’s subsidiaries, provided Executive
is indemnified for serving in any and all such capacities in a manner acceptable to the Company and
Executive. Executive agrees that while a full time employee he shall not be entitled to receive
any compensation for serving as a director of HCC, or in any capacities of HCC’s subsidiaries other
than the compensation to be paid to Executive by the Company pursuant to this Agreement. If
Executive is not a full time employee, he shall be compensated as an outside director.
3. Compensation and Related Matters.
(a) Base Salary and Deferred Compensation
(1) Executive shall receive a base salary (the “Base Salary”) paid by the Company at the
annual rate of $950,000, during the period beginning on the Effective Date and for each year of the
Term, payable not less frequently than in substantially equal monthly installments (or such other
more frequent times as executives of HCC normally are paid).
(2) In addition to the Base Salary, Executive shall receive deferred compensation (the
“Deferred Compensation”) of $1,000,000 or such greater amount as is approved by the Compensation
Committee of the board of directors of HCC (the “Compensation Committee”) in its discretion for
each calendar year or portion thereof of the Term. Deferred Compensation under this Agreement
shall be accrued under one or more of the Company’s deferred compensation plans as determined from
time to time by the Compensation Committee. Notwithstanding anything herein to the contrary, such
accruals of Deferred Compensation shall be subject to and shall be governed by the terms of the
plan under which accrued (including, without limitation, plan terms regarding the crediting of
income and the timing of distributions). Deferred Compensation accruals for a year shall be
credited monthly on a ratable basis throughout the year, unless an earlier date is specified by the
Compensation Committee.
(b) Bonus Payments. During the Term, Executive shall be entitled to receive, in
addition to the Base Salary and Deferred Compensation, an annual cash bonus payment in amounts to
be determined under the 2007 Incentive Compensation Plan, or, if no such plan shall be approved
then at the sole discretion of the Compensation Committee and payable in a lump sum within 30 day
of the Compensation Committee’s determination of the amount of said cash bonus.
(c) Expenses. During the Term of this Agreement, Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by him (in accordance with the
policies and procedures established by the Board for the Company’s senior executive officers) in
performing services hereunder, provided that Executive properly accounts therefor in accordance
with Company policy.
(d) Benefits. In addition to Section 3(f)(2) below, Executive shall be entitled to
participate in or receive benefits under any compensation employee benefit plan or other
arrangement made available by the Company now or in the future to its employees, senior executive
officers or
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key management employees, subject to and on a basis consistent with the terms, conditions, and
overall administration of such plan or arrangement. Nothing paid to Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed to be in lieu of
the Base Salary or Deferred Compensation payable to Executive pursuant to subsection (a) of this
Section. The Company shall not make any changes in any employee benefit plans or other
arrangements in effect on the date hereof or subsequently in effect in which Executive currently or
in the future participates (including, without limitation, each pension and retirement plan,
supplemental pension and retirement plan, savings and profit sharing plan, stock or unit ownership
plan, stock or unit purchase plan, stock or unit option plan, life insurance plan, medical
insurance plan, disability plan, dental plan, health and accident plan, or any other similar plan
or arrangement) that would adversely affect Executive’s rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to substantially all executives of the Company and
does not result in a proportionately greater reduction in the rights of or benefits to Executive as
compared with any other executive of the Company.
(e) Vacations. Executive shall be entitled to thirty (30) paid vacation days per year
during the Term, or such additional number as may be determined by the Board from time to time.
There shall be indefinite carryovers of unused vacation from year to year. For purposes of this
Section, weekends shall not count as vacation days, and Executive shall also be entitled to all
paid holidays given by the Company to its senior executive officers.
(f) Insurance.
(1) The Company shall provide to Executive a life insurance policy or policies in an aggregate
face amount of $5,000,000 and shall pay the premiums therefor. Upon termination of this Agreement,
the Company shall assign such policy or policies to the Executive. The life insurance provided for
in this Section 3(a)(2)(f) shall be in addition to the group life insurance program covering the
Executive and substantially all of the employees of the Company.
(2) In addition to the life insurance specified above, the Executive shall be entitled to
receive medical insurance as currently provided under the Company’s group program, as such group
program may be changed from time to time in the future, and Executive shall be entitled to continue
to be covered by such group program, or, if not permitted under the terms of the group program,
then the Company shall provide Executive with a medical insurance policy providing substantially
similar benefits as to the group program for the period ending on the later of: (i) the date of
Executive’s death; (ii) if Executive is married on the date of his death, the date of the death of
Executive’s spouse; or (iii) as to each minor dependent of Executive, the later of the date that
each such dependent reaches the age of twenty-five or completes college (as defined in the
Company’s group program). Executive shall be entitled to receive the medical benefits defined
herein at no cost to the Executive. It is expressly understood between the parties that the
medical insurance provided under this Section 3(f)(2) shall continue regardless of the expiration
of the Term, the Consulting Period or for any reason whatsoever under Section 4 of this Agreement,
if sooner terminated.
(g) Proration. Any payments or benefits payable to Executive hereunder in respect of
any calendar year during which the Executive is employed by the Company for less than
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the entire year, unless otherwise provided in the applicable plan or arrangement or herein,
shall be prorated in accordance with the number of days in such calendar year during which he is so
employed. Notwithstanding the foregoing, any payments pursuant to Sections 4(c) or 4(d) of this
Agreement shall not be subject to proration.
4. Termination.
(a) Definitions.
(1) "Cause” shall mean:
(i) Material dishonesty which is not the result of an inadvertent or innocent
mistake of Executive with respect to the Company or any of its subsidiaries;
(ii) Willful misfeasance or nonfeasance of duty by Executive intended to injure
or having the effect of injuring in some material fashion the reputation, business,
or business relationships of the Company or any of its subsidiaries or any of their
respective officers, directors, or employees;
(iii) Material violation by Executive of any material term of this Agreement;
or
(iv) Conviction of Executive of any felony, any crime involving moral turpitude
or any crime other than a vehicular offense which could reflect in some material
fashion unfavorably upon the Company or any of its subsidiaries.
Executive may not be terminated for Cause unless and until there has been delivered to Executive
written notice from the Board supplying the particulars of Executive’s acts or omissions that the
Board believes constitute Cause, a reasonable period of time (not less than 30 days) has been given
to Executive after such notice to either cure the same or to meet with the Board, with his attorney
if so desired by Executive, and following which the Board by action of not less than a majority of
its members (exclusive of the Executive) furnishes to Executive a written resolution specifying
that Executive has been terminated for Cause as of the date set forth in the notice to Executive.
(2) A "Change of Control” shall be deemed to have occurred if:
(i) Any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of 50% or more of the Company’s then outstanding
voting common stock and, within twelve months after such date, Executive’s duties
are substantially diminished (it being acknowledged that a change of title shall not
be a change of duty); or
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(ii) The shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation (a) in
which a majority of the directors of the surviving entity were directors of the
Company prior to such consolidation or merger, and (b) which would result in the
voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being changed into voting
securities of the surviving entity) more than 50% of the combined voting power of
the voting securities of the surviving entity outstanding immediately after such
merger or consolidation; or
(iii) The shareholders approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or substantially all
of the Company’s assets.
(3) A "Disability” shall mean the absence of Executive from Executive’s duties with
the Company on a full-time basis for 180 consecutive days, or 180 days in a 365-day period, as a
result of incapacity due to mental or physical illness which results in the Executive being unable
to perform the essential functions of his position, with or without reasonable accommodation.
(4) A "Good Reason” shall mean any of the following (without Executive’s express
written consent):
(i) A material alteration in the nature or status of Executive’s duties or
responsibilities, or the assignment of duties or responsibilities inconsistent with
Executive’s duties or responsibilities;
(ii) A failure by the Company to continue in effect any employee benefit plan
in which Executive was participating, or the taking of any action by the Company
that would adversely affect Executive’s participation in, or materially reduce
Executive’s benefits under, any such employee benefit plan, unless such failure or
such taking of any action adversely affects the senior members of corporate
management of the Company generally to the same extent;
(iii) A relocation of the Company’s principal executive offices, or Executive’s
relocation to any place other than the principal executive offices, exceeding a
distance of fifty (50) miles from the Company’s current executive office located in
Houston, Texas, except for reasonably required travel by Executive on the Company’s
business;
(iv) Any material breach by the Company of any provision of this Agreement; or
(v) Any failure by the Company to obtain the assumption and performance of this
Agreement by any successor (by merger, consolidation, or otherwise) or assign of the
Company.
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However, Good Reason shall exist with respect to a matter specified above only if such matter is
not corrected by the Company within thirty (30) days of its receipt of written notice of such
matter from Executive, and in no event shall a termination by Executive occurring more than ninety
(90) days following the date of the event described above be a termination for Good Reason due to
such event.
(5) "Termination Date” shall mean the date Executive is terminated for any reason
pursuant to this Agreement.
(b) Termination Without Cause, or Termination For Good Reason: Benefits. In the
event there is a termination of employment by the Company without Cause, or if Executive terminates
his employment for Good Reason, or if there is a Change of Control and Executive’s employment is
terminated for any reason other than for Cause (a “Termination Event”), this Agreement shall
terminate except as provided in Section 6, and Executive shall be entitled to the following
severance benefits:
(1) Base Salary and Deferred Compensation (as defined in Section 3(a)) for the remainder of
the Term and the Consulting Period, payable in a lump sum in cash within sixty (60) days after the
Termination Date.
(2) To the extent not theretofore paid or provided, or otherwise set forth herein, the Company
shall timely pay or provide to Executive any other amounts or benefits required to be paid or
provided or which Executive is eligible to receive under any plan, program, policy or practice, or
contract or agreement of the Company and its affiliated companies for the period of time equal to
the remainder of the Term, at its sole expense, and shall continue to provide (through its own plan
and/or individual policies) Executive (and Executive’s dependents) with health benefits as provided
in Section 3(f)(2) of this Agreement, (such other amounts and benefits shall be hereinafter
referred to collectively as the “Other Benefits”);
(3) All accrued compensation and unreimbursed expenses through the Termination Date. Such
amounts shall be paid to Executive in a lump sum in cash within thirty (30) days after the
Termination Date; and
(4) Executive shall be free to accept other employment during such period, and there shall be
no offset of any employment compensation earned by Executive in such other employment during such
period against payments due Executive under this Section 4, and there shall be no offset in any
compensation received from such other employment against the Base Salary set forth above.
(c) Termination In Event of Death: Benefits. If Executive’s employment is terminated
by reason of Executive’s death during the Term of this Agreement, this Agreement shall terminate
without further obligation to Executive’s legal representatives under this Agreement, other than
for payment of all compensation and unreimbursed expenses due through the date of death, except as
provided in Section 3(f)(2). Such amounts shall be paid to Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within ninety (90) days after the date of death. In
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addition, Executive’s legal representative shall be entitled to an additional amount equal to
Executive’s Base Salary and Deferred Compensation payable for the lesser of (i) eighteen (18)
months or (ii) the remainder of the Term, in monthly installments beginning within ninety (90) days
after the date of Executive’s death.
(d) Termination In Event of Disability: Benefits. If Executive’s employment is
terminated by reason of Executive’s Disability during the Term, except as provided for in Section 6
and in Section 3(f)(2), this Agreement shall terminate and Executive shall receive payment of Base
Salary and Deferred Compensation for the lesser of (i) eighteen (18) months or (ii) the remainder
of the Term, payable in monthly installments beginning within ninety (90) days after the date of
Executive’s Disability. Executive’s compensation shall not be reduced by any long-term disability
coverage Executive actually receives.
(e) Voluntary Termination by Executive and Termination for Cause: Benefits.
Executive may terminate his employment with the Company without Good Reason by giving written
notice of his intent and stating an effective Termination Date at least ninety (90) days after the
date of such notice; provided, however, that the Company may accelerate such effective date by
paying Executive through the proposed Termination Date and also vesting awards that would have
vested but for this acceleration of the proposed Termination Date. Upon such a termination by
Executive, except as provided in Section 6, or upon termination for Cause by the Company, this
Agreement shall terminate, except as provided in Section 3(f)(2) and the Company shall pay to
Executive all accrued compensation, unreimbursed expenses and the Other Benefits through the
Termination Date. Such amounts shall be paid to Executive in a lump sum in cash within thirty (30)
days after the date of termination.
(f) Director Positions. Upon termination of employment for any reason, Executive
shall remain on any and all Board positions held with the Company and/or any of its subsidiaries
and affiliates unless requested to resign by a majority of the Board (exclusive of Executive.)
5. Non-Competition, Non-Solicitation and Confidentiality. At the inception of this
employment relationship, and continuing on an ongoing basis, the Company agrees to give Executive
access to Confidential Information (including, without limitation, Confidential Information, as
defined below, of the Company’s Affiliates) which the Executive has not had access to or knowledge
of before the execution of this Agreement. At the time this Agreement is made, the Company agrees
to provide Executive with initial and ongoing Specialized Training, which Executive has not had
access to or knowledge of before the execution of this Agreement. “Specialized Training” includes
the training the Company provides to its employees that is unique to its business and enhances
Executive’s ability to perform Executive’s job duties effectively. Specialized Training includes,
without limitation, orientation training; sales methods/techniques training; operation methods
training; and computer and systems training.
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In consideration of the foregoing, Executive agrees as follows:
(a) Non-Competition During Employment. Executive agrees that, in consideration for
the Company’s promise to provide Executive with Confidential Information and Specialized Training,
during the Term he will not compete with the Company by engaging in the conception, design,
development, production, marketing, or servicing of any product or service that is substantially
similar to the products or services which the Company provides, and that he will not work for, in
any capacity, assist, or become affiliated with as an owner, partner, etc., either directly or
indirectly, any individual or business which offers or performs services, or offers or provides
products substantially similar to the services and products provided by Company.
(b) Conflicts of Interest. Executive agrees that during the Term, he will not engage,
either directly or indirectly, in any activity (a “Conflict of Interest”) which might adversely
affect the Company or its affiliates, including ownership of a material interest in any supplier,
contractor, distributor, subcontractor, customer or other entity with which the Company does
business or accepting any material payment, service, loan, gift, trip, entertainment, or other
favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which
the Company does business, and that Executive will promptly inform the Chairman of the Board of the
Company in writing as to each offer received by Executive to engage in any such activity.
Executive further agrees to disclose to the Company any other facts of which Executive becomes
aware which might in Executive’s good faith judgment reasonably be expected to involve or give rise
to a Conflict of Interest or potential Conflict of Interest.
(c) Non-Competition After Termination. Executive agrees that Executive shall not, at
any time during the period of two (2) years after the termination of the Term for any reason,
within any of the markets in which the Company has sold products or services or formulated a plan
to sell products or services into a market during the last twelve (12) months of Executive’s
employ; engage in or contribute Executive’s knowledge to any work which is competitive with or
similar to a product, process, apparatus, service, or development on which Executive worked or with
respect to which Executive had access to Confidential Information while employed by the Company.
Following the expiration of said two (2) year period, Executive shall continue to be obligated
under the Confidential Information Section of this Agreement not to use or to disclose Confidential
Information of the Company so long as it shall not be publicly available. It is understood that
the geographical area set forth in this covenant is divisible so that if this clause is invalid or
unenforceable in an included geographic area, that area is severable and the clause remains in
effect for the remaining included geographic areas in which the clause is valid.
(d) Non-Solicitation of Customers. Executive further agrees that for a period of two
(2) years after the termination of the Term, he will not solicit or accept any business from any
customer or client or prospective customer or client with whom Executive dealt or solicited while
employed by Company during the last twelve (12) months of his employment.
(e) Non-Solicitation of Employees. Executive agrees that for the duration of the
Term, and for a period of two (2) years after the termination of the Term he will not either
directly or indirectly, on his own behalf or on behalf of others, solicit, attempt to hire, or hire
any person employed by the Company to work for Executive or for another entity, firm, corporation,
or individual.
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(f) Confidential Information. Executive further agrees that he will not, except as
the Company may otherwise consent or direct in writing, reveal or disclose, sell, use, lecture
upon, publish or otherwise disclose to any third party any Confidential Information or proprietary
information of the Company, or authorize anyone else to do these things at any time either during
or subsequent to his employment with the Company. This Section shall continue in full force and
effect after termination of Executive’s employment and after the termination of this Agreement.
Executive’s obligations under this Section with respect to any specific Confidential Information
and proprietary information shall cease when that specific portion of the Confidential Information
and proprietary information becomes publicly known, in its entirety and without combining portions
of such information obtained separately. It is understood that such Confidential Information and
proprietary information of the Company include matters that Executive conceives or develops, as
well as matters Executive learns from other employees of Company. Confidential Information is
defined to include information: (1) disclosed to or known by the Executive as a consequence of or
through his employment with the Company; (2) not generally known outside the Company; and (3) which
relates to any aspect of the Company or its business, finances, operation plans, budgets, research,
or strategic development. “Confidential Information” includes, but is not limited to the Company’s
trade secrets, proprietary information, financial documents, long range plans, customer lists,
employer compensation, marketing strategy, data bases, costing data, computer software developed by
the Company, investments made by the Company, and any information provided to the Company by a
third party under restrictions against disclosure or use by the Company or others.
(g) Return of Documents, Equipment, Etc. All writings, records, and other documents
and things comprising, containing, describing, discussing, explaining, or evidencing any
Confidential Information, and all equipment, components, parts, tools, and the like in Executive’s
custody or possession that have been obtained or prepared in the course of Executive’s employment
with the Company shall be the exclusive property of the Company, shall not be copied and/or removed
from the premises of the Company, except in pursuit of the business of the Company, and shall be
delivered to the Company, without Executive retaining any copies, upon notification of the
termination of Executive’s employment or at any other time requested by the Company. The Company
shall have the right to retain, access, and inspect all property of Executive of any kind in the
office, work area, and on the premises of the Company upon termination of Executive’s employment
and at any time during employment by the Company to ensure compliance with the terms of this
Agreement. All office equipment, telecommunications equipment and equipment of a like or similar
kind installed by the Company at the residence of the Executive to facilitate necessary
communication and assist Executive in the performance of his duties shall be conveyed to the
Executive without the payment of consideration upon termination of Executive’s employment. The
Parties understand and agree that the materials described in this Section 5(g) excludes all of
Executive’s personal files, e-mail correspondence, personal notes and professional readers.
(h) Reaffirm Obligations. Upon termination of his employment with the Company,
Executive, if requested by Company, shall reaffirm in writing Executive’s recognition of the
importance of maintaining the confidentiality of the Company’s Confidential Information and
proprietary information, and reaffirm any other obligations set forth in this Agreement.
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(i) Prior Disclosure. Executive represents and warrants that he has not used or
disclosed any Confidential Information he may have obtained from the Company prior to signing this
Agreement, in any way inconsistent with the provisions of this Agreement.
(j) Confidential Information of Prior Companies. Executive will not disclose or use
during the period of his employment with the Company any proprietary or Confidential Information or
Copyright Works which Executive may have acquired because of employment with an employer other than
the Company or acquired from any other third party, whether such information is in Executive’s
memory or embodied in a writing or other physical form.
(k) Breach. Executive agrees that any breach of Sections 5(a), (c), (d), (e) or (f)
above cannot be remedied solely by money damages, and that in addition to any other remedies the
Company may have, the Company is entitled to obtain injunctive relief against Executive. Nothing
herein, however, shall be construed as limiting Company’s right to pursue any other available
remedy at law or in equity, including recovery of damages and termination of this Agreement and/or
any payments that may be due pursuant to this Agreement.
(l) Right to Enter Agreement. Executive represents and covenants to Company that he
has full power and authority to enter into this Agreement and that the execution of this Agreement
will not breach or constitute a default of any other agreement or contract to which he is a party
or by which he is bound.
(m) Extension of Post-Employment Restrictions. In the event Executive breaches
Sections 5(c), (d), or (e) above, the restrictive time periods contained in those provisions will
be extended by the period of time Executive was in violation of such provisions.
(n) Enforceability. The agreements contained in Section 5 are independent of the
other agreements contained herein. Accordingly, failure of the Company to comply with any of its
obligations outside of this Section do not excuse Executive from complying with the agreements
contained herein.
(o) Survivability. The agreements contained in Section 3(f)(2) and Section 5 shall
survive the termination of this Agreement for any reason.
6. Consulting Agreement. If Executive is still employed at December 31, 2010, and
Executive ceases to be an employee at that time (other than Executive having been terminated for
Cause), HCC hereby retains Executive as a consultant (an independent contractor and not as an
employee) for a period of six (6) months (the “Consulting Period”). Executive agrees to provide,
if requested, 500 hours of service (the “Consulting Services”), as required by the Company. HCC
shall pay Executive $300,000 for the Consulting Period, payable monthly, in advance. The
Consulting Services to be provided shall be commensurate with Executive’s training, background,
experience and prior duties with the Company. Executive agrees to make himself reasonably
available to provide such Consulting Services during the Consulting Period; provided, however, the
Company agrees that it shall provide reasonable advance notice to Executive of its expected
consulting needs and any request for Consulting Services hereunder shall not unreasonably interfere
with Executive’s
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other business activities and personal affairs as determined in good faith by Executive. In
addition, Executive shall not be required to perform any requested Consulting Services which, in
Executive’s good faith opinion, would cause Executive to breach any fiduciary duty or contractual
obligation Executive may have to another employer. Executive’s travel time shall constitute hours
of Consulting Services for purposes of this Section 6. The Parties contemplate that, when
appropriate, the Consulting Services shall be performed at Executive’s office or residence and at
the Company’s executive offices in Houston, Texas and may be performed at such other locations only
as they may mutually agree upon. Executive shall be properly reimbursed for all travel and other
expenses reasonably incurred by Executive in rendering the Consulting Services.
7. Assignment. This Agreement cannot be assigned by Executive. The Company may
assign this Agreement only to a successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and assets of the Company
provided such successor expressly agrees in writing reasonably satisfactory to Executive to assume
and perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession and assignment had taken place. Failure of the
Company to obtain such written agreement prior to the effectiveness of any such succession shall be
a material breach of this Agreement.
8. Binding Agreement. Executive understands that his obligations under this Agreement
are binding upon Executive’s heirs, successors, personal representatives, and legal
representatives.
9. Notices. All notices pursuant to this Agreement shall be in writing and sent
certified mail, return receipt requested, addressed as set forth below, or by delivering the same
in person to such party, or by transmission by facsimile to the number set forth below. Notice
deposited in the United States Mail, mailed in the manner described herein above, shall be
effective upon deposit. Notice given in any other manner shall be effective only if and when
received:
If to Executive:
|
Xxxxx X. Xxxxxxxx | |
| 00000 Xxxxxxxx Xxxxx | ||
| Xxxxxxx, Xxxxx 00000 | ||
| Fax: (000) 000-0000 | ||
If to Company:
|
HCC Insurance Holdings, Inc. | |
| 00000 Xxxxxxxxx Xxxxxxx | ||
| Xxxxxxx, Xxxxx 00000 | ||
| Fax: (000) 000-0000 | ||
| Attention: General Counsel | ||
with a copy (which shall
|
Xxxxxx X. Xxxxxx, Esq. | |
not constitute notice) to:
|
Xxxxxx and Xxxxx, LLP | |
| 0000 XxXxxxxx Xxxxxx, | ||
| Xxxxx 0000 | ||
| Xxxxxxx, Xxxxx 00000 | ||
| Fax: (000) 000-0000 |
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10. Waiver. No waiver by either party to this Agreement of any right to enforce any
term or condition of this Agreement, or of any breach hereof, shall be deemed a waiver of such
right in the future or of any other right or remedy available under this Agreement.
11. Severability. If any provision of this Agreement is determined to be void,
invalid, unenforceable, or against public policy, such provisions shall be deemed severable from
the Agreement, and the remaining provisions of the Agreement will remain unaffected and in full
force and effect.
12. Arbitration. In the event any dispute arises out of Executive’s employment with
or by the Company, or separation/termination therefrom, which cannot be resolved by the Parties to
this Agreement, such dispute shall be submitted to final and binding arbitration. The arbitration
shall be conducted in accordance with the National Rules for the resolution of Employment Disputes
of the American Arbitration Association (“AAA”). If the Parties cannot agree on an arbitrator, a
list of seven (7) arbitrators will be requested from AAA, and the arbitrator will be selected using
alternate strikes with Executive striking first. The cost of the arbitration will be shared
equally by Executive and Company; provided, however, the Company shall promptly reimburse Executive
for all costs and expenses incurred in connection with any dispute in an amount up to, but not
exceeding twenty percent (20%) of Executive’s Base Salary (or, if the dispute arises during the
Consulting Period, Executive’s Base Salary as in effect immediately prior to the beginning of the
Consulting Period) unless such termination was for Cause in which event Executive shall not be
entitled to reimbursement unless and until it is determined he was terminated other than for Cause.
Arbitration of such disputes is mandatory and in lieu of any and all civil causes of action and
lawsuits either party may have against the other arising out of Executive’s employment with
Company, or separation therefrom. Such arbitration shall be held in Houston, Texas.
13. Entire Agreement. The terms and provisions contained herein shall constitute the
entire agreement between the parties with respect to Executive’s employment with Company during the
time period covered by this Agreement. This Agreement replaces and supersedes any and all existing
Agreements entered into between Executive and the Company relating generally to the same subject
matter, if any, and shall be binding upon Executive’s heirs, executors, administrators, or other
legal representatives or assigns.
14. Modification of Agreement. This Agreement may not be changed or modified or
released or discharged or abandoned or otherwise terminated, in whole or in part, except by an
instrument in writing signed by the Executive and an officer or other authorized executive of
Company.
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15. Effective Date. It is understood by Executive that this Agreement shall be
effective when signed by both Company and Executive.
16. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas.
17. Jurisdiction and Venue. With respect to any litigation regarding this Agreement,
Executive agrees to venue in the state or federal courts in Xxxxxx County, Texas, and agrees to
waive and does hereby waive any defenses and/or arguments based upon improper venue and/or lack of
personal jurisdiction. By entering into this Agreement, Executive agrees to personal jurisdiction
in the state and federal courts in Xxxxxx County, Texas.
18. Compliance With Section 409A.
(a) Delay in Payments. Notwithstanding anything to the contrary in this Agreement,
(i) if upon the date of Executive’s termination of employment with the Company or expiration and
termination of the Consulting Services pursuant to Section 6 above, Executive is a “specified
employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, or
any regulations or Treasury guidance promulgated thereunder (the “Code”) and the deferral of any
amounts otherwise payable under this Agreement as a result of Executive’s termination of employment
is necessary in order to prevent any accelerated or additional tax to Executive under Code Section
409A, then the Company will defer the payment of any such amounts hereunder until the date that is
six months following the date of Executive’s termination of employment with the Company or
expiration and termination of the Consulting Services pursuant to Section 6 above, at which time
any such delayed amounts will be paid to Executive in a single lump sum, with interest from the
date otherwise payable at the prime rate as published in The Wall Street Journal on the date of
Executive’s termination of employment with the Company, and (ii) if any other payments of money or
other benefits due to Executive hereunder could cause the application of an accelerated or
additional tax under Code Section 409A, such payments or other benefits shall be deferred if
deferral will make such payment or other benefits compliant under Code Section 409A.
(b) Reformation. If any provision of this Agreement would cause Executive to occur any
additional tax under Code Section 409A , the parties will in good faith attempt to reform the
provision in a manner that maintains, to the extent possible, the original intent of the applicable
provision without violating the provision of Code Section 409A.
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IN WITNESS WHEREOF, the Parties have executed this Agreement in multiple copies,
effective as of the date first written above.
| EXECUTIVE | COMPANY | |||||||
| HCC INSURANCE HOLDINGS, INC. | ||||||||
| /s/ Xxxxx X. Xxxxxxxx | By: | /s/ J. Xxxxxx Xxxxxxxxx | ||||||
| XXXXX X. XXXXXXXX | J. XXXXXX XXXXXXXXX, | |||||||
| Chairman of the Board | ||||||||
| Date: | 4-12-07 | Date: | 4-12-07 | |||||
[SIGNATURE PAGE OF BRAMANTI EMPLOYMENT AGREEMENT]
