EXHIBIT 10.5
PRA
RELEASE AND SEVERANCE COMPENSATION AGREEMENT
THIS RELEASE AND SEVERANCE COMPENSATION AGREEMENT (the "Agreement") is
between ProAssurance Corporation, a Delaware corporation ("ProAssurance"), and
Xxxxx X. Xxxxxxx, an individual (the "Executive"). ProAssurance and its
majority-owned subsidiaries are hereinafter collectively referred to as the
"Companies."
RECITALS:
The Executive is currently employed by one of the Companies in an at
will employment relationship. ProAssurance has offered to expand protection to
the Executive in the form of severance benefits payable on termination of
employment under certain circumstances in consideration of Executive's agreement
to continue his [her] employment under the terms of this Agreement. The
Executive desires to continue employment with the Companies under such terms and
conditions, and with the protection afforded to the Executive by this Agreement.
AGREEMENT
NOW, THEREFORE, These Premises Considered, and in consideration of the
mutual covenants and promises in this Agreement, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Term of Agreement. This Agreement shall continue in effect for
a period of one year from date hereof (the "Initial Term"). Thereafter, this
Agreement shall automatically be extended for successive terms of one year (a
"Renewal Term"), except this Agreement may be terminated after the Initial Term
upon delivery of written notice of the termination of this Agreement by any of
the Companies at least six months prior to the commencement of any Renewal Term.
If the Executive's employment is terminated during the term of the Agreement,
the date on which the Executive's employment terminates shall be referred to as
the "Date of Termination."
2. Severance Benefits. If during the term of this Agreement the
Executive leaves the employment of the Companies for Good Reason, as explained
in Section 4 of this Agreement, and the Executive signs the release (the
"Release") that is attached to and incorporated in this Agreement, the Executive
shall receive the following benefits (the "Severance Benefits"):
(a) An amount equal to the Executive's annual base
salary. The "annual base salary" of the Executive shall be defined as
the Executive's base rate of compensation in effect as of the Date of
Termination, but in no event less than the Executive's base rate of
compensation in effect as of the end of the last calendar quarter
preceding the Date of Termination;
(b) An amount equal to the average annual incentive
award(s) or bonus(es) paid to Executive in each of the three complete
calendar years prior to the Date of Termination (but not including in
such average calendar year 2000) or, if shorter, in each of the
complete calendar years during the Executive's entire period of
employment with the Companies. The "annual incentive award(s) or
bonus(es)" shall mean the sum of (i) amount of cash awards or bonuses,
plus (ii) the value of stock awards, in each case
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accrued by the Companies for the account of the Executive as
performance based compensation (whether or not deferred) during the
applicable year. The value of stock awarded to the Executive shall be
calculated based on the value of the stock as of the date the stock was
awarded to the Executive as annual incentive compensation.
Notwithstanding the foregoing, the Executive's actual total annual
incentive awards or bonuses shall be calculated excluding the value of
options to purchase stock which may have been awarded to the Executive;
(c) Payment of the Executive's monthly COBRA premiums for
continued health and dental insurance coverage for the shorter of the
following: (i) 12 months after the Date of Termination; (ii) until the
Executive no longer has coverage under COBRA; or (iii) until the
Executive becomes eligible for substantially similar coverage under a
subsequent employer's group health plan; and
(d) Outplacement services that are customary to
Executive's position.
Subject to the delivery of the executed Release by Executive, the
severance benefits described in subparagraphs (a) and (b) above shall be paid in
cash or good funds in equal monthly installments during the period that the
covenants set forth in Section 7 shall be in effect commencing on the first day
of the calendar month that occurs thirty (30) days after the Date of
Termination; provided that the obligation of the Companies to pay such severance
benefits to the Executive shall be subject to termination under the provisions
of Section 7 hereof in the event the Executive should violate the covenants set
forth therein; and provided further that the payment of such severance benefits
shall be accelerated and payable in lump sum by the Companies upon a breach of
this Agreement as a result of the failure of a successor (herein defined) to
assume this Agreement as required in Section 9 of this Agreement. The Companies
shall withhold from any
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amounts payable under this Agreement all federal, state, city or other income
and employment taxes that shall be required.
The Companies shall fund the obligation to pay Severance Benefits under
subparagraphs (a) and (b) hereof by depositing in escrow an amount equal to the
sum of the amounts payable to the Executive thereunder (the "Escrow Funds") with
SouthTrust Bank (or another financial institution with total assets of more than
$1,000,000,000) as escrow agent (the "Escrow Agent"). The Escrow Funds shall be
the property of the Companies and shall be held, invested and distributed by
Escrow Agent in accordance with the following provisions. At the time of
delivery of the Escrow Funds, the Escrow Agent shall acknowledge receipt of the
Escrow Funds and agree to be bound by the provisions of this Agreement in a
separate written document. The Escrow Agent shall invest the Escrow Funds in a
money market account for the benefit of the Companies and shall distribute the
earnings not more frequently than monthly. Unless and until the Escrow Agent
receives notice from ProAssurance that the Executive has breached this
Agreement, the Escrow Agent shall distribute the Escrow Funds to the Executive
in the same number of equal monthly installments as the number of whole calendar
months in the Restricted Period (as defined in Section 7 hereof). The monthly
installments shall be distributed to the Executive on the first day of each
calendar month in the Restricted Period together with accrued and undistributed
earnings on the Escrow Funds. If the Company delivers written notice to the
Escrow Agent and Executive that the Severance Benefits payable to Executive are
subject to termination under Section 7 of this Agreement, the Escrow Agent shall
distribute the balance of the Escrow Funds and accrued and undistributed
earnings thereon to ProAssurance unless the Escrow Agent receives a written
notice of objection from the Executive within 15 days after delivery of
ProAssurance's notice. If Executive provides a timely notice of objection, the
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Escrow Agent shall hold the Escrow Funds until it receives a written notice of
distribution from the arbitrator appointed pursuant to Section 12 hereof or a
joint written notice of distribution from the Executive and ProAssurance. The
failure of the Executive or the Company to deliver notice to the Escrow Agent as
herein provided shall not be a waiver of any of their respective rights under
this Agreement.
The Executive shall be entitled to the following in addition to and not
in limitation of the Severance Benefits: (i) accrued and unpaid base salary as
of the Date of Termination; (ii) accrued vacation and sick leave, if any, on
Date of Termination in accordance with the then current policy of the Companies
with respect to terminated employees generally; and (iii) vested benefits under
the Companies' employee benefit plans in which the Executive was a participant
on Date of Termination, which vested benefits shall be paid or provided for in
accordance with the terms of said employee benefit plans.
The Executive shall not be entitled to receive Severance Benefits if
employment with the Companies is terminated by reason of death of Executive,
retirement of Executive as permitted under a retirement plan as then in effect
for the Companies, the Executive having reached the age of mandatory retirement
(if such requirement then exists for bona fide executives); or Disability of
Executive (herein defined); or by reason of termination of employment by the
Executive without Good Reason (herein defined); or by reason of termination of
employment by the Companies with Cause (herein defined).
The Executive shall be under no duty or obligation to seek or accept
other employment and shall not be required to mitigate the amount of the
Severance Benefits provided under the Agreement by seeking employment or
otherwise; provided, however, that the Executive shall be required to notify the
Companies if the Executive becomes covered by a health or dental care
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program providing substantially similar coverage, at which time health or dental
care continuation coverage provided under this Agreement shall cease.
3. Parachute Payments. Subject to Section 280G of the Internal
Revenue Code of 1986, as amended ("Code"), if the board of directors of
ProAssurance determines that an excise tax under Section 4999 ("Excise Tax")
would be due, the Executive's Severance Benefits under this Agreement shall be
limited to the amount necessary to avoid the Excise Tax. For purposes of making
such computation:
(a) Any other payments or benefits received or to be
received by the Executive in connection with the Change of Control or the
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement, or agreement with the Companies, or
with any person whose actions result in the Change of Control) shall be treated
as "parachute payments" within the meaning of Section 280G(b)(2) of the Code,
and all "excess parachute payments" within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax, unless, in the opinion
of tax counsel selected by ProAssurance's independent auditors, such other
payments or benefits (in whole or in part) do not constitute parachute payments,
or such other payments or benefits (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or such other payments or benefits (in whole or
in part) are otherwise not subject to the Excise Tax. In the event an Excise Tax
is due, because of payments made under this Agreement, the Executive shall be
responsible for paying said Excise Tax.
(b) The amount of the Severance Benefits that will be
treated as subject to the Excise Tax shall be equal to the lesser of: (i) the
total amount of the Severance Benefits; or
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(ii) the amount of excess parachute payments within the meaning of Section
280G(b)(1) (after applying subparagraph (a) above).
(c) The value of any noncash benefits or any deferred
payment or benefit shall be determined by ProAssurance's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
(d) The Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in a calendar year
in which the Severance Benefits are to be paid, and state and local income taxes
at the highest marginal rate of taxation in the state and locality of the
Executive's residence on the Date of Termination, net of the maximum reduction
in federal income taxes that could be obtained from deduction of such state and
local taxes.
In the event the Internal Revenue Service adjusts the computation in
subparagraphs (a) through (d) above, so that the Executive did not receive the
greatest net benefit, the Companies shall reimburse the Executive for the amount
necessary to make the payment of Severance Benefits to the Executive to the
extent permitted hereunder, plus a market rate of interest as determined by the
Board of Directors of ProAssurance.
4. Good Reason for Termination. In the event that the Executive's
employment relationship with the Companies is terminated for any of the reasons
described in this Section 4, the Executive shall be entitled to Severance
Benefits, subject to and described in Section 2 of this Agreement. "Good Reason"
shall constitute any of the following circumstances if they occur without the
Executive's express written consent during the term of this Agreement:
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(a) The Executive no longer holds an executive level
position with executive level responsibilities with the Companies consistent
with the Executive's training and experience;
(b) The Companies require that the Executive's primary
location of employment be more than 50 miles from the location of the
Executive's primary location of employment on date of this Agreement;
(c) The failure of the Companies to provide the
Executive, at a level commensurate with the Executive's position, the incentive
compensation opportunities and employee benefits that are provided to other
executives of comparable rank with the Companies;
(d) A breach by the Companies of any provision of this
Agreement. including without limitation, the failure of a successor to assume
this Agreement as required in Section 9 hereof;
(e) The termination of the Executive's employment by the
Companies for a reason other than: (i) death; (ii) retirement pursuant to a
retirement plan as then in effect for the Companies; (iii) Disability as
explained in Section 5 of this Agreement; (iv) the Executive has reached the age
of mandatory retirement (if such requirement then exists for bona fide
executives); (v) for Cause, as explained in Section 6 of this Agreement;
(f) A reduction by the Companies in the Executive's base
salary in effect as of the date of this Agreement; or
(g) The termination or non-renewal of this Agreement by
the Companies.
The Executive must provide the Companies with written notice no later
than 45 calendar days after the Executive knows or should have known that Good
Reason has occurred.
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Following the Executive's Notice, the Companies shall have 45 calendar days to
rectify the circumstances causing the Good Reason. If the Companies fail to
rectify the event(s) causing the Good Reason within the 45 day period after the
Executive's Notice, or if any of the Companies delivers to the Executive written
notice stating that the circumstances cannot or shall not be rectified, the
Executive shall be entitled to assert Good Reason and terminate employment on or
before 90 days after the delivery of the Executive's Notice. Should Executive
fail to provide the required Notice in a timely manner, Good Reason shall not be
deemed to have occurred as a result of that event. The Initial Term or a Renewal
Term shall not be deemed to have expired during the Notice period, however, as
long as the Executive has provided Notice within the Term.
5. Disability. For purposes of this Agreement, Disability means a
serious injury or illness that requires the Executive to be under the regular
care of a licensed medical physician and renders the Executive incapable of
performing the essential functions of the Executive's position for 12 months as
determined by the Board of Directors of the Companies in good faith and upon
receipt of and in reliance on competent medical advice from one or more
individuals selected by the Board of Directors, who are qualified to give
professional medical advice.
6. Cause. If the Executive's employment relationship with the
Companies is terminated by the Companies for Cause, as described below in this
Section, the Executive shall not be eligible for Severance Benefits and all
rights of the Executive and obligations of the Companies under this Agreement
shall expire. Cause means:
(a) The Executive has been convicted in a federal or
state court of a crime classified as a felony;
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(b) Action or inaction by the Executive (i) that
constitutes embezzlement, theft, misappropriation or conversion of assets of the
Companies which alone or together with related actions or inactions involve
assets of more than a de minimis amount, or that constitutes fraud, gross
malfeasance of duty, or conduct grossly inappropriate to Executive's office; and
(ii) such action or inaction has adversely affected or is likely to adversely
affect the business of the Companies or has resulted or is intended to result in
direct or indirect gain or personal enrichment of the Executive to the detriment
of the Companies;
(c) The Executive has been grossly inattentive to, or
in a grossly negligent manner failed to competently perform, Executive's job
duties and the failure was not cured within 45 days after written notice from
the Companies.
Any termination of the Executive's employment by the Companies for
Cause shall be communicated by a notice of termination (the "Notice of
Termination") to the Executive. The Notice of Termination shall be a written
notice indicating the specific termination provision of this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
this provision.
7. Non-Competition.
(a) The Executive will not during the Restricted Period
(herein defined):
(i) become employed by a competitor company at
any location and directly solicit or sell medical professional
liability insurance to any person or entity that was insured by any of
the Companies within one year prior to the Date or Termination, or
directly provide services related to medical professional liability
insurance to any such person or entity; or
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(ii) receive or earn compensation of any type
directly arising out of the purchase of medical professional liability
insurance by any person or entity that was insured by the Companies at
any time within one year prior to the Date of Termination; or
(iii) solicit or induce any other employees of the
Companies to leave such employment or accept employment with any other
person or entity, or solicit or induce any insurance agent of the
Companies to offer, sell or market medical professional liability
insurance for a competitor company in the primary market of the
Companies.
"Competitor company" means an insurance company,
insurance agency, business, for profit or not for profit
organization (other than the Companies) that provides, or
offers to provide medical professional liability insurance to
health care providers.
"Health care providers" means physicians, dentists,
podiatrists, physician assistants, nurse practitioners, other
individual health care providers and hospital and other
institutional health care providers.
"Medical professional liability insurance" means
medical malpractice insurance and reinsurance, and equivalent
self-insured services such as administration of self-insured
trusts, claims management services and risk management
services for health care providers. "Medical professional
liability insurance" does not include services provided as an
employee of a health care provider if such services are
rendered solely for the purpose of servicing medical
professional liability risk of the employer or that of its
employees.
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"Primary market area" means any state in which the
Companies derived more than $5 million in direct written
premiums from the sale of medical professional liability
insurance to health care providers in the most recent complete
fiscal year prior to the Date of Termination.
"Restricted Period" means a period of 12 months from
the Date of Termination.
"Employed" includes activities as an owner,
proprietor, employee, agent, solicitor, partner, member,
manager, principal, shareholder (owning more than 1% of the
outstanding stock), consultant, officer, director or
independent contractor.
"Companies" means any company that is a subsidiary of
ProAssurance, now or in the future, and any other company that
has succeeded to the business of any of the Companies.
(b) If the Executive is deemed to have materially
breached the non-competition covenants set forth in Section 7 of this Agreement,
the Companies may, in addition to seeking an injunction or any other remedy they
may have, withhold or cancel any remaining payments or benefits due to the
Executive pursuant to Section 2 of this Agreement. The Companies shall give
prior or contemporaneous written notice of such withholding or cancellation of
payments in accordance with Section 2 hereof. If the Executive violates any of
these restrictions, the Companies shall be further entitled to an immediate
preliminary and permanent injunctive relief, without bond, in addition to any
other remedy which may be available to the Companies.
(c) Both parties agree that the restrictions in this
Agreement are fair and reasonable in all respects, including the geographic and
temporal restrictions, and that the
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benefits described in this Agreement, to the extent any separate or special
consideration is necessary, are fully sufficient consideration for the
Executive's obligations under this Agreement.
8. Confidentiality. Executive will remain obligated under any
confidentiality or nondisclosure agreement with the Companies (or any of them)
that is currently in effect or to which the Executive may in the future be
bound. In the event that the Executive is at any time not the subject of a
separate confidentiality or nondisclosure agreement with the Companies (or any
of them), Executive expressly agrees that Executive shall not use for the
Executive's personal benefit, or disclose, communicate or divulge to, or use for
the direct or indirect benefit of any person, firm, association or company any
confidential or competitive material or information of the Companies or their
subsidiaries, including without limitation, any information regarding insureds
or other customers, actual or prospective, and the contents of their files;
marketing, underwriting or financial plans or analyses which is not a matter of
public record; claims practices or analyses which are not matters of public
record; pending or past litigation in which the Companies have been involved and
which is not a matter of public record; and all other strategic plans, analyses
of operations, computer programs, personnel information and other proprietary
information with respect to the Companies which are not matters of public
record. Executive shall return to the Companies promptly, and in no event later
than the Date of Termination, all items, documents, lists and other materials
belonging to the Companies or their subsidiaries, including but not limited to,
credit, debit or service cards, all documents, computer tapes, or other business
records or information, keys and all other items in the Executive's possession
or control.
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9. Successors of ProAssurance. ProAssurance will require any
successor (herein defined) to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Companies would be
required to perform this Agreement if no such succession had taken place.
Failure of ProAssurance to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive to terminate employment for Good Reason and receive Severance Benefits
as provided in Section 2 hereof. Reference to the Companies in this Agreement
shall include any successor which assumes and agrees to perform this Agreement
by operation of law or otherwise.
The term "successor" means any Person, as defined by Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
either (i) becomes the Beneficial Owner, as defined by Rule 13d-3 of the General
Rules and Regulations under the Exchange Act, directly or indirectly, of the
securities of ProAssurance representing more than 50.1% of the combined voting
power of the then outstanding securities of ProAssurance; (ii) purchases or
otherwise acquires substantially all of the assets of the Companies such that
the Companies cease to function on a going forward basis as an insurance holding
company system that provides medical professional liability insurance; or (iii)
survives a merger, consolidation or reorganization that results in less than
50.1% of the combined voting power of ProAssurance or such surviving entity
being owned by stockholders of ProAssurance immediately preceding such merger,
consolidation or reorganization.
10. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or commercial courier or
mailed by certified or registered mail, return
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receipt requested, postage prepaid, addressed to the respective addresses as set
forth below or to such other address as one party may have furnished to the
other in writing in accordance herewith.
Notice to the Executive:
-----------------------
-----------------------
-----------------------
Notice to the Companies:
ProAssurance Corporation
Mailing Address:
P. X. Xxx 000000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Street Address:
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board
11. Claims Procedure.
(a) The administrator for purposes of this Agreement
shall be ProAssurance ("Administrator"), whose address is 000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000; Telephone: (000) 000-0000. The "Named Fiduciary" as
defined in Section 402(a)(2) or ERISA, also shall be ProAssurance. ProAssurance
shall have the right to designate one or more employees of the Companies as the
Administrator and the Named Fiduciary at any time, and to change the address and
telephone number of the same. ProAssurance shall give the Executive written
notice of any change in the Administrator and Named Fiduciary, or in the address
or telephone number of the same.
(b) The Administrator shall make all determinations as to
the right of any person to receive benefits under the Agreement. Any denial by
the Administrator of a claim for benefits
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by the Executive ("the claimant") shall be stated in writing by the
Administrator and delivered or mailed to the claimant within ten (10) days after
receipt of the claim, unless special circumstances require an extension of time
for processing the claim. If such an extension is required, written notice of
the extension shall be furnished to the claimant prior to the termination of the
initial 10-day period. In no event shall such extension exceed a period of ten
(10) days from the end of the initial period. Any notice of denial shall set
forth the specific reasons for the denial, specific reference to pertinent
provisions of this Agreement upon which the denial is based, a description of
any additional material or information necessary for the claimant to perfect the
claim, with an explanation of why such material or information is necessary, and
any explanation of claim review procedures, written to the best of the
Administrator's ability in a manner that may be understood without legal or
actuarial counsel.
(c) A claimant whose claim for benefits has been wholly
or partially denied by the Administrator may request, within ten (10) days
following the receipt of such denial, in a writing addressed to the
Administrator, a review of such denial. The claimant shall be entitled to submit
such issues or comments in writing or otherwise, as the claimant shall consider
relevant to a determination of the claim, and the claimant may include a request
for a hearing in person before the Administrator. Prior to submitting the
request, the claimant shall be entitled to review such documents as the
Administrator shall agree are pertinent to the claim. The claimant may, at all
stages of review, be represented by counsel, legal or otherwise, of the
claimant's choice. All requests for review shall be promptly resolved. The
Administrator's decision with respect to any such review shall be set forth in
writing and shall be mailed to the claimant not later than ten (10) days
following receipt by the Administrator of the claimant's request unless special
circumstances, such as the need to hold a hearing, require an extension of time
for processing, in
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which case the Administrator's decision shall be so mailed not later than twenty
(20) days after receipt of such request.
12. Arbitration. The parties to this Agreement agree that final
and binding arbitration shall be the sole recourse to settle any claim or
controversy arising out of or relating to a breach or the interpretation of this
Agreement, except as either party may be seeking injunctive relief. Either party
may file for arbitration. A claimant seeking relief on a claim for benefits,
however, must first follow the procedure in Section 11 hereof and may file for
arbitration within sixty (60) days following claimant's receipt of the
Administrator's written decision on review under Section 11(c) hereof, or if the
Administrator fails to provide any written decision under Section 11 hereof,
within 60 days of the date on which such written decision was required to be
delivered to the claimant as therein provided. The arbitration shall be held at
a mutually agreeable location, and shall be subject to and in accordance with
the arbitration rules then in effect of the American Arbitration Association;
provided that if the location cannot be agreed upon the arbitration shall be
held in either Atlanta, Georgia, or Chicago, Illinois, whichever location is
closer to the principal office where the Executive was employed on the Date of
Termination. The arbitrator may award any and all remedies allowable by the
cause of action subject to the arbitration, but the arbitrator's sole authority
shall be to interpret and apply the provisions of this Agreement. In reaching
its decision the arbitrator shall have no authority to change or modify any
provision of this Agreement or other written agreement between the parties. The
arbitrator shall have the power to compel the attendance of witnesses at the
hearing. Any court having jurisdiction may enter a judgment based upon such
arbitration. All decisions of the arbitrator shall be final and binding on the
parties without appeal to any court. Upon execution of this Agreement, the
Executive shall be deemed to have waived any right to commence litigation
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proceedings regarding this Agreement outside of arbitration or injunctive relief
without the express consent of ProAssurance. The Companies shall pay all
arbitration fees and the arbitrator's compensation. If the Executive prevails in
the arbitration proceeding, the Companies shall reimburse to the Executive the
reasonable fees and expenses of Executive's personal counsel for his or her
professional services rendered to the Executive in connection with the
enforcement of this Agreement.
13. Miscellaneous.
(a) Except insofar as this provision may be contrary to
applicable law, no sale, transfer, alienation, assignment, pledge,
collateralization or attachment of any benefits under this Agreement shall be
valid or recognized by the Companies.
(b) This Agreement is an unfunded deferred compensation
arrangement for a member of a select group of the Companies' management and any
exemptions under ERISA, as applicable to such arrangement, shall be applicable
to this Agreement. Nothing in this Agreement shall require or be deemed to
require the Companies or any of them to segregate, earmark or otherwise set
aside any funds or other assets to provide for any payments made or required to
be made hereunder.
(c) Nothing in this Agreement shall be deemed to create
an employment agreement between the Executive and the Companies or any of them
providing for Executive's employment for any fixed duration, nor shall it be
deemed to modify or undercut the Executive's at will employment status with the
Companies.
(d) Neither the provisions of this Agreement nor the
severance benefits provided hereunder shall reduce any amounts otherwise
payable, or in any way diminish the Executive's
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rights as an employee of the Companies, whether existing now or hereafter, under
any benefit, incentive, retirement, stock option, stock bonus or stock purchase
plan, or any employment agreement or other plan or arrangement.
(e) This Agreement sets forth the entire agreement
between the parties with respect to the matters set forth herein. This Agreement
may not be modified or amended except by written agreement intended as such and
signed by all parties.
(f) This Agreement shall benefit and be binding upon the
parties and their respective directors, officers, employees, representatives,
agents, heirs, successors, assigns, devisees, and legal or personal
representatives.
(g) The Companies, from time to time, shall provide
government agencies with such reports concerning this Agreement as may be
required by law, and shall provide Executive with such disclosure concerning
this Agreement as may be required by law or as the Companies may deem
appropriate.
(h) Executive and the Companies respectively acknowledge
that each of them has read and understand this Agreement, that they have each
had adequate time to consider this Agreement and discuss it with each of their
attorneys and advisors, that each of them understands the consequences of
entering into this Agreement, that each of them is knowingly and voluntarily
entering into this Agreement, and that they are each competent to enter into
this Agreement.
(i) If any provision of this Agreement is determined to
be unenforceable, at the discretion of ProAssurance the remainder of this
Agreement shall not be affected but each remaining provision shall continue to
be valid and effective and shall be modified so that it is enforceable to the
fullest extent permitted by law. Moreover, in the event this Agreement is
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determined to be unenforceable against any of the Companies, it shall continue
to be valid and enforceable against the other Companies.
(j) This Agreement will be interpreted as a whole
according to its fair terms. It will not be construed strictly for or against
either party.
(k) Except to the extent that federal law controls, this
Agreement is to be construed according to Alabama law.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement effective as of the 1st day of January, 2002.
EXECUTIVE:
Name: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
PROASSURANCE CORPORATION
By: /s/ A. Xxxxxxx Xxxxx
---------------------------------
Its: Chairman
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RELEASE IN CONJUNCTION WITH SEVERANCE COMPENSATION
This Release of Claims ("Release") is between ProAssurance Corporation
("ProAssurance"), The Medical Assurance Company, Inc., and any successor company
that has assumed the Agreement to which this Release was an attachment (all such
organizations being referred to in this Release as the "Companies") and _______
________ ("Executive").
The Companies and Executive have agreed to terminate their employment
relationship. To effect an orderly termination, the Executive, and the Companies
are entering into this Release.
1. For the purposes of this Release, "Date of Termination" is the
effective date of Executive's termination of employment from Companies.
Executive hereby waives any and all rights Executive may otherwise have to
continued employment with or re-employment by the Companies or any parent,
subsidiary or affiliate of Companies.
2. Effective with the Date of Termination, Executive is relieved
of all duties and obligations to the Companies, except as provided in this
Release or any applicable provisions of the Release and Severance Compensation
Agreement between Companies and Executive, effective as of _____________, 2001
("Agreement"), which survive termination of the employment relationship.
3. Executive agrees that this Release and its terms are
confidential and shall not be disclosed or published directly or indirectly to
third persons, except as necessary to enforce its terms, by Executive or to
Executive's immediate family upon their agreement not to disclose the fact or
terms of this Release, or to Executive's attorney, financial consultant or
accountant, except that Executive may disclose, as necessary, the fact that
Executive has terminated Executive's employment with the Companies.
4. Any fringe benefits that Executive has received or currently
is receiving from the Companies or its affiliates shall cease effective with the
Date of Termination, except as otherwise provided for in this Release, in the
Agreement or by law.
5. The parties agree that the terms contained and payments
provided for in the Agreement are compensation for and in full consideration of
Employee's release of claims under this Release, and Executive's
confidentiality, non-compete, non-solicitation and non-disclosure agreements
contained in the Agreement.
6. The Executive shall be under no duty or obligation to seek or
accept other employment and shall not be required to mitigate the amount of the
Severance Benefits (as defined and provided under the Agreement) by seeking
employment or otherwise, provided, however, that the Executive shall be required
to notify the Companies if the Executive becomes covered by a health or dental
care program providing substantially similar coverage, at which time health or
dental care continuation coverage provided under the Agreement shall cease.
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7. Executive waives, releases, and forever discharges the
Companies and each of their direct or indirect parents, subsidiaries,
affiliates, and any partnerships, joint ventures or other entities involving or
related to any of the Companies, their parents, subsidiaries or affiliates, and
all present or former employees, officers, agents, directors, successors,
assigns and attorneys of any of these corporations, persons or entities (all
collectively referred to in this Release as the "Released") from any and all
claims, charges, suits, causes of action, demands, expenses and compensation
whatsoever, known or unknown, direct or indirect, on account of or growing out
of Executive's employment with and termination from the Companies, or
relationship or termination of such relationship with any of the Released, or
arising out of related events occurring through the date on which this Release
is executed. This includes, but is not limited to, claims for breach of any
employment contract; handbook or manual; any express or implied contract; any
tort; continued employment; loss of wages or benefits; attorney fees; employment
discrimination arising under any federal, state, or local civil rights or
anti-discrimination statute, including specifically any claims Executive may
have under the federal Age Discrimination in Employment Act, as amended, 29 USC
xx.xx. 621, et seq.; emotional distress; harassment; defamation; slander; and
all other types of claims or causes of action whatsoever arising under any other
state or federal statute or common law of the United States.
8. The Executive does not waive or release any rights or claims
that may arise under the federal Age Discrimination in Employment Act, as
amended, after the date on which this Release is executed by the Executive.
9. The Executive acknowledges and agrees that Executive has been
advised in writing by this Release, and otherwise, to CONSULT WITH AN ATTORNEY
before Executive executes this Release.
10. The Executive agrees that Executive received a copy of this
Release prior to executing the Agreement, that this Release incorporates the
Companies' FINAL OFFER; that Executive has been given a period of at least
twenty-two (22) calendar days within which to consider this Release and its
terms and to consult with an attorney should Executive so elect.
11. The Executive shall have seven (7) calendar days following
Executive's execution of this Release to revoke this Release. Any revocation of
this Release shall be made in writing by the Executive and shall be received on
or before the time of close of business on the seventh calendar day following
the date of the Employee's execution of this Release at ProAssurance's address
at 000 Xxxxxxxxx Xxxxx, P. O. Box 590009, Birmingham, Alabama 35259-0009,
Attention: Chairman, or such other place as the Companies may notify Executive
in writing. This Release shall not become effective or enforceable until the
eighth (8th) calendar day following the Executive's execution of this Release.
12. Executive and the Companies acknowledge that they have read
and understand this Release, that they have had adequate time to consider this
Release and discuss it with their attorneys and advisors, that they understand
the consequences of entering into this Release, that they are knowingly and
voluntarily entering into this Release, and that they are competent to enter
into this Release.
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13. This Release shall benefit and be binding upon the parties and
their respective directors, officers, employees, agents, heirs, successors,
assigns, devisees and legal or personal representatives.
14. This Release, along with the attached Agreement, sets forth
the entire agreement between the parties at the time and date these documents
are executed, and fully supersedes any and all prior agreements or
understandings between them pertaining to the subject matter in this Release.
This Release may not be modified or amended except by a written agreement
intended as such, and signed by all parties.
15. Except to the extent that federal law controls, this Release
is to be construed according to the law of the state of Alabama.
16. If any provision of this Release is determined to be
unenforceable, at the discretion of ProAssurance the remainder of this Release
shall not be affected but each remaining provision or portion shall continue to
be valid and effective and shall be modified so that it is enforceable to the
fullest extent permitted by law.
17. To signify their agreement to the terms of this Release, the
parties have executed it on the date set forth opposite their signatures, or
those of their authorized agents, which follow.
EXECUTIVE
Dated:
------------------------- -------------------------------------------
PROASSURANCE CORPORATION
Dated: By:
------------------------- ----------------------------------------
Its:
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