EXHIBIT 10.11
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement") is made
by and between Assurant, Inc. (the "Company") and Xxxxxx Xxxxxxxxx (the
"Executive"), and is effective as of the 1st day of January, 2005.
The Executive's Multiplier (as defined in Section 1(f) below) is 3.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change in Control and to encourage
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change in Control, and to provide Executive
with compensation and benefits arrangements upon a Change in Control which
ensure that the compensation and benefits expectations of Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH HEREIN, THE PARTIES
AGREE AS FOLLOWS:
1. Certain Definitions. Each of the following terms, when used in this
Agreement, has the meaning set forth below:
(a) "Agreement Term" means the period of time beginning on the
date of this Agreement and ending on December 31, 2005, unless
this Agreement has been previously terminated as provided in
Section 10(f). The Company may in its complete and sole
discretion, at any time and from time to time, extend the
Agreement Term by giving a written notice to the Executive;
provided, however, that if an agreement has been executed by
the Company or any of its affiliates that contemplates a
transaction that will be a Change in Control when consummated,
the Agreement Term will be automatically extended until the
earlier of the date of such consummation or the termination of
such agreement prior to any such consummation.
(b) "Change in Control" means any one of the following events:
(i) individuals who, on the date of this Agreement,
constitute the Board of Directors of the Company (the
"Incumbent Directors") cease for any reason to
constitute at least a majority of such Board,
provided that any individual becoming a director
after the date of this Agreement and whose election
or nomination for election was
approved by a vote of at least a majority of the
Incumbent Directors then on the Board shall be an
Incumbent Director; provided, however, that no
individual initially elected or nominated as a
director of the Company as a result of an actual or
threatened election contest with respect to the
election or removal of directors ("Election Contest")
or other actual or threatened solicitation of proxies
or consents by or on behalf of any Person other than
the Board ("Proxy Contest"), including by reason of
any agreement intended to avoid or settle any
Election Contest or Proxy Contest, shall be deemed an
Incumbent Director; or
(ii) any Person becomes, after the date of this Agreement,
a "beneficial owner" (as defined in Rule 13d-3 under
the 0000 Xxx) of either (A) 30% or more of the then
outstanding shares of common stock of the Company
("Company Common Stock") or (B) securities of the
Company representing 30% or more of the combined
voting power of the Company's then outstanding
securities entitled to vote for the election of
directors (the "Company Voting Securities");
provided, however, that for purposes of this
subsection 1(b)(ii), the following acquisitions of
Company Common Stock or Company Voting Securities
shall not constitute a Change in Control: (1) an
acquisition directly from the Company; (2) an
acquisition by the Company or a Subsidiary of the
Company; (3) an acquisition by a Person who is on the
date of this Agreement the beneficial owner, directly
or indirectly, of 50% or more of the Company Common
Stock or the Company Voting Securities; (4) an
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
Subsidiary of the Company; or (5) an acquisition
pursuant to a Non-Qualifying Transaction (as defined
in subsection 1(b)(iii) below); or
(iii) the consummation of a reorganization, merger,
consolidation, statutory share exchange or similar
form of corporate transaction involving the Company
or a Subsidiary (a "Reorganization"), or the sale or
other disposition, directly or indirectly, of all or
substantially all of the Company's assets (a "Sale")
or the acquisition of assets or stock of another
corporation (an "Acquisition"), unless immediately
following such Reorganization, Sale or Acquisition:
(1) all or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the outstanding Company Common Stock
and outstanding Company Voting Securities immediately
prior to such Reorganization, Sale or Acquisition
beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the
then outstanding voting securities entitled to vote
generally in the election of directors, as
- 2 -
the case may be, of the corporation resulting from
such Reorganization, Sale or Acquisition (including,
without limitation, a corporation that as a result of
such transaction owns the Company or all or
substantially all of the Company's assets or stock
either directly or through one or more subsidiaries,
the "Surviving Corporation") in substantially the
same proportions as their ownership immediately prior
to such Reorganization, Sale or Acquisition of the
outstanding Company Common Stock and the outstanding
Company Voting Securities, as the case may be; and
(2) no Person (other than (A) the Company or any
Subsidiary of the Company, (B) the Surviving
Corporation or its ultimate parent corporation, or
(C) any employee benefit plan (or related trust)
sponsored or maintained by any of the foregoing) is
the beneficial owner, directly or indirectly, of 30%
or more of the total common stock or 30% or more of
the total voting power of the outstanding voting
securities eligible to elect directors of the
Surviving Corporation, and (3) at least a majority of
the members of the board of directors of the
Surviving Corporation were Incumbent Directors at the
time of the Board's approval of the execution of the
initial agreement providing for such Reorganization,
Sale or Acquisition (any Reorganization, Sale or
Acquisition that satisfies all of the criteria
specified in (1), (2) and (3) above shall be deemed
to be a "Non-Qualifying Transaction"); or
(iv) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company;
or
(v) Fortis acquires any additional Company Common Stock
or Company Voting Securities without approval of the
Assurant, Inc. board of directors.
For purposes of determining whether a Change in Control has
occurred pursuant to Section 1(b)(iii), the assets of the
Company shall not include any assets that the Company is
required to maintain on its consolidated GAAP balance sheet
that are the subject of reinsurance ceded to third parties and
result in an approximate offsetting liability on such balance
sheet.
(c) "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained by the Company or if
applicable, most recently maintained, by the Company or if
applicable, an affiliate of the Company, for the Executive,
whether or not the Executive actually receives disability
benefits under such plan or policy. If no long-term disability
plan or policy was ever maintained on behalf of the Executive,
Disability means Permanent and Total Disability as defined in
Section 22(e)(3) of the Code. In the event of a dispute, the
determination whether the Executive is
- 3 -
Disabled will be made by the Board and may be supported by the
advice of a physician competent in the area to which such
Disability relates.
(d) "Fortis" means Fortis SA/NV, a public company established as a
societe anonyme/naamloze vennootschap under the laws of
Belgium, and Fortis N.V., a public company established as a
naamloze vennootschap under the laws of The Netherlands, and
their affiliates other than the Company and its Subsidiaries.
(e) "GAAP" means U.S. generally accepted accounting principles
consistently applied.
(f) "Multiplier" means the number set forth in the second
paragraph of this Agreement; provided however, that if the
Executive has, prior to the CIC Date, publicly announced his
or her Retirement or voluntary termination of employment, the
Multiplier will be a fraction with the numerator equal to the
remaining whole or partial months between the Date of
Termination of employment and the effective date of such
announced Retirement or voluntary termination of employment,
and with the denominator equal to 12, but in no event shall
such fraction be equal to a number greater than the number set
forth in the second paragraph of this Agreement.
(g) "Person" means any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
(h) "Retirement" means retirement as defined in the Company's
then-current tax qualified defined benefit pension plan, or if
there is no such retirement plan, Retirement means voluntary
termination of employment after age 55 with ten or more years
of service, or after age 65 with five or more years of
service.
(i) "Subsidiary" means any corporation, limited liability company,
partnership or other entity of which a majority of the
outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company.
(j) "1934 Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(k) Each of the following terms is defined in the Section
indicated:
Term Section
---- -------
Accounting Firm 8(b)
Accrued Obligations 4(a)(i)(A)(3)
Base Salary 4(a)(i)(A)(1)
- 4 -
Board 3rd Paragraph
Cause 3(b)
CIC Date 2
Code 3(d)
Company Common Stock 1(b)(ii)
Company Voting Securities 1(b)(ii)
Date of Termination 3(e)
Deferred Compensation 4(g)
Disability Effective Date 3(a)
Election Contest 1(b)(i)
Employer Affiliate 10(i)
Excise Tax 8(a)
Good Reason 3(c)
Gross-Up Payment 8(a)
Incumbent Directors 1(b)(i)
Non-Qualifying Transaction 1(b)(iii)
Notice of Termination 3(d)
Other Benefits 4(a)(iii)
Payment 8(a)
Post-CIC Period 2
Proxy Contest 1(b)(i)
Rabbi Trust 4(h)
Release 10(h)
Severance 4(a)(i)(B)
Surviving Corporation 1(b)(iii)
Target Bonus 4(a)(i)(A)(2)
Underpayment 8(b)
Welfare Benefits 4(a)(ii)
2. Post-CIC Period. If the Executive is employed by the Company
immediately prior to the first date during the Agreement Term on which
a Change in Control occurs (the "CIC Date"), then the Executive's
employment during the two-year period beginning on the CIC Date and
ending on the second anniversary of such date (the "Post-CIC Period")
shall be subject to all the terms and conditions of this Agreement,
including, without limitation, the termination events described in
Section 3 below.
3. Termination of Employment During Post-CIC Period.
(a) Death, Retirement or Disability. During the Post-CIC Period,
the Executive's employment shall terminate automatically upon
the Executive's death or Retirement. If the Company determines
in good faith that the Disability of the Executive has
occurred during the Post-CIC Period, the Company may, in its
discretion, give the Executive a written notice in accordance
with Section 10(b) of this Agreement of the Company's
intention to terminate the Executive's employment. In such
- 5 -
event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date").
(b) Cause. The Company may terminate the Executive's employment
during the Post-CIC Period with or without Cause. For purposes
of this Agreement, "Cause" means either of the following
circumstances:
(i) Failure to Perform. The willful and continued failure
of the Executive to perform substantially the
Executive's reasonably assigned duties with the
Company (other than any such failure resulting from
incapacity due to physical or mental illness or from
the assignment to the Executive of duties that would
constitute Good Reason under Section 3(c)), which
failure continues for a period of at least 30 days
after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief
Executive Officer of the Company. Such written demand
must specifically identify the manner in which the
Board or Chief Executive Officer believes that the
Executive has not substantially performed the
Executive's duties; provided, however, that no
failure to perform by the Executive after a Notice of
Termination is given to the Company by the Executive
shall constitute Cause for purposes of this
Agreement.
(ii) Engaging in Illegal Conduct or Gross Misconduct. The
willful engaging by the Executive in illegal conduct
or gross misconduct that is materially and
demonstrably injurious to the Company.
For purposes of this Section 3(b), no act or failure to act,
on the part of the Executive, shall be considered "willful"
unless it is done, or omitted to be done, by the Executive in
bad faith or without reasonable belief that the Executive's
action or omission was in the best interests of the Company.
Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the
instructions of a senior officer of the Company or based upon
the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive
in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the
entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is
provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board,
the Executive is guilty of the
- 6 -
conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason.
(i) The Executive's employment may be terminated by the
Executive during the Post-CIC Period for Good Reason
or for no reason. For purposes of this Agreement,
"Good Reason" means any of the following
circumstances:
(1) Diminution of Position. The assignment to
the Executive of any duties materially
inconsistent with the Executive's position
immediately prior to the CIC Date (including
status, offices, titles and reporting
requirements), authority, duties or
responsibilities, or any other action by the
Company which results in a material
diminution in such position, authority,
duties or responsibilities, excluding for
this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith
and which is remedied by the Company
promptly after receipt of notice thereof
given by the Executive.
(2) Reduction of Compensation. Any material
reduction in the aggregate value of the
Executive's annual base salary, short-term
cash bonus target amount, long-term
incentive plan target amount, and
Company-provided welfare benefits, all as in
effect immediately prior to the CIC Date, ,
or any failure by the Company to pay any
such amount to the Executive as earned by
the Executive. An inadvertent failure by the
Company to make any payment of compensation
to the Executive that does not occur in bad
faith and that is remedied by the Company
promptly after the Company receives notice
thereof from the Executive, is excluded from
the definition of "Good Reason."
(3) Employment Location. The Company or an
Affiliate requiring the Executive to be
based at any location that is more than
fifty (50) miles from the location at which
the Executive is based immediately prior to
the CIC Date.
(4) Other Termination. Any purported termination
by the Company of the Executive's employment
other than as expressly permitted by this
Agreement.
- 7 -
(5) Breach by the Company. Any material breach
by the Company of any provision of this
Agreement, including, without limitation,
Section 9(c).
Good Reason shall not include Executive's death or
Disability. Executive's continued employment shall
not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason
hereunder. For purposes of this Section 3(c), any
good faith determination of "Good Reason" made by
Executive shall be conclusive.
(ii) Notwithstanding the foregoing, "Good Reason" shall
not exist until after (1) the Executive has given the
Company written notice of the applicable event not
later than 30 days after the occurrence of such
event, specifying in reasonable detail the
circumstances of the event and stating the
Executive's intent to terminate his or her employment
if not remedied, and (2) the Company has not remedied
such event within 30 days after receipt of such
notice; provided, however, that if the specified
event reasonably cannot be remedied within such
30-day period, the Company commences reasonable steps
within such 30-day period to remedy such event and
diligently continues such steps thereafter until a
remedy is effected, and the remedy is effected within
60 days after the Company's receipt of the
Executive's notice, then such event shall not
constitute "Good Reason."
(iii) Notwithstanding the foregoing, "Good Reason" shall
not exist if the Executive is offered employment with
the Company or an affiliate thereof, or if the
Executive is offered employment with the Surviving
Corporation, and in either case such offer of
employment includes a position, compensation and
employment location that are consistent with the
requirements of subsections 3(c)(i)(1), (2) and (3).
(d) Notice of Termination. Any termination by the Company or by
the Executive must be communicated by Notice of Termination to
the other party, and must be given in accordance with Section
10(b) of this Agreement. For purposes of this Agreement, a
"Notice of Termination" means a written notice that:
(i) indicates the specific termination provision in this
Agreement relied upon, and
(ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide
a basis for termination of the Executive's employment
under the provision so indicated, and
- 8 -
(iii) if the Date of Termination is other than the date of
receipt of such notice, specifies the termination
date (which date shall be not more than 30 days after
the giving of such notice, except as provided in
Section 3(c)(ii) above).
If a dispute exists concerning the provisions of this
Agreement that apply to the Executive's termination of
employment, the parties shall pursue the resolution of such
dispute with reasonable diligence. Within five days of such a
resolution, any party owing any payments pursuant to the
provisions of this Agreement shall make all such payments
together with interest accrued thereon at the rate provided in
Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"). If the Executive or the Company fails to
set forth in a Notice of Termination any additional fact or
circumstance that contributes to a showing of Good Reason or
Cause, but otherwise delivers a Notice of Termination in
accordance with this Agreement, such party will not be
precluded from asserting the additional fact or circumstance
in enforcing such party's rights hereunder.
(e) Date of Termination. "Date of Termination" means whichever of
the following is applicable:
(i) If the Company terminates the Executive's employment
for Cause, the Date of Termination shall be the date
of receipt of the Notice of Termination or any later
date specified in such Notice.
(ii) If the Company terminates the Executive's employment
other than for Cause or Disability, the Date of
Termination shall be the date on which the Company
notifies the Executive of such termination or any
later date specified in such notice.
(iii) If the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall
be the date of death of the Executive or the
Disability Effective Date.
(iv) If the Executive terminates his or her employment for
Good Reason, the Date of Termination shall be in
accordance with Section 3(c)(ii) of this Agreement.
4. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause or Disability. If, during
the Post-CIC Period, the Company terminates the Executive's
employment other than for Cause or Disability, or the
Executive terminates his or her employment
- 9 -
for Good Reason, then in consideration of Executive's services
rendered prior to such termination all of the following shall
take place:
(i) Cash Payments.
A. Current Compensation. The Company shall pay
to the Executive in a lump sum in cash
within 30 days after the Date of Termination
the sum of:
(1) the Executive's annual base salary
as in effect immediately prior to
the CIC Date ("Base Salary")
through the Date of Termination to
the extent not theretofore paid,
(2) the product of (x) the Executive's
target annual bonus under the
Company's short-term incentive bonus
plan for the year in which the Date
of Termination occurs (the "Target
Bonus") and (y) a fraction, the
numerator of which is the number of
days in the current fiscal year of
the Division through the Date of
Termination, and the denominator of
which is 365, and
(3) any accrued vacation pay to the
extent not theretofore paid (the sum
of the amounts described in clauses
(1) and (2) immediately above and
this clause (3) shall be hereinafter
referred to as the "Accrued
Obligations").
X. Xxxxxxxxx. The Company shall pay to the
Executive an amount of cash severance (the
"Severance") in a lump sum within 30 days
after the Date of Termination equal to the
product of the Multiplier times the sum of
(1) the Executive's Base Salary and (2) the
Executive's Target Bonus.
(ii) Welfare Benefits. For 18 months after the
Date of Termination, the Company shall
continue to provide the same medical,
dental, life and/or disability insurance
coverages to the Executive and/or the
Executive's dependents that the Company or
the Surviving Corporation, as the case may
be, provides generally during such 18-month
period to its employees who hold positions
similar to the position held by the
Executive immediately prior to the Date of
Termination (the "Welfare Benefits"). For
those Welfare Benefits to which COBRA
applies, the
- 10 -
Company will only be obligated to provide
such Welfare Benefits through the
Executive's making the elections permitted
under COBRA. In order to receive the Welfare
Benefits, the Executive shall pay the same
amount therefor that he or she paid for such
Welfare Benefits immediately prior to the
Termination Date, and the Executive must
make these elections and pay all required
premiums on a timely basis. If the Executive
becomes employed with another employer,
including, without limitation, the Surviving
Corporation, and
(A) the Executive is eligible to
receive medical or dental insurance
coverages under another employer
provided plan, then the medical and
dental insurance coverages provided
by the Company pursuant to this
subsection 4(a)(i) shall be
secondary to the medical and dental
insurance coverages, respectively,
provided under such other plan to
the Executive and/or the
Executive's dependents during such
applicable period of eligibility;
and/or
(B) the Executive is eligible to
receive life or disability
insurance coverages under another
employer provided plan, then the
Company shall have no further
obligation to provide the Executive
and/or the Executive's dependents
with life or disability insurance
coverage.
The Company shall not be required to compensate the
Executive for any taxes that the Executive may incur
as a result of the provision of Welfare Benefits
hereunder. If the Executive has prior to the CIC Date
publicly announced his or her Retirement or voluntary
termination of employment, the Executive will receive
the Welfare Benefits under this subsection 4(a)(ii)
only to the effective date of such announced
Retirement or voluntary termination of employment.
(iii) Other Benefits Due at Date of Termination. To the
extent not then already paid or provided, the Company
shall timely pay or provide to the Executive any
other amounts or benefits required to be paid or
provided through the Date of Termination, or which
the Executive is eligible to receive through and
after the Date of Termination, under any plan,
program, policy or practice of, or contract or
agreement with, the Company and its affiliated
companies, including such plans that have change in
control
- 11 -
provisions in the plans (such other amounts and
benefits shall be hereinafter referred to as the
"Other Benefits"); provided, however, that in no
event shall the Executive be entitled to any benefits
under any severance plan made available to other
Company employees, it being the intent of the parties
that the benefits to the Executive under this
Agreement will be in lieu of any such other severance
plan.
(b) Death. If the Executive's employment is terminated by reason
of the Executive's death during the Post-CIC Period, this
Agreement shall terminate without further obligations to the
Executive's legal representatives, other than for payment of
Accrued Obligations and Deferred Compensation, and the timely
payment or provision of Other Benefits. The Company shall pay
all Accrued Obligations to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within 30
days of the Date of Termination, and shall pay all Deferred
Compensation to the Executive's estate or beneficiary, as
applicable, in accordance with the terms of the plan under
which such compensation was deferred.
(c) Retirement. If the Executive's employment is terminated by
reason of the Executive's Retirement during the Post-CIC
Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of
Accrued Obligations and Deferred Compensation, and the timely
payment or provision of Other Benefits. The Company shall pay
all Accrued Obligations to the Executive in a lump sum in cash
within 30 days of the Date of Termination, and shall pay all
Deferred Compensation to the Executive in accordance with the
terms of the plan under which such compensation was deferred.
(d) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Post-CIC
Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of
Accrued Obligations and Deferred Compensation, and the timely
payment or provision of Other Benefits. The Company shall pay
all Accrued Obligations to the Executive in a lump sum in cash
within 30 days of the Date of Termination, and shall pay all
Deferred Compensation to the Executive in accordance with the
terms of the plan under which such compensation was deferred.
(e) Cause; Other than for Good Reason. If the Company terminates
the Executive's employment for Cause during the Post-CIC
Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay
to the Executive (x) his or her Base Salary through the Date
of Termination, (y) any Deferred Compensation, and (z) Other
Benefits, in each case to the extent not then already paid. If
the
- 12 -
Executive voluntarily terminates employment during the
Post-CIC Period (excluding a termination for Good Reason),
this Agreement shall terminate without further obligations to
the Executive, other than for Accrued Obligations, Deferred
Compensation and the timely payment or provision of Other
Benefits. In either case described in this Section 4(e), the
Company shall pay all Accrued Obligations to the Executive in
a lump sum in cash within 30 days of the Date of Termination,
and shall pay all Deferred Compensation to the Executive in
accordance with the terms of the plan under which such
compensation was deferred.
(f) Outplacement Services. For a period not to exceed the number
of months equal to one-half of the Multiplier, the Executive
shall have the right to make full use of the Company's
outplacement services to its officers upon termination of the
Executive's employment, except in the event that the
Executive's employment is terminated for Cause.
(g) Deferred Compensation. Any compensation previously deferred by
the Executive ("Deferred Compensation") shall be paid to the
Executive in accordance with the terms of the plan under which
it was deferred.
(h) Funding of Certain Obligations. Not later than the CIC Date,
regardless of whether the Executive's employment has then
terminated or any termination of such employment has then been
announced, the Company shall take all actions necessary or
appropriate to establish and fund a "rabbi" trust (i.e., a
trust based on the model trust contained in Revenue Procedure
92-64, and with a trustee selected by the Company, but that is
independent of the Company) (hereafter the "Rabbi Trust") for
the purpose of ensuring that the Executive will receive the
Severance in accordance with the terms of this Agreement. The
Rabbi Trust shall expressly provide that after the CIC Date
occurs, the Rabbi Trust may be amended or revoked only with
the prior written consent of the Executive. Without limiting
the generality of the foregoing, on or before the CIC Date,
the Company will deposit in the Rabbi Trust an amount of cash
equal to the amount of the Severance to which the Executive
would be entitled if his or her employment terminated on the
CIC Date; provided, however, that if such amount deposited in
the Rabbi Trust together with any interest or earnings thereon
is determined later to be less than or more than the amount of
the Severance, if any, that actually becomes due to the
Executive hereunder, the Executive shall be entitled to the
amount required by this Agreement and not the amount that is
held in such trust. In the event that the Executive does not
become entitled to the Severance, as determined by the trustee
of the Rabbi Trust, the amount remaining in the Rabbi Trust
shall be returned to the Company after the expiration of the
Post-CIC Period. The Rabbi Trust shall be used solely for the
purpose of holding deposits of funds for the potential
Severance obligations to the
- 13 -
Executive hereunder, and other similar obligations to
similarly situated employees of the Company.
5. Termination in Anticipation of a Change in Control. If (1) a Change in
Control occurs during the Agreement Term, AND (2) within one year prior
to the CIC Date the Executive's employment with the Company has been
terminated either by the Company without Cause or by the Executive for
Good Reason, then if the Executive can reasonably demonstrate that such
termination of employment (i) was at the request of or with the express
prior consent of a third party who has taken steps reasonably
calculated to effect such Change in Control or (ii) otherwise arose in
anticipation of such Change in Control, then all of the following shall
take place:
(a) Section 2 of this Agreement shall not apply to the Executive;
Section 4 of this Agreement shall apply to the Executive as
described in subsection (b) below; and all other provisions of
this Agreement shall apply to the Executive in accordance with
their terms.
(b) The Company shall pay to the Executive the aggregate of all
amounts described in Sections 4(a)(i) and 4(a)(iii) in a lump
sum in cash within 30 days after the CIC Date, using as the
Executive's Base Salary and Target Bonus his or her annual
base salary and target short-term incentive bonus,
respectively, as in effect immediately prior to the Date of
Termination. The Company shall pay any Deferred Compensation
to the Executive in accordance with the terms of the plan
under which such compensation was deferred.
(c) The Company shall provide to the Executive the Welfare
Benefits as and for the time period described in Section
4(a)(ii), except that the Company shall reimburse the
Executive for the cost of obtaining such Welfare Benefits
between the Date of Termination and the CIC Date by paying to
the Executive a lump sum in cash equal to the amount that the
Executive paid to obtain such Welfare Benefits for such period
less the amount that the Executive was paying to obtain such
Welfare Benefits immediately prior to the Date of Termination.
If the Executive has, prior to the CIC Date, publicly
announced his or her Retirement or voluntary termination of
employment, the Executive will receive the Welfare Benefits
under this subsection 5(c) only to the effective date of such
announced Retirement or voluntary termination of employment.
6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor,
except as explicitly provided herein, shall anything in this Agreement
limit or otherwise affect such rights as the Executive may have under
any contract or agreement with the Company or any of its
- 14 -
affiliated companies. Amounts that are vested benefits or that the
Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or
any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
7. No Company Set-Off; Legal Fees; Interest. Except as provided in Section
10(h), and except in the event that the Executive's employment is
terminated for Cause, the Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action that the Company
may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement. The Company agrees to
pay as incurred, to the full extent permitted by law, all legal fees
and expenses that the Executive may reasonably incur in good faith as a
result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement),
provided such contest occurs after the CIC Date, plus in each case
interest on any delayed payment at the applicable federal rate provided
for in Section 7872(f)(2)(A) of the Code.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined
that any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any
additional payments required under this Section 8) (a
"Payment") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
- 15 -
(b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including whether
and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by a certified
public accounting firm selected by the Executive and
reasonably acceptable to the Company (the "Accounting Firm")
which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days of the
receipt of notice from the Executive that there has been a
Payment, or such earlier time as is reasonably requested by
the Company. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 8, shall be paid by the
Company to the Executive within 14 days after the receipt of
the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to
Section 8(c) and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and
any such Underpayment shall be promptly paid by the Company to
or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would
require the payment by the Company of a Gross-Up Payment (or
an additional Gross-Up Payment). Such notification shall be
given as soon as practicable but no later than ten business
days after the Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including, without
limitation, accepting legal representation with
- 16 -
respect to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and
expenses. Without limitation of the foregoing provisions of
this Section 8(c), the Company shall control all proceedings
taken in connection with such contest (to the extent
applicable to the Excise Tax and the Gross-Up Payment) and, at
its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax
claimed and xxx for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such
claim and xxx for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free
basis and shall indemnify and hold the Executive harmless, on
an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that
any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 8(c), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of Section 8(c)) promptly pay to the Company the
amount of such refund (together with
- 17 -
any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 8(c), a
determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does
not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(e) Based on events occurring after the Change in Control, it may
be necessary or appropriate to redetermine the amount of an
excess parachute payment for a prior taxable year. Any such
redetermination, including the assumptions to be used, shall
be made by the Accounting Firm, which shall provide detailed
supporting calculations both to the Company and the Executive
within 15 business days after the receipt of notice from
either party of changed circumstances that indicate that a
redetermination may be necessary. Any redetermination by the
Accounting Firm shall be binding upon the Company and the
Executive. If such redetermination results in the availability
of a refund from the Internal Revenue Service of amounts
previously paid, the Executive shall promptly prepare and file
any necessary tax return amendment or request for such refund.
Upon receipt of such refund from the Internal Revenue Service,
the Executive shall promptly pay such refund to the Company
along with any Gross-Up Payments previously paid by the
Company which related to the refunded amount, as determined by
the Accounting Firm. The Company shall pay all fees and
expenses of the Accounting Firm, and the Company shall
reimburse the Executive for all reasonable fees and expenses
incurred in preparing and filing any tax return amendment or
request for tax refund necessitated by the redetermination.
9. Successors.
(a) This Agreement is personal to the Executive and arises from
his or her current title, employment responsibilities and
managerial reporting relationship. Without the prior written
consent of the Company, this Agreement shall not be assignable
by the Executive other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of, be
enforceable by and be binding upon the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of, be enforceable
by and be binding upon the Company and its successors and
assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of
- 18 -
the business and/or assets of the Company to assume expressly
and agree to 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 had taken place.
10. Miscellaneous.
(a) Governing Law; Captions; Amendments. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified other than by a
written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) Notices. All notices and other communications made pursuant to
this Agreement must be in writing and must be given by hand
delivery, or by certified mail, return receipt requested, or
by overnight courier, or by telecopy with a confirmation copy
sent by either overnight courier or first-class mail, and
addressed as follows:
If to the Executive:
Xxxxxx Xxxxxxxxx
_____________________
_____________________
If to the Company:
Assurant, Inc.
One Chase Xxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
or to such other address as either party shall have furnished
to the other in writing in accordance with this Section.
Notice and communications shall be effective when actually
received by the addressee.
(c) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) Withholding. The Company may withhold from any amounts payable
under this Agreement such federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
- 19 -
(e) Waiver. The failure of either party to insist upon strict
compliance with any provision of this Agreement, or the
failure of either party to assert any right such party may
have under this Agreement shall not be deemed to be a waiver
of such provision or right or any other provision or right of
this Agreement.
(f) "At Will" Employment; Termination of Agreement.
(i) The Executive and the Company acknowledge that,
except as may otherwise be provided under any other
written agreement between the Executive and the
Company and to the extent otherwise permitted under
applicable law, the employment of the Executive by
the Company is "at will" and the Executive's
employment may be terminated by either the Executive
or the Company at any time prior to the CIC Date. If
the Executive's employment is terminated for any
reason before the CIC Date, the Executive shall have
no further rights under this Agreement, except as
provided in Section 5.
(ii) Unless the Executive's employment is terminated, this
Agreement may not be terminated by the Company during
the Agreement Term and before the CIC Date. From and
after the CIC Date, this Agreement may not be
terminated by the Company. This Agreement shall
supersede any other agreement between the parties
with respect to the subject matter hereof.
(g) Nondisclosure. Without obtaining the Company's prior written
consent, the Executive agrees that he or she will not disclose
the existence or the terms of this Agreement to any Person,
except for the Executive's advisors, beneficiaries and other
Persons that need to know about the Agreement. The Executive
agrees that no Person associated with the Company falls within
such exception that would permit disclosure by the Executive.
(h) Release. As a condition to the Company's obligation to pay the
Severance pursuant to Section 4(a)(i)(B) above, the Executive
must execute and deliver to the Company a release in
substantially the form of EXHIBIT A hereto.
(i) Employer Affiliate. Notwithstanding any indication in this
Agreement that the Executive is employed directly by the
Company, the parties acknowledge and agree that, on the date
of this Agreement, the Executive is employed directly either
by the Company or by an affiliate of the Company (the
"Employer Affiliate"). The parties further agree that the
provisions of this Agreement that provide for the Company to
have rights
- 20 -
or obligations or to take actions with respect to the
Executive's employment shall be interpreted to mean that
either the Company or the Employer Affiliate shall have such
rights and obligations and may take such actions. The Company
shall have the discretion to determine whether it or the
Employer Affiliate shall exercise such rights, fulfill such
obligations and take such actions, and, if the Company
determines that an obligation will be fulfilled by the
Employer Affiliate, the Company agrees to cause the Employer
Affiliate to fulfill such obligations as if the Employer
Affiliate were a party to this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf by its
undersigned officer thereunto, duly authorized, all as of the day and year first
above written.
ASSURANT, INC.
By: /s/ J. Xxxxx Xxxxxxx
_______________________________________
J. Xxxxx Xxxxxxx
President and CEO
EXECUTIVE
/s/ Xxxxxx Xxxxxxxxx
___________________________________________
Xxxxxx Xxxxxxxxx
- 21 -
EXHIBIT A
Form of Release
This Release (this "Release") is granted effective as of the ______ day
of ___________________, ______, by ________________________ (the "Executive") in
favor of Assurant, Inc. (the "Company"). This is the Release referred to in that
certain Change in Control Severance Agreement dated as of ________, 200___ by
and between the Company and the Executive (the "CIC Agreement"). The Executive
gives this Release in consideration of the Company's promises and covenants as
recited in the CIC Agreement, with respect to which this Release is an integral
part.
1. Release of the Company. The Executive, for [himself] [herself],
[his] [her] successors, assigns, attorneys, and all those entitled to assert
[his] [her] rights, now and forever hereby releases and discharges the Company
and its respective officers, directors, stockholders, trustees, employees,
agents, parent corporations, subsidiaries, affiliates, estates, successors,
assigns and attorneys (the "Released Parties"), from any and all claims,
actions, causes of action, sums of money due, suits, debts, liens, covenants,
contracts, obligations, costs, expenses, damages, judgments, agreements,
promises, demands, claims for attorney's fees and costs, or liabilities
whatsoever, in law or in equity, which the Executive ever had or now has against
the Released Parties, including any claims arising by reason of or in any way
connected with any employment relationship which existed between the Company or
any of its parents, subsidiaries, affiliates, or predecessors, and the
Executive. It is understood and agreed that this Release is intended to cover
all actions, causes of action, claims or demands for any damage, loss or injury,
which may be traced either directly or indirectly to the aforesaid employment
relationship, or the termination of that relationship, that the Executive has,
had or purports to have, from the beginning of time to the date of this Release,
whether known or unknown, that now exists, no matter how remotely they may be
related to the aforesaid employment relationship including but not limited to
claims for employment discrimination under federal or state law, except as
provided in Paragraph 2; claims arising under Title VII of the Civil Rights Act,
42 U.S.C. Section 2000(e), et seq. or the Americans With Disabilities Act, 42
U.S.C. Section 12101 et seq.; claims for statutory or common law wrongful
discharge, including any claims arising under the Fair Labor Standards Act, 29
U.S.C. Section 201 et seq.; claims for attorney's fees, expenses and costs;
claims for defamation; claims for wages or vacation pay; claims for benefits,
including any claims arising under the Employee Retirement Income Security Act,
29 U.S.C. Section 1001, et seq.; and provided, however, that nothing herein
shall release the Company of its obligations to the Executive under the CIC
Agreement or any other contractual obligations between the Company or its
affiliates and the Executive, or any indemnification obligations to Executive
under the Company's bylaws, certificate of incorporation, New York law or
otherwise.
2. Release of Claims Under Age Discrimination in Employment Act.
Without limiting the generality of the foregoing, the Executive agrees that by
executing this Release, [he] [she] has released and waived any and all claims
[he] [she] has or may
have as of the date of this Release for age discrimination under the Age
Discrimination in Employment Act, 29 U.S.C. Section 621, et seq. It is
understood that the Executive is advised to consult with an attorney prior to
executing this Release; that the Executive in fact has consulted a
knowledgeable, competent attorney regarding this Release; that the Executive
may, before executing this Release, consider this Release for a period of
twenty-one (21) calendar days; and that the consideration the Executive receives
for this Release is in addition to amounts to which the Executive was already
entitled. It is further understood that this Release is not effective until
seven (7) calendar days after the execution of this Release and that the
Executive may revoke this Release within seven (7) calendar days from the date
of execution hereof.
The Executive agrees that [he] [she] has carefully read this Release
and is signing it voluntarily. The Executive acknowledges that [he] [she] has
had twenty one (21) days from receipt of this Release to review it prior to
signing or that, if the Executive is signing this Release prior to the
expiration of such 21-day period, the Executive is waiving [his] [her] right to
review the Release for such full 21-day period prior to signing it. The
Executive has the right to revoke this release within seven (7) days following
the date of its execution by [him] [her]. However, if the Executive revokes this
Release within such seven (7) day period, no severance benefit will be payable
to the Executive under the CIC Agreement and the Executive shall return to the
Company any such payment received prior to that date.
THE EXECUTIVE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT
CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE
COMPANY UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. THE EXECUTIVE
ACKNOWLEDGES THAT [HE] [SHE] HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN
ATTORNEY OR OTHER ADVISOR OF THE EXECUTIVE'S CHOOSING CONCERNING [HIS] [HER]
EXECUTION OF THIS RELEASE AND THAT [HE] [SHE] IS SIGNING THIS RELEASE
VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM ALL SUCH
CLAIMS.
______________________________________
Executive
Date: ________________________________
- 23 -
