CONSULTING AGREEMENT AND RESIGNATION
Exhibit 99.1
CONSULTING AGREEMENT AND RESIGNATION
This Consulting Agreement (the “Agreement”) is made and entered into as of November 17, 2006
(the “Effective Date”) by and between HCC Insurance Holdings, Inc. (“HCC” or the “Company”) and
Xxxxxxx X. Way (“Executive”).
The Executive is the Chief Executive Officer and Chairman of the Board of Directors of the
Company. The Executive and the Company are parties to the following agreements:
| a. | Amended and Restated Employment Agreement, dated as of November 10, 2004 (the “Amended Employment Agreement”), amending and restating January 1, 2003 Employment Agreement, as supplemented by Employment Agreement addendum dated as of December 31, 2003 (including any and all consulting agreement provisions or contingencies contained in the Amended Employment Agreement);1 | ||
| b. | Indemnification Agreement, dated as of December 14, 1995 (the “Indemnification Agreement”), which the parties agree to be a valid, binding and enforceable agreement between them and the provisions of which are not waived, modified or otherwise impaired by this Agreement in any respect;2 | ||
| c. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1995 Flexible Incentive Plan (the “6/20/95 Grant”); | ||
| d. | 5/2 Stock Split Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1995 Flexible Incentive Plan (the “12/13/95 Grant”); | ||
| e. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1995 Flexible Incentive Plan (the “4/30/96 Grant”); | ||
| f. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1997 Flexible Incentive Plan (the “1997 Grant”); | ||
| g. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1995 Flexible Incentive Plan (the “1/2/97 Grant”); | ||
| h. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1997 Flexible Incentive Plan (the “1/7/98 Grant”); | ||
| i. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1997 Flexible Incentive Plan (the “Second 1/7/98 Grant”); |
| 1 | The Amended Employment Agreement is attached as Exhibit A. | |
| 2 | The Indemnification Agreement is attached as Exhibit B. |
| j. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1997 Flexible Incentive Plan (the “12/31/98 Grant”); | ||
| k. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1997 Flexible Incentive Plan (the “2/12/99 Grant”); | ||
| l. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1995 Flexible Incentive Plan (the “First 1/5/00 Grant”); | ||
| m. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1997 Flexible Incentive Plan (the “Second 1/5/00 Grant”); | ||
| n. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 1997 Flexible Incentive Plan (the “Third 1/5/00 Grant”); | ||
| o. | Incentive Stock Option Agreement Under the HCC Insurance Holdings, Inc. 2001 Flexible Incentive Plan (the “First 7/22/02 Grant”); | ||
| p. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 2001 Flexible Incentive Plan (the “Second 7/22/02 Grant”); and | ||
| q. | Non-Qualified Stock Option Agreement Under the HCC Insurance Holdings, Inc. 2004 Flexible Incentive Plan (the “7/22/05 Grant” and, together with the 6/20/95 Grant, the 12/13/95 Grant, the 4/30/96 Grant, the 1997 Grant, the 1/2/97 Grant, the 1/7/98 Grant, the Second 1/7/98 Grant, the 12/31/98 Grant, the 2/12/99 Grant, the First 1/5/00 Grant, the Second 1/5/00 Grant, the Third 1/5/00 Grant, the First 7/22/02 Grant and the Second 7/22/02 Grant, the “1995-2005 Grants”). | ||
| r. | Under the Stock Option Agreements listed above in Agreement Recital paragraphs c.-q., the Company has granted options to purchase shares of the Company’s common stock (“Common Stock”) in favor of Executive. Each of the “1995-2005 Grants” and a description of the options that Executive has exercised thereunder, what rights to purchase shares pursuant to fully vested options exist, and what options have not yet vested, are described in the attached Exhibit C to the Agreement. Exhibit C is incorporated in this Agreement by reference. |
The parties agree that Executive’s employment as CEO with the Company is terminated as of the
Effective Date and Company desires to avail itself of the experience, sources of information,
advice and assistance available to or possessed by Executive and to, in turn, have Executive
undertake certain consultant duties fully described below in this Agreement and to continue to
serve as the Chairman of the Board of the Company’s Board of Directors. Notwithstanding the
provisions of the Amended and Restated Employment Agreement, Executive shall not be entitled to any
salary, other form of compensation perquisites or other benefits after the Effective Date except as
specifically provided for herein.
The Executive desires to enter into this Agreement to provide additional services as an
independent contractor consultant, subject to the terms and conditions of this Agreement. In
addition, Executive shall continue to serve as Chairman of the Board of the Company’s Board of
Directors.
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The parties agree that the Agreement recitals are true and accurate, and that Executive does
not occupy any offices or have rights to acquire, directly or indirectly, any Common Stock or
options to purchase Common Stock of HCC, except as set forth in the Agreement Recitals and as
modified by this Agreement.
1. Termination of Other Agreements. As of the Effective Date of this Agreement, the Amended
Employment Agreement between Executive and the Company listed in Agreement Recital paragraph a. is
cancelled and terminated and will be of no further force or effect. The Indemnity Agreement listed
in Agreement Recital paragraph b. shall remain a binding and enforceable agreement between the
parties. Therefore, Executive agrees and acknowledges that except as specifically provided herein,
any rights he may have to any payments, benefits, or other perquisites of any kind whatsoever under
the terminated agreements listed in Agreement Recital paragraph a. including, without limitation,
compensation, bonus payments, salary, stock options, stock option gains, use of or ownership
interest in company automobiles, use of or ownership interest in company airplanes, country club
memberships, disability insurance, life insurance, health, dental or vision insurance, or any other
insurance benefits, vacation and sick pay, and travel, First Class airfare, and car allowances, are
extinguished by this Agreement and Executive’s right to any claim or cause of action whatsoever to
reimbursement, payments, benefits, or other perquisites under these terminated agreements are
released and forever waived. Notwithstanding the foregoing, Executive shall be entitled promptly
to payment of (a) all accrued compensation through the Effective Date (excluding any discretionary
bonus payment that might have been accrued on the books of the Company) and (b) all un-reimbursed
expenses incurred through the Effective Date.
2. Vesting of Stock Options, Effect on Grants and Right of Offset. The parties agree that
Executive will have no right to accelerated vesting of options to purchase Common Stock (or other
securities) that have not yet fully vested, as described in the Grants listed in Exhibit C attached
to this Agreement. As of the Effective Date, Executive agrees that he forfeits all rights to, and
interest in, any unvested stock options and such options shall be canceled and terminated on the
Effective Date. Concerning the right to purchase shares that have fully vested, but have not been
exercised, Executive understands and agrees that all vested options not exercised within thirty
(30) days of the Effective Date shall be forfeited and shall be canceled and terminated. Based on
the Company’s determination of the accurate grant date, Executive understands and acknowledges that
the actual exercise price may differ from the exercise price set forth in his stock option or other
agreements. Executive agrees that the Company’s determination of the actual grant date and
resulting exercise price for the 1995-2005 Grants shall be the price used to determine any gains or
profits from Executive’s exercise of vested options thereunder, and that his exercise price will be
determined after taking into account the Company’s determination of the actual grant date and
resulting exercise price. The Executive further acknowledges and agrees that the Company shall be
entitled to offset any amounts owed to him by the Company under this Agreement or otherwise against
the amount of any gains,
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profits or other amounts which Executive may be entitled to based on any difference in stock
option grant dates or exercise prices, as determined by the Company in its sole discretion, arising
from stock options issued under the 1995-2005 Grants.
3. Resignation as CEO. The Executive hereby resigns all positions as an officer and employee
of the Company, including his CEO position, effective as of the Effective Date. Likewise,
Executive hereby resigns all positions as an employee, director, representative or agent of all
Company subsidiaries, whether direct or indirect, and Company affiliates effective as of the
Effective Date. The Executive will remain and does not resign his position as a Director on the
Company’s Board of Directors (the “Board”).
4. Reimbursement of Gain or Profit. Regarding options that Executive has already exercised
under the 1995-2005 Grants at any time, Executive agrees to reimburse the Company for all gains or
profit he received or obtained resulting from any difference between the exercise price at which
Executive exercised any option and the exercise price on the accurate grant date as determined by
the Company with the concurrence of its independent auditors. After the Company determines, with
the concurrence of its independent auditors, the accurate grant date, and, therefore, the accurate
stock option exercise price and the amount of such gain or profit from the exercise of his options,
under the 1995-2005 Grants, the Company shall provide to Executive a written notice of such
determinations (together with any additional information regarding such determinations as Executive
reasonably requests) and Executive will make a lump sum payment to the Company for the amount of
any such gain or profit (less any offset by the Company pursuant to the last sentence of paragraph
2) to the Company within thirty (30) days after receiving such written notice and information (if
any).
5. HCC Releasees. The “HCC Releasees” are defined as HCC Insurance Holdings, Inc., each of
HCC’s subsidiaries whether wholly owned or not and whether direct or indirect and each of HCC and
its subsidiaries predecessors, successors, parents, joint ventures, holding companies,
subsidiaries, divisions, affiliates, assigns, partnerships, agents, directors, officers, employees,
consultants, committees, employee benefit committees, fiduciaries, representatives, attorneys, and
all persons and entities acting by, through, under or in concert or in any such capacity with any
of them. Under this Agreement, Executive is excluded from the definition of “HCC Releasee”.
6. Global Release of Claims. Executive, on behalf of himself, his heirs, executors,
successors and assigns, irrevocably and unconditionally releases, waives, and forever discharges
the HCC Releasees from any and all claims, demands, actions, causes of action, costs, fees,
attorneys’ fees, and all liability whatsoever, whether known or unknown, fixed or contingent, which
Executive has, had, or may have against any of the HCC Releasees including, without limitation, the
agreements he executed with HCC as referenced in Agreement Recital paragraphs (a)-(t), and his acts
or omissions that resulted in Executive’s separation from employment with HCC, from the beginning
of time and up to and including the date of execution of this Agreement. This Agreement includes,
without limitation, claims at law or equity or sounding in contract (express or implied) or tort,
claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex,
race, national origin, color, disability, religion, veteran, military status, sexual orientation,
or any other form of discrimination, harassment, or retaliation (including, without limitation, the
Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with
Disabilities Act, Title VII of the 1964 Civil Rights
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Act, the Civil Rights Act of 1991, 42 U.S.C. § 1981, the Rehabilitation Act, the Family and
Medical Leave Act, the Xxxxxxxx-Xxxxx Act, the Employee Polygraph Protection Act, the Financial
Institutions Reform, Recovery and Enforcement Act (or any other employment-related banking statute
or regulation), the Uniformed Services Employment and Reemployment Rights Act of 1994, the Texas
Commission on Human Rights Act, any federal, state, local or municipal whistleblower protection or
anti-retaliation statute or ordinance, or any other federal, state, local, or municipal laws of any
jurisdiction), claims arising under the Employee Retirement Income Security Act, or any other
statutory or common law claims related to Executive’s employment or separation from employment with
HCC, the agreements he executed with HCC as referenced in Recital paragraphs (a)-(t), and his acts
or omissions that resulted in Executive’s separation from employment with HCC. Notwithstanding the
foregoing, the provisions of this paragraph 6 shall not apply to the Indemnification Agreement, the
HCC Nonqualified Deferred Compensation Plan for Xxxxxxx X. Way dated December 31, 2003 (the “2003
Plan”), or the Houston Casualty Company Nonqualified Deferred Compensation Plan for Way dated
December 18, 1995 or this Agreement.
7. No Admission of Liability/Confidentiality of Release. Executive understands and agrees
that this Agreement shall not in any way be construed as an admission by the HCC Releasees of any
unlawful or wrongful acts whatsoever against Executive or any other person, and the HCC Releasees
specifically disclaim any liability to or wrongful acts against Executive or any other person.
Similarly, the Company acknowledges and agrees that this Agreement shall not in any way be
construed as an admission by Executive of any unlawful or wrongful act by Executive and Executive
specifically disclaims any liability to or wrongful acts against the Company or any other person.
Executive agrees to keep this Agreement and any of its terms completely confidential; however,
Executive may disclose the terms of this Agreement to his attorneys, accountant, spouse, or as
otherwise required by law. Accordingly, nothing in this Paragraph 7 is intended to preclude
Executive or HCC from disclosing information in response to a subpoena issued by a court of law or
a government agency having jurisdiction or power to compel the disclosure or as otherwise may be
required by law. Executive, however, agrees, as required by Agreement paragraph 10, to provide HCC
prompt written notice before responding to any subpoena. Further, Executive acknowledges and
agrees that nothing in this Agreement prevents HCC from disclosing the terms of this Agreement and
filing a copy of this Agreement (i) in response to a subpoena issued by a court of law or a
government agency having jurisdiction or power to compel the disclosure, (ii) in response to a
request by a governmental law enforcement agency or federal or state agency giving jurisdiction
over the acts or activities of HCC or any of its subsidiaries, or (iii) as HCC believes is
reasonably required by applicable federal or state law, including without limitation, the
provisions, rules or regulations of the Securities Exchange Act of 1934 , as amended.
8. No Re-Employment. The Executive agrees that he relinquishes any right to re-employment
with the Company. The Executive acknowledges that if he re-applies for or seeks employment with
the Company, the Company’s refusal to hire him based on this provision will provide a complete
defense to any claims arising from his attempt to apply for employment.
9. Non-Disparagement. Executive agrees, for a period of two (2) years after the Effective
Date, not to, directly or indirectly, disclose, communicate, or publish any intentionally
disparaging, negative, harmful, or disapproving information, written communications, oral
communications, electronic or magnetic communications, writings, oral or written statements,
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comments, opinions, facts, or remarks, of any kind or nature whatsoever (collectively,
“Disparaging Information”), concerning or related to any of the HCC Releasees. Executive
understands and acknowledges that this non-disparagement clause prevents him from disclosing,
communicating, or publishing, directly or indirectly, any Disparaging Information concerning or
related to the HCC Releasees including, without limitation, information regarding the HCC Releasees
businesses, customers or clients, proprietary or technical information, documents, operations,
inventions, trade secrets, product ideas, technical information, know-how, processes, plans
(including, without limitation, marketing plans and strategies), specifications, designs, methods
of operation, techniques, technology, formulas, software, improvements, internal or external
audits, internal controls, or any financial, marketing or accounting information of any nature
whatsoever. Further, Executive acknowledges that in executing this Agreement, he has knowingly,
voluntarily, and intelligently waived any free speech, free association, free press or First
Amendment to the United States Constitution (including, without limitation, any counterpart or
similar provision or right under the Texas Constitution or any other state constitution which may
be deemed to apply) rights to disclose, communicate, or publish Disparaging Information concerning
or related to the HCC Releasees. Executive also understands and agrees that he has had a
reasonable period of time to consider this non-disparagement clause, to review the
non-disparagement clause with his attorney, and to consent to this clause and its terms knowingly
and voluntarily. Executive further acknowledges that this non-disparagement clause is a material
term of this Agreement. If Executive breaches this Agreement paragraph 9, HCC will not be limited
to a damages remedy, but may seek all other equitable and legal relief including, without
limitation, a temporary restraining order, temporary injunctive relief, a permanent injunction, and
its attorneys’ fees and costs, against him and any other persons, individuals, corporations,
businesses, groups, partnerships or other entities acting by, through, under, or in concert with
him. Nothing in this Agreement shall, however, be deemed to prevent Executive from testifying
fully and truthfully in response to a subpoena from any court or from responding to investigative
inquiry from any governmental agency.
10. Cooperation. After his separation from employment from HCC, Executive agrees to cooperate
with HCC in connection with the defense or prosecution of any claims, causes of action,
investigations, hearings, proceedings, arbitrations or other tribunals now in existence or which
may be brought in the future against or on behalf of HCC that relate to events or occurrences that
transpired while he was employed with HCC. Executive’s cooperation in connection with this
paragraph 10 shall include, without limitation, making himself reasonably available to meet with
counsel to prepare for discovery or trial, to act as a witness on behalf of HCC at convenient
times, and to provide true and accurate testimony regarding any such matters. If Executive is
subpoenaed or contacted to cooperate in any manner by a non-governmental party concerning any
matter related to HCC, he shall immediately notify HCC, through the notice procedures identified in
this Agreement before responding or cooperating. The Executive shall be entitled to reimbursement
of all expenses incurred in conjunction with his cooperation pursuant to this paragraph 10,
including reasonable attorneys fees approved in writing by the Company prior to their incurrence
and expenses.
11. Confidentiality of Company Information. The Executive shall continue to abide by HCC’s
confidentiality policies, including those imposed on him by virtue of his consulting relationship
with the Company. The Executive will not at any time disclose to anyone, including, without
limitation, any person, firm, corporation, or other entity, or publish, or use for any purpose, any
Confidential Information, except as HCC directs and authorizes, or
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pursuant and subject to his obligations as a Director of HCC. The Executive shall take all
reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the
“Confidential Information” and agrees to immediately notify HCC in the event of any unauthorized
use or disclosure of the Confidential Information. Confidential Information includes, without
limitation, all of HCC’s technical and business information, which is of a confidential, trade
secret or proprietary character; lists of customers; identity of customers; identity of prospective
customers; contract terms; bidding information and strategies; pricing methods or information;
photographs; internal policies, procedures, communications and reports; computer software; computer
software methods and documentation; graphic designs; hardware; HCC’s methods of operation; the
procedures, forms and techniques used in servicing accounts; and other information or documents
that HCC requires to be maintained in confidence for HCC’s continued business success or any other
information defined as “Confidential Information” in the Amended Employment Agreement.
Confidential Information does not include any information that is readily available to the public
or, upon reasonable investigation, is readily ascertainable in the public domain.
12. Agreement to Return Company Property/Documents. Executive understands and agrees that his
last day of active work at any HCC office or on any HCC owned or leased property was on the
Effective Date. The Executive will not take with him, copy, alter, destroy, or delete any files,
documents, electronically stored information, or other materials whether or not embodying or
recording any Confidential Information, including copies, without obtaining in advance the written
consent of an authorized HCC representative. The Executive will promptly return to HCC all
Confidential Information, documents, files, electronically stored information, records and tapes
(written or electronically stored) regarding HCC that are in his possession or control, and he will
not use or disclose such materials in any way or in any format, including written information in
any form, information stored by electronic means, and any and all copies of these materials. Upon
or before the execution of this Agreement, Executive will return to HCC all HCC property,
including, without limitation, company automobiles, keys, equipment, computer(s) and computer
equipment, devices, cellular phones, other telephonic equipment, HCC credit cards, data, lists,
information, correspondence, notes, memos, reports, or other writings prepared by HCC or himself on
behalf of HCC. If Executive so elects, Executive may alternatively notify HCC that he elects to
purchase any such HCC property in his possession, and HCC will sell such HCC property to Executive
at its fair market value as determined by HCC. The Company shall assign to Executive any term life
insurance policies on Executive’s life owned by the Company upon payment by Executive of any paid
premium therefor.
13. Knowing and Voluntary Agreement. The Executive understands it is his choice whether or
not to enter into this Agreement and that his decision to do so is voluntary and is made knowingly.
The Executive acknowledges that he has been advised by HCC to seek legal counsel to review this
Agreement.
14. Time to Consider Agreement. The Executive acknowledges that he has been advised in writing
by the Company that he should consult an attorney before executing this Agreement, and he further
acknowledges that he has been given a period of twenty-one (21) calendar days within which to
review and consider the Agreement provisions. The Executive understands that if he does not sign
this Agreement before the twenty-one (21) calendar day period expires, this Agreement will be
withdrawn automatically.
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15. Revocation Period. The Executive understands and acknowledges that he has seven (7)
calendar days following the execution of this Agreement to revoke his acceptance of this Agreement.
This Agreement will not become effective or enforceable, and the first consulting payment
referenced in paragraph 20 of this Agreement will not become due, until after this revocation
period has expired without Executive’s revocation. If Executive does not revoke this Agreement
within the revocation period, the Company will comply with paragraphs 20 and 21 of this Agreement
concerning his consultant pay and benefits.
16. Effect of this Agreement on Directorship. This Agreement has no effect on Executive’s
position as Chairman of the Board of the Company’s Board of Directors. The Executive, however,
acknowledges and agrees that nothing in his continued service as a Director shall affect his
obligations to the Company and the HCC Releasees under this Agreement. If Executive, in his
continued service as Chairman of the Board, cannot comply with his obligations under this Agreement
for whatever reason, Executive agrees to immediately resign from his position as Chairman of the
Board and fully comply with all terms and obligations of this Agreement. Nothing in this Agreement
or otherwise shall require the Company to nominate Executive to the Board at any future time nor
require the Company to retain Executive as a Director or Chairman of the Board of Directors for any
length of time.
17. Right to Customary Director Benefits. The Executive, in his continued service as the
Chairman of the Board, shall be entitled to the payments customarily provided to Directors of the
Company.
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Agreement, any employment relationship, trust, partnership or joint venture between Executive
and the Company or any of its affiliates or, except as specifically provided in this Agreement, to
make them legal representatives or agents of each other or to create any fiduciary relationship or
additional contractual relationship among them.
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paragraph 25. If requested by the Company, Executive will obtain from any third party to whom
he discloses any Confidential Information the written agreement (in form and substance satisfactory
to the Company in its sole discretion) of such third party to keep such information confidential.
The Executive agrees to continue to abide by HCC policies regarding confidentiality and paragraph
11 of this Agreement.
(i) Non-Solicitation. The Executive agrees that during (A) the Term of the Agreement
and (B) for a one-year period following the Term of the Agreement (the “Post-Consulting Period”
and, together with the Term, the “Restricted Period”) will not, directly or indirectly, either
individually or as a principal, partner, agent, consultant, contractor, employee, or as a director
or officer of any corporation or association, or in any other manner or capacity whatsoever, except
on behalf of the Company, solicit business, or attempt to solicit business, in products or services
competitive with products or services sold by the Company, from any customer or client, or
prospective customer or client, with whom Executive had contact or solicited during the (24) months
that immediately proceeded the execution of this Agreement or during the Term of the Agreement.
(ii) Non-Competition. The Executive also agrees that during the Restricted Period,
Executive will not within any of the markets in which the Company performs services or has
formulated a plan to sell its services, without the prior written consent of the Company, engage in
or contribute his knowledge to any employment, work, business, or endeavor which is competitive
with a product, process, service, or development of the Company or with respect to which Executive
had access to the Company’s Confidential Information, provided, however, that nothing herein shall
prohibit Executive from being a passive owner of not more than 2% of the outstanding stock of any
class of a corporation which is publicly traded. During the Post-Consulting Period of the
Restricted Period, the Executive may request in writing exceptions to this restriction which shall
be deemed approved by the Company if the Company has not provided written disapproval within
forty-five (45) days of its receipt of such request.
(iii) Non-Recruitment. The Executive also agrees that during the Restricted Period,
he will not, directly or indirectly, hire, solicit, induce, recruit, engage, go into business with,
encourage to leave their employment or contractor relationship with the Company, or otherwise cease
their employment or contractor relationship with the Company, or otherwise contract for services
with, any employee or contractor of the Company.
(iv) Nature of the Restrictions. The Executive agrees that the time, geographical
area, and scope of restrained activities for the restrictions in paragraph 28 of this Agreement are
reasonable, especially in light of the Company’s desire to protect its Confidential Information.
If a court concludes that any time period, geographical area, or scope of restrained activities
specified in paragraph 28 of this Agreement is unenforceable, the court is vested with the
authority to reduce the time period, geographical area, and/or scope of restrained activities, so
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that the restrictions may be enforced to the fullest extent permitted by law.
Additionally, if Executive violates any of the restrictions contained in this paragraph 26, the
Restricted Period shall be suspended and will not run in favor of the Executive from the time of
the commencement of any such violation until the time when the Executive cures the violation to the
Company’s satisfaction.
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Agreement is terminated for Cause, the Company’s obligation to pay Consultant Consideration
not earned, as of the date of the event giving rise to the Cause termination, shall end
immediately. Moreover, Executive agrees to forfeit the right to any unpaid Consultant
Consideration owed by the Company at the time of his termination for Cause. If this Agreement is
terminated by the Company without Cause, or if Executive terminates this Agreement for Good Reason,
then the Company shall promptly pay Executive the balance of the Consultant Consideration for the
then current Term.
(i) Notices. Any notice or other communication required, permitted or desired to be given
under this Agreement shall be deemed delivered when personally delivered; the business day, if
delivered by overnight courier; the same day, if transmitted by facsimile on a business day before
noon, Central Standard Time; the next business day, if otherwise transmitted by facsimile; and the
third business day after mailing, if mailed by prepaid certified mail, return receipt requested, as
addressed or transmitted as follows (as applicable):
If to Executive:
Xxxxxxx X. Way
000 Xxxxxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Xxxxxxx X. Way
000 Xxxxxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxx X. Xxxxx
Xxxxxxxx & Xxxxxxxx, LLP
000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Xxxxxxxx & Xxxxxxxx, LLP
000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
If to the Company:
HCC Insurance Holdings, Inc
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
Fax: (000) 000-0000
00000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: President
Fax: (000) 000-0000
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With a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxxx
Xxxxxx and Xxxxx, LLP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Xxxxxx X. Xxxxxx
Xxxxxx and Xxxxx, LLP
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
(ii) Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS
(RULES) THEREOF. THE EXCLUSIVE VENUE FOR ALL SUITS AND PROCEEDINGS ARISING FROM OR RELATED TO THIS
AGREEMENT SHALL BE IN A COURT OF COMPETENT JURISDICTION IN HOUSTON, TEXAS.
(iii) Limitations on Assignment. Except as provided in this Agreement, Executive may not
assign this Agreement or any of the rights or obligations set forth in this Agreement without the
explicit written consent of HCC. Any attempted assignment by Executive in violation of this
paragraph 31(iii) shall be void. Except as provided in this Agreement, nothing in this Agreement
entitles any person, other than the parties to the Agreement, to any claim, cause of action,
remedy, or right of any kind, including, without limitation, the right of continued employment.
(iv) Waiver. A party’s waiver of any breach or violation of any Agreement provisions shall
not operate as, or be construed to be, a waiver of any later breach of the same or other Agreement
provision.
(v) Severability. If any provision or provisions of this Agreement are held to be invalid,
illegal, or unenforceable for any reason whatsoever, (a) the validity, legality, and
unenforceability of the remaining provisions of this Agreement (including, without limitation, all
portions of any Agreement paragraphs containing any provision held to be invalid, illegal, or
unenforceable, that are not themselves invalid, illegal, or unenforceable), will not in any way be
affected or impaired thereby, and (b) the provision or provisions held to be invalid, illegal, or
unenforceable will be limited or modified in its or their application to the minimum extent
necessary to avoid the invalidity, illegality, or unenforceability, and, as so limited or modified,
the provision or provisions and the balance of this Agreement will be enforceable in accordance
with their terms.
(vi) Headings. The Agreement headings are for reference purposes only and will not affect in
any way the meaning or interpretation of this Agreement.
(vii) Counterparts. This Agreement and amendments to it will be in writing and may be
executed in counterparts and by facsimile. Each counterpart will be deemed an original, but both
counterparts together will constitute one and the same instrument.
(viii) Entire Agreement, Amendment, Binding Effect. This Agreement constitutes the entire
agreement between the parties concerning the subject matter in this Agreement. No oral statements
or prior written material not specifically incorporated in this Agreement shall be of any force and
effect, and no changes in or additions to this Agreement shall be recognized,
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unless incorporated in this Agreement by written amendment, such
amendment to become effective on the date stipulated in it. The Executive acknowledges and
represents that in executing this Agreement, he did not rely, and has not relied, on any
communications, promises, statements, inducements, or representation(s), oral or written, by HCC or
any HCC Releasee, except as expressly contained in this Agreement. Any amendment to this Agreement
must be signed by all parties to this Agreement. This Agreement will be binding on and inure to
the benefit of the parties hereto and their respective successors, heirs, legal representatives,
and permitted assigns (if any). This Agreement supersedes (a) any prior agreements between
Executive and HCC concerning the subject matter of this Agreement, and (b) all other agreements
between Executive and HCC, as explained in Agreement paragraph 1, unless specifically modified by
this Agreement. Unless otherwise specified in this Agreement, HCC and Executive agree that to the
extent the terms of this Agreement conflict with any terms of the Amended Employment Agreement, the
terms of this Agreement shall supersede and govern the terms of the Amended Employment Agreement.
(ix) Arbitration. If any dispute arises out of or is related to this Agreement or Executive’s
employment or separation from employment with HCC for any reason, and the parties to this Agreement
cannot resolve the dispute, the dispute shall be submitted to final and binding arbitration. The
arbitration shall be conducted in accordance with the American Arbitration Association’s (“AAA”)
National Rules for the Resolution of Employment Disputes (“Rules”). If the parties cannot agree to
an arbitrator, an arbitrator will be selected through the AAA’s standard procedures and Rules. HCC
and Executive shall share the costs of arbitration, unless the arbitrator rules otherwise, with the
parties agreeing that if Executive challenges this arbitration provision based on the allocation of
costs between the parties, then the arbitrator shall decide the proper allocation of costs. HCC
and Executive agree that the arbitration shall be held in Houston, Texas. Arbitration of the
parties’ disputes is mandatory, and in lieu of all civil causes of action or lawsuits either party
may have against the other arising out of the Agreement or Executive’s employment or separation
from employment with HCC, with the exception that HCC alone may seek a temporary restraining order
and temporary injunctive relief in a court to enforce the terms of this Agreement. Executive
acknowledges that by agreeing to this provision, he knowingly and voluntarily waives any right he
may have to a jury trial based on any claims he has, had, or may have against HCC, including any
right to a jury trial under any local, municipal, state or federal law including, without
limitation, claims under Title VII of the Civil Rights Act of 1964, the Americans With Disabilities
Act of 1990, the Age Discrimination In Employment Act of 1967, the Older Workers Benefit Protection
Act, the Texas Commission on Human Rights Act, claims of harassment, discrimination or wrongful
termination, and any other statutory or common law claims.
(x) Injunctive Relief. The Executive acknowledges and agrees that the covenants, obligations
and agreements of the Executive contained in this Agreement concern special, unique and
extraordinary matters and that a violation of any of the terms of these covenants, obligations or
agreements will cause HCC irreparable injury for which adequate remedies at law are not available.
Therefore, the Executive agrees that HCC alone will be entitled to an injunction, restraining
order, or all other equitable relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain the Executive from committing any
violation of the covenants, obligations or agreements referred to in this Agreement before
submitting this matter to binding arbitration. These injunctive remedies are cumulative and in
addition to any other rights and remedies HCC may have against the
14
Executive. HCC and the Executive irrevocably submit to the exclusive
jurisdiction of the state courts and federal courts in the city of HCC’s headquarters (Houston,
Texas) regarding the injunctive remedies set forth in this paragraph and the interpretation and
enforcement of this paragraph 31 (x) solely insofar as the interpretation and enforcement relate to
an application for injunctive relief in accordance with the Agreement provisions. Further, the
parties irrevocably agree that (a) the sole and exclusive appropriate venue for any suit or
proceeding relating to injunctive relief shall be in the courts listed in this paragraph (x), (b)
all claims with respect to any application for injunctive relief shall be heard and determined
exclusively in these courts, (c) these courts will have exclusive jurisdiction over the parties to
this Agreement and over the subject matter of any dispute relating to an application for injunctive
relief, and (d) each party waives all objections and defenses based on service of process, forum,
venue, or personal or subject matter jurisdiction, as these defenses may relate to an application
for injunctive relief in a suit or proceeding under the provisions of this paragraph (x).
(xi) Standstill. The Executive agrees that for a period of twelve (12) months he will not
sell more than 25% of his holdings in the Company’s Common Stock, without the consent of the Board.
(xii) 409A Compliance. In light of the uncertainty surrounding the proper application of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the parties hereto
agree to cooperate to make mutually agreed upon amendments to this Agreement (including, without
limitation, to the timing of any severance payments), that do not otherwise change the substance of
the terms of this Agreement, to minimize or avoid the imposition of any penalties and additional
taxes under Section 409A. Notwithstanding the foregoing, if the parties cannot agree to such
amendments, the terms and conditions of the Agreement shall remain in full force and effect.
Further, the Company shall amend the 2003 Plan such that distributions from such plan shall not be
includable in Executive’s income under section 409A(a)(1) of the Code.
As evidenced by my signature below, I certify that I have read the above Agreement and agree
to its terms.
| HCC Insurance Holdings, Inc. | ||
/s/ Xxxxxxx X. Way
|
/s/ J. Xxxxxx Xxxxxxxxx | |
Xxxxxxx X. Way
|
J. Xxxxxx Xxxxxxxxx, Director | |
November 17, 2006
|
November 17, 2006 |
15
Exhibit A
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into
effective as of the 10th day of November, 2004 (the “Effective Date”), between HCC INSURANCE
HOLDINGS, INC. (“HCC” or “Company”) and XXXXXXX X. WAY (“Executive”), sometimes collectively
referred to herein as the “Parties.”
1. Termination of 2000 Contract and Term. Effective as of January 1, 2003, the 2000
Contract shall be cancelled, terminated and of no further force or effect. The Company hereby
agrees to employ Executive as its Chief Executive Officer and Executive Chairman of the Board, and
Executive hereby agrees to accept such employment, on the terms and conditions set forth herein,
for the period commencing on the January 1,2003 and expiring as of 11:59 p.m. on December 31,2007
(unless sooner terminated or unless renewed as hereinafter set forth).
Unless Executive or the Company has given written notice of termination at least 120 days
before the end of any calendar year, at the end of each year of the term and any extension
thereof, this Agreement shall be extended automatically and without any further action on the part
of any party for an additional one year so that unless so terminated, Executive shall always have
a five-year term remaining on this Agreement. As used herein the “Term” shall mean the initial
five-year term and any subsequent renewal or renewals thereof. In addition, at Executive’s sole
election, at any time during the Term, Executive shall have the right to terminate his position as
CEO, but continue
as Executive Chairman of the Board, provided, in such event the Term of this Agreement
shall continue for a period of five (5) years from the date Executive no longer serves as CEO,
with no right to further extensions.
2. Duties.
(a) Duties as Employee of the Company. Executive shall, subject to the
supervision of the Board of Directors, have general management and control of HCC in the
ordinary
course of its business with all such powers with respect to such management and control as may
be
reasonably incident to such responsibilities. During normal business hours, Executive shall
devote
substantially all of his time and attention to diligently attending to the business of the
Company.
During the Term, and except as shall exist prior to the date of this Agreement, Executive
shall not
directly or indirectly render any services of a business, commercial, or professional nature
to any
other person, firm, corporation, or organization, whether for compensation or otherwise,
without the
prior consent of the Board of Directors of HCC. However, Executive shall have the right to
engage
in such activities as may be appropriate in order to manage his personal investments so long
as such
activities do not interfere or conflict with the performance of his duties to the Company
hereunder.
The conduct of such activity shall not be deemed to materially interfere or conflict with
Executive’s
performance of his duties until Executive has been notified in writing thereof and given a
reasonable
period in which to cure same.
(b) Other Duties. At all times during the Term, the Company
shall use its best
efforts to cause Executive to be elected a director and to serve as Executive Chairman of the
Board of HCC. Any such failure to use its best efforts prior to a Change of Control shall be a
material breach of this Agreement for purposes of Section (4)(a)(iv). Executive agrees to serve
as a director and member of HCC and of any of its subsidiaries and in one or more executive
offices of any of HCC’s subsidiaries, provided Executive is indemnified for serving in any and
all such capacities in a manner acceptable to the Company and Executive. Executive agrees that
while a full time employee he shall not be entitled to receive any compensation for serving as a
director of HCC, or in any capacities of HCC’s subsidiaries other than the compensation to be
paid to Executive by the Company pursuant to this Agreement. If Executive is not a full time
employee, he shall be compensated as an outside director.
3. Compensation and Related Matters.
(a) Base Salary and Deferred Compensation
(1) Executive shall receive a base salary (the “Base Salary”) paid by the
Company at the annual rate of $800,000, during the period beginning on the Effective Date and
for
each year of the Term, payable not less frequently than in substantially equal monthly
installments
(or such other more frequent times as executives of HCC normally are paid).
(2) In addition to the Base Salary, Executive shall receive deferred
compensation (the “Deferred Compensation”) of $400,000 or such greater amount as is approved
by
the Compensation Committee in its discretion for each calendar year or portion thereof of the
Term.
Deferred Compensation under this Agreement shall be accrued under one or more of the
Company’s deferred compensation plans as determined from time to time by the Compensation Committee
of the Board of Directors of the Company (the “Compensation Committee”). Notwithstanding anything
herein to the contrary, such accruals of Deferred Compensation shall be subject to and shall be
governed by the terms of the plan under which accrued (including, without limitation, plan terms
regarding the crediting of income and the timing of distributions). Deferred Compensation accruals
for a year shall be credited on December 31 of the year, unless an earlier date is specified by
the Compensation Committee.
(3) If Executive elects to terminate his position as CEO but remain as
Executive Chairman of the Board, the Base Salary set forth in (i) above shall be reduced from
$800,000 to $500,000 per annum (and all other terms of this Agreement shall continue to apply).
(b)
Bonus Payments. During the Term, Executive shall be entitled to receive, in
addition to the Base Salary, an annual cash bonus payment in amounts to be determined at the
sole
discretion of the Compensation Committee.
(c)
Expenses. During the Term of this Agreement and the Consulting Period,
defined hereunder, Executive shall be entitled to receive prompt reimbursement for all
reasonable
expenses incurred by him (in accordance with the policies and procedures established by the
Board
for the Company’s senior executive officers) in performing services hereunder, provided that
Executive properly accounts therefor in accordance with Company policy. In addition, the
Company
shall reimburse Executive pursuant to the arrangement in effect as of the date of this
Agreement for
all use of the Executive’s aircraft during the Term and the Consulting Period.
(d) Other Benefits. Executive shall be entitled to participate in or receive benefits under
any compensation employee benefit plan or other arrangement made available by the Company now or
in the future to its senior executive officers and key management employees, subject to and on a
basis consistent with the terms, conditions, and overall administration of such plan or
arrangement. Nothing paid to Executive under any plan or arrangement presently in effect or made
available in the future shall be deemed to be in lieu of the Base Salary or Defined Compensation
payable to Executive pursuant to subsection (a) of this Section. The Company shall not make any
changes in any employee benefit plans or other arrangements in effect on the date hereof or
subsequently in effect in which Executive currently or in the future participates (including,
without limitation, each pension and retirement plan, supplemental pension and retirement plan,
savings and profit sharing plan, stock or unit ownership plan, stock or unit purchase plan, stock
or unit option plan, life insurance plan, medical insurance plan, disability plan, dental plan,
health and accident plan, or any other similar plan or arrangement) that would adversely affect
Executive’s rights or benefits thereunder, unless such change occurs pursuant to a program
applicable to substantially all executives of the Company and does not result in a proportionately
greater reduction in the rights of or benefits to Executive as compared with any other executive
of the Company.
(e)
Vacations. Executive shall be entitled to forty (40) paid vacation days per year
during the Term, or such additional number as may be determined by the Board from time to time.
There shall be indefinite carryovers of unused vacation from year to year. For purposes of this
Section, weekends shall not count as vacation days, and Executive shall also be entitled
to all paid holidays given by the Company to its senior executive officers.
(f)
Perquisites.
(1) Executive shall be entitled to receive the perquisites and fringe benefits
applicable to a senior executive officer of HCC in accordance with any practice established
by the
Compensation Committee. Notwithstanding, and in addition to, any perquisites to which
Executive
is entitled pursuant to the preceding sentence, Executive shall: (i) have the use of two
company
vehicles similar to those Executive has been provided prior to the date of this Agreement
and the Company shall pay all expenses related to Executive’s use of such automobiles,
including gasoline, insurance, and maintenance. At the beginning of each calendar year of the
Term and the Consulting Period, HCC shall replace the older vehicle (or if both are the same
age—one of such vehicles) with a new vehicle: Executive shall receive ownership to both such
vehicles upon termination of this Agreement; (ii) be allowed to travel with his spouse on
business utilizing First Class passage under the Company’s corporate account, as Executive
determines; (iii) receive reimbursement of annual country club dues for Executive’s
membership in Lochinvar Country Club, Shadow Hawk Country. Club plus one additional country
club to be determined by Executive. In addition, Executive shall have the right to change
membership in any such club and to obtain membership to any other club (at Company’s sole
cost) so long as Company is not required to hold membership in, or pay dues for, more than
three (3) such country clubs at any one time. Following termination of this Agreement,
Executive shall be bonused such ownership; (iv) receive all existing life insurance plus an
additional
term or life policy in an amount equal to $5,000,000. Upon-termination of Executive’s
position as Executive Chairman., all such life insurance shall be converted to ordinary life
insurance to be owned by Executive or Executive’s designee; (v) be entitled to utilize an
office at the Company’s
executive offices or, at Executive’s election, to be reimbursed for the utilization of an office
at Executive’s home; (vi) be entitled to utilize the services of Company employees and contract
employees at an aggregate annual wage cost, including bonuses of $600,000 (which shall be added
to Executive’s taxable income) during the Term and the Consulting Period (applicable payroll
taxes and the cost of employee fringe benefits, including medical and dental insurance,
retirement plans including 401k plans and any stock based compensation expense, including stock
options or restricted shares shall be in addition to the $600,000 wage limitation; (vii) have the
right to utilize during the Term and the Consulting Period at no cost to Executive, the use of
the Company’s airplanes or to be reimbursed for the use of the Executive’s aircraft (subject to
being taxed on the basis of the appropriate IRS regulations for transportation for personal use)
and the pilots and engineers employed by the Company pursuant to the contractual arrangement in
existence as of the Effective Date hereof; (viii) be entitled to be reimbursed for all methods of
communications used by Executive (including, without limitation, the installation cost and use of
software, telephone, facsimile machines, etc., other similar equipment, and all upgrades thereof)
in Executive’s house, aircraft and boat which shall continue through the Term and the Consulting
Period and (ix) be entitled to incidental miscellaneous expenditures not to exceed $10,000 per
year for postage, delivery, stationery and other personal items at the Executive’s discretion.
(2) In addition to all other benefits provided for in this Agreement,
Executive shall be entitled to receive medical insurance as currently provided under the
Company’s
group program, as such may be changed from time to time in the future, and Executive shall
be entitled to continue to be covered by such group program, or, if not permitted under the terms
of the group program, then the Company shall provide Executive with a medical insurance policy
providing substantially similar benefits as to the group program for the period ending on the later
of: (i) the date of Executive’s death; (ii) if Executive is married on the date of his death, the
date of the death of Executive’s spouse; or (iii)-as to each minor dependent of Executive, the
later of the date that each such dependent reaches the age of twenty-five or completes college (as
defined in the Company’s group program). Executive shall be entitled to receive the medical
benefits defined herein at no cost to the Executive.
(3) The Corripany shall pay for Executive’s preparation of estate planning and wealth
preservation documents during the course of this Agreement with the Company. Such estate planning
and wealth preservation documents may be changed from time to time, at the Company’s cost and
expense, pursuant to Executive’s changing circumstances.
(4) During Executive’s employment he has been instrumental in designing
and utilizing the Company’s Logo, Executive shall, during the Term of this Agreement be
entitled to
utilize such Logo in such manner as Executive may determine and, in the event of a Change of
Control, as defined below, such Logo shall belong exclusively to Executive.
(g)
Proration. Any payments or benefits payable to Executive hereunder in respect of any
calendar year during which Executive is employed by the Company for less than the entire year,
unless otherwise provided in the applicable plan or arrangement or herein, shall be prorated in
accordance with the number of days in such calendar year during which
he is so employed. Notwithstanding the foregoing, any payments pursuant to Sections 4(c) or 4(d) of this Agreement
shall not be subject to proration.
4. Termination.
(a)
Definitions.
(1)
“Cause” shall mean:
(i) Material dishonesty which is not the result of an inadvertent or innocent
mistake of Executive with respect to the Company or any of its subsidiaries;
(ii) Willful misfeasance or nonfeasance of duty by Executive intended to
injure or having the effect of injuring in some material fashion the reputation,
business, or business relationships of the Company or any of its subsidiaries or
any of their respective officers, directors, or employees;
(iii) Material violation by Executive of any material term of this Agreement;
or
(iv) Conviction of Executive of any felony, any crime involving moral
turpitude or any crime other than a vehicular offense which could reflect in some
material fashion unfavorably upon the Company or any of its subsidiaries.
Executive may not be terminated for Cause unless and until there has been delivered to Executive
written notice from the Board supplying the particulars of Executive’s acts or omissions that the
Board believes constitute Cause, a reasonable period of time (not less than 30 days) has been
given to Executive after such notice to either cure the same or to meet with the Board, with his
attorney if so desired by Executive, and following which the Board by action of not less than
two-thirds of its members furnishes to Executive a written resolution specifying in detail its
findings that Executive has been terminated for Cause as of the date set forth in the notice to
Executive.
(2) A
“Change of Control” shall be deemed to have occurred if:
(i) Any “person” or “group” (within the meaning of Sections 13 (d)
and 14(d)(2) of the Securities Exchange Act of 1934) other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934), directly or indirectly, of 50% or more of the Company’s then outstanding
voting common stock; or
(ii) At any time during the period of three (3) consecutive years (not
including any period prior to the date hereof), individuals who at the beginning
of such period constituted the Board (and any new director whose
election by the
Board or whose nomination for election by .the Company’s shareholders were
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority thereof; or
(iii) The shareholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation (a) in
which a majority of the directors of the surviving entity were directors of the
Company prior to such consolidation or merger, and (b) which would result in the
voting securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being changed into voting
securities of the surviving entity) more than 50% of the combined voting power of
the voting securities of the surviving entity outstanding immediately after such
merger or consolidation; or
(iv) The shareholders approve a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.
(3) A “Disability” shall mean the absence of Executive from Executive’s
duties with the Company on a full-time basis for 180 consecutive days, or 180 days in a
365-day
period, as a result of incapacity due to mental or physical illness which results in the
Executive being
unable to perform the essential functions of his position, with or without reasonable
accommodation.
(4) A “Good Reason” shall mean any of the following (without
Executive’s express written consent):
(i)
A material alteration in the nature or status of Executive’s title, duties
or responsibilities, or the assignment of duties or responsibilities inconsistent with
Executive’s status, title, duties and responsibilities;
(ii) A failure by the Company to continue in effect any employee benefit plan
in which Executive was participating, or the taking of any action by the Company
that would adversely affect Executive’s participation in, or materially reduce
Executive’s benefits under, any such employee benefit plan, unless such failure or
such taking of any action adversely affects the senior members of corporate
management of the Company generally to the same extent;
(iii) A relocation of the Company’s principal executive offices, or
Executive’s relocation to any place other than the principal executive offices,
exceeding a distance of fifty (50) miles from the Company’s current executive office
located in Houston, Texas, except for reasonably required travel by Executive on the
Company’s business;
(iv) Any material breach by the Company of any provision of this Agreement; or
(v) Any failure by the Company to obtain the assumption and performance of
this Agreement by any successor (by merger, consolidation, or otherwise) or assign
of the Company.
However, Good Reason shall exist with respect to an above specified matter only if such matter is
not corrected by the Company within thirty (30) days of its receipt of written notice of such
matter from Executive, and in no event shall a termination by Executive occurring more than ninety
(90) days following the date of the event described above be a termination for Good Reason due to
such event.
(5) “Termination Date” shall mean the date Executive is terminated for
any reason pursuant to this Agreement.
(b) Termination Without Cause, or Termination For Good Reason: Benefits.
In the event there is a termination by the Company without Cause, or if Executive
terminates for Good Reason, or if there is a Change of Control (a “Termination Event”), this
Agreement shall
terminate except as provided in Section 6, and Executive shall be entitled to the following
severance benefits:
(1) Base Salary and Deferred Compensation (as defined in Section 3(a)),
at the rate and payable at Executive’s option (or the option of Executive’s estate) within
sixty (60) days in a lump sum payment or such longer period of time as Executive shall determine.
(2) To the extent not theretofore paid or provided, or otherwise set forth
herein, the Company shall timely pay or provide to Executive any other amounts or benefits
required
to be paid or provided or which Executive is eligible to receive under any plan, program,
policy or
practice, or contract or agreement of the Company and its affiliated companies for the period
of time
equal to the remainder of the Term, at its sole expense, and shall continue to provide
(through its
own plan and/or individual policies) Executive (and Executive’s dependents) with health
benefits no
less favorable than the group health plan benefits provided during such period to any senior
executive officer of the Company or any affiliated company (to the extent any such coverage or
benefits are taxable to Executive by reason of being provided, under a self-insured health
plan of the
Company or an affiliate, the Company shall make Executive “whole” for the same on an
after-tax
basis), provided, however, such coverage shall be secondary to any group health plan coverage
Executive (or his dependents) receive from another employer, (such other amounts and benefits
shall
be hereinafter referred to as the “Other Benefits”);
(3) If Executive receives any payments whether or not pursuant to this
Agreement which are subject to an excise tax imposed under Section 4999 of the Internal
Revenue
Code of 1986, as amended, or any similar tax imposed under federal, state, or local law
(collectively,
“Excise Taxes”), the Company shall pay to Executive (on or before the date on which the
Company
is required to withhold such Excise Taxes), 1) an additional amount equal to all Excise Taxes
then
due and payable, and 2) the amount necessary to defray Executive’s increased (federal, state,
and
local) tax liability arising due to payment of the amount specified in this Subsection (4)
which shall
include any costs and expenses, including penalties and interest incurred by Executive in
connection
with any audit, proceedings, etc. related to the payment of such Excise Taxes or this payment.
For
purposes of calculating the amount payable to Executive under this Section, the federal and
state
income tax rates used shall be the highest marginal federal and state rates applicable to
ordinary
income in Executive’s state of residence, taking into account any federal income tax
deductions or
credits available to Executive for state income taxes. The Company shall cause its
independent
auditors to calculate such amount and provide Executive a copy of such calculation at least
ten (10)
days prior to the date specified above for payment of such amount. It is the intent of the
Parties that
this Subsection (4) shall place Executive in the same net after-tax position Executive would
have
been in had no payment been subject to an Excise Tax and, notwithstanding anything to the
contrary,
it shall be construed to effectuate said result;
(4) All accrued compensation and unreimbursed expenses through the
Termination Date. Such amounts shall be paid to Executive in a lump sum in cash within thirty
(30)
days after the Termination Date; and
(5) Executive shall be free to accept other employment during such period,
and there shall be no offset of any employment compensation earned by Executive in
such other employment during such period against payments due Executive under this
Section 4, and there shall be no offset in any compensation received from such other
employment against the Base Salary set forth above.
(6) In addition to all amounts otherwise paid to Executive pursuant to this
Agreement, all amounts that Executive would otherwise have received during the
Consulting Period, including, without limitation, all perquisites, as set forth in
subsection 3(f).
(c) Termination
In Event of Death; Benefits. If Executive’s employment is
terminated by reason of Executive’s death during the Term of this Agreement, this
Agreement shall terminate except as provided in Section 6 without further obligation to
Executive’s legal representatives under this Agreement, other than for payment of all
compensation and unreimbursed expenses, as Executive would have been entitled to during
the remaining portion of the Term and the Consulting Period, the timely payment or
provision of Other Benefits through the date of death, and, if such death occurs on or
after October 1 of any year, such cash or stock bonus as Executive would otherwise have
been awarded in such year if Executive’s death had not occurred. Such amounts shall be
paid to Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
ninety (90) days after the date of death.
(d) Termination
In Event of Disability; Benefits. If Executive’s employment
is terminated by reason of Executive’s Disability, during the Term, except as provided
for in
Section 6, this Agreement shall terminate and Executive shall receive payment of
all compensation for the Term plus the Consulting Period, and if such Disability
occurs on or after October 1 of any year, Executive shall be entitled to the same cash
or stock bonus in such year that Executive would have been awarded if such Disability
had not occurred. Executive’s compensation shall not be reduced by any long-term
disability coverage Executive actually receives.
(e) Voluntary
Termination by Executive and Termination for Cause;
Benefits. Executive may terminate his employment with the Company without Good
Reason by giving written notice of his intent and stating an effective Termination Date at
least ninety (90) days after the date of such notice; provided, however, that the Company
may accelerate such effective date by paying Executive through the proposed Termination
Date and also vesting awards that would have vested but for this acceleration of the
proposed Termination Date. Upon such a termination by Executive, except as provided in
Section 6, or upon termination for Cause by the Company, this Agreement shall terminate,
and the Company shall pay to Executive all accrued compensation, unreimbursed expenses and
the Other Benefits through the Termination Date. Such amounts shall be paid to Executive
in a lump sum in cash within thirty (30) days after the date of termination.
(f) Director
Positions. Upon termination of employment or Termination of
Executive’s position of Executive Chairman, for any reason, Executive shall remain on any
and all Board positions held with the Company and/or any of its subsidiaries and
affiliates. At such time, Executive shall be paid as an outside director.
5. Non-Competition; Non-Solicitation and Confidentiality. At the inception of
this employment relationship, and continuing on an ongoing basis, the Company agrees to give
Executive access to Confidential Information (including, without limitation, Confidential
Information, as defined below, of the Company’s Affiliates) which the Executive has not had access
to or knowledge of before the execution of this Agreement. At the time this Agreement is made, the
Company agrees to provide Executive with initial and ongoing Specialized Training, which Executive
has not had access to or knowledge of before the execution of this Agreement. “Specialized
Training” includes the training the Company provides to its employees that is unique to its
business and enhances Executive’s ability to perform Executive’s job duties effectively.
Specialized Training includes, without limitation, orientation training; sales methods/techniques
training; operation methods training; and computer and systems training.
In consideration of all of the foregoing, Executive agrees as follows:
(a) Non-Competition During Employment. Executive agrees that, in
consideration for the Company’s promise to provide Executive with Confidential Information and
Specialized Training, during the Term he will not compete with the Company by engaging in the
conception, design, development, production, marketing, or servicing of any product or service
that is substantially similar to the products or services which the Company provides, and that he
will not work for, in any capacity, assist, or become affiliated with as an owner, partner, etc.
either directly or indirectly, any individual or business which offers or performs services, or
offers or provides products substantially similar to the services and products provided by
Company.
(b)
Conflicts of Interest. Executive agrees that during the Term, he will not engage,
either directly or indirectly, in any activity (a “Conflict of Interest”) which might adversely
affect the Company or its affiliates, including ownership of a material interest in any supplier,
contractor, distributor, subcontractor, customer or other entity with which the Company does
business or accepting any material payment, service, loan, gift, trip, entertainment, or other
favor from a supplier, contractor, distributor, subcontractor, customer or other entity with
which the Company does business, and that Executive will promptly inform the Chairman of the
Company as to each offer received by Executive to engage in any such activity. Executive further
agrees to disclose to the Company any other facts of which Executive becomes aware which might in
Executive’s good faith judgment reasonably be expected to involve or give rise to a Conflict of
Interest or potential Conflict of Interest.
(c) Non-Competition After Termination. Executive agrees that Executive shall not, at
any time during the period of two (2) years after the termination of the Term for any reason,
within any of the markets in which the Company has sold products or services or formulated a plan
to sell products or services into a market during the last twelve (12) months of Executive’s
employ; engage in or contribute Executive’s knowledge to any work which is competitive with or
similar to a product, process, apparatus, service, or development on which Executive worked or with
respect to which Executive had access to Confidential Information while employed by the Company;
provided, however, this subsection (c) shall not operate to prevent Executive from engaging in
retail insurance or re-insurance activities during such two-year period to the extent such
activities do not compete or permit any other person or entity to compete with any business the
Company or any of its
subsidiaries or affiliated companies were engaged in at the time of such termination.
Following the expiration of said two (2) year period, Executive shall continue to be obligated
under the Confidential Information Section of. this Agreement not to use or to disclose
Confidential Information of the Company so long as it shall not be publicly available. It is
understood that the geographical area set forth in this covenant is divisible so that if this
clause is invalid or unenforceable in an included geographic area, that area is severable and the
clause remains in effect for the remaining included geographic areas in which the clause is valid.
(d) Non-Solicitation
of Customers. Executive further agrees that for a period of
two (2) years after the termination of the Term, he will not solicit or accept any business from
any customer or client or prospective customer or client with whom Executive dealt or solicited
while employed by Company during the last twelve (12) months of his employment.
(e) Non-Solicitation
of Employees. Executive agrees that for the duration of
the Term, and for a period of two (2) years after the termination of the Term except for Xxxxx X.
Xxxxxxxx, L. Xxxxxx Xxxxxx, X. Xxxxx Way and Xxxxxxxx X. Xxxxxxxx, and Executive’s personal
service employees, he will not either directly or indirectly, on his own behalf or on behalf of
others, solicit, attempt to hire, or hire any person employed by Company to work for Executive or
for another entity, firm, corporation, or individual.
(f) Confidential
Information. Executive further agrees that he will not, except as the
Company may otherwise consent or direct in writing, reveal or disclose, sell, use, lecture, upon,
publish or otherwise disclose to any third party any Confidential Information or proprietary
information of the Company, or authorize anyone else to do these things at any time either during
or subsequent to his employment with the Company. This Section shall continue in full force and
effect after termination of Executive’s employment and after the termination of this Agreement.
Executive’s obligations under this Section with respect to any specific Confidential Information
and proprietary information shall cease when that specific portion of the Confidential Information
and proprietary information becomes publicly known, in its entirety and without combining portions
of such information obtained separately. It is understood that such Confidential Information and
proprietary information of the Company include matters that Executive conceives or develops, as
well as matters Executive learns from other employees of Company. Confidential Information is
defined to include information: (1) disclosed to or known by the Executive as a consequence of or
through his employment with the Company; (2) not generally known outside the Company; and (3) which
relates to any aspect of the Company or its business, finances, operation plans, budgets, research,
or strategic development. “Confidential Information” includes, but is not limited to the Company’s
trade secrets, proprietary information, financial documents, long range plans, customer lists,
employer compensation, marketing strategy, data bases, costing data, computer software developed by
the Company, investments made by the Company, and any information provided to the Company by a
third party under restrictions against disclosure or use by the Company or others.
(g) Return
of Documents, Equipment, Etc. All writings, records, and other documents
and things comprising, containing, describing, discussing, explaining, or evidencing any
Confidential Information, and all equipment, components, parts, tools, and the like in Executive’s
custody or possession that have been obtained or prepared in the course of Executive’s employment
with the Company shall be the exclusive property of the Company, shall not be copied
and/or removed from the premises of the Company, except in pursuit of the business of the
Company, and shall be delivered to the Company, without Executive retaining any copies,
upon notification of the termination of Executive’s employment or at any other time,
requested by the Company. The Company shall have the right to retain, access, and inspect
all property of Executive of any kind in the office, work area, and on the premises of
the Company upon termination of Executive’s employment and at any time during employment
by the Company to ensure compliance with the terms of this Agreement.
(h)
Reaffirm Obligations. Upon termination of his employment with the
Company, Executive, if requested by Company, shall reaffirm in writing Executive’s
recognition of the importance of maintaining the confidentiality of the Company’s
Confidential Information and proprietary information, and reaffirm any other obligations
set forth in this Agreement.
(i)
Prior Disclosure. Executive represents and warrants that he has not used or
disclosed any Confidential Information he may have obtained from Company prior to
signing this Agreement, in any way inconsistent with the provisions of this Agreement.
(j)
Confidential Information of Prior Companies. Executive will not disclose or use
during the period of his employment with the Company any proprietary or Confidential
Information or Copyright Works which Executive may have acquired because of employment
with an employer other than the Company or acquired from any other third party, whether
such information is in Executive’s memory or embodied in a writing or other physical
form.
(k)
Breach. Executive agrees that any breach of
Sections 5(a), (c), (d), (e), or (f)
above cannot be remedied solely by money damages, and that in addition to any other
remedies Company may have, Company is entitled to obtain injunctive relief against
Executive. Nothing herein, however, shall be construed as limiting Company’s right to
pursue any other available •remedy at law or in equity, including recovery of damages
and termination of this Agreement and/or any payments that may be due pursuant to this
Agreement.
(l) Right to Enter Agreement. Executive represents and covenants to Company
that he has full power and authority to enter into this Agreement and that the execution
of this Agreement will not breach or constitute a default of any other agreement or
contract to which he is a party or by which he is bound.
(m) Extension of Post-Employment Restrictions. In the event Executive
breaches Sections 5(b), (d), or (e) above, the restrictive time periods contained in
those provisions will be extended by the period of time Executive was in violation of
such provisions.
(n) Enforceability. The agreements contained in Section 5 are independent
of the other agreements contained herein. Accordingly, failure of the Company to comply
with any of its obligations outside of this Section do not excuse Executive from
complying with the agreements contained herein.
(o) Survivability. The agreements contained in Sections 5 shall survive the
termination of this Agreement for any reason.
6. Consulting Agreement. Effective upon Executive’s termination of employment
for any reason other than Executive’s termination by the Company for Cause, HCC hereby retains
Executive as a consultant (an independent contractor and not as an employee) for a period of five
(5) years (the “Consulting Period”). During the Consulting Period, Executive shall serve as
Non-Executive Chairman of the Board. Termination of the Term shall not effect the Parties’ rights
and obligations under this Section 6, subject to the following: Executive agrees to provide, if
requested, 1,000 hours of service (the “Consulting Services”) per year, as required by the Company.
Prior to a Change of Control, the Company shall use its best effort to cause Executive to continue
as a Director and Chairman of the Board during the term of the Consulting Period. HCC shall pay
Executive $450,000 per year of the Consulting Period, payable quarterly, in advance. Executive may
elect to delay payment for services, but not the services themselves. During such Consulting
Period, Executive shall receive, to the extent permitted by law and the terms of any existing plan,
all of the Company’s benefits as if Executive was a full time employee. In addition, the terms of
this Section 6 shall remain in full force and effect whether or not Executive dies or suffers a
Disability pursuant to the terms hereof during the Consulting Period. Further, if at any time
during the Term of this Agreement Executive shall elect, at his sole option, to cease being a full
time employee, then and in that event, Executive shall become a consultant pursuant to the terms of
this Section. During the Consulting Period, Executive shall have the right to the same benefits for
the same purposes and to the same extent as were in effect during the term of this Agreement,
provided, however, if Executive ceases to be the Executive Chairman, Executive shall no longer
receive Deferred Compensation. The Consulting Services to be provided shall be commensurate with
Executive’s training, background, experience and prior duties with the Company Executive shall
receive such stock options or cash bonuses as the Compensation Committee, in its sole discretion
shall determine. Executive agrees to make himself reasonably available to provide such Consulting
Services during the Consulting Period; provided, however, the Company agrees that it shall provide
reasonable advance notice to Executive of its expected consulting needs and any request for
Consulting Services hereunder shall not unreasonably interfere with Executive’s other business
activities and personal affairs as determined in good faith by Executive. In addition, Executive
shall not be required to perform any requested Consulting Services which, in Executive’s good faith
opinion, would cause Executive to breach any fiduciary duty or contractual obligation Executive may
have to another employer. Further, during the Consulting Period, Executive shall not be subject to
any non-competition provisions except for the two-year period provided for in Section 5(c). Unless
waived by Executive, Executive shall not be required to perform Consulting Services for more than
four (4) days during any week or for more than eight (8) hours during any day. Executive’s travel
time shall constitute hours of Consulting Services for purposes of this Section 6. The Parties
contemplate that, when appropriate, the Consulting Services shall be performed at Executive’s
office or residence and at the Company’s executive offices in Houston, Texas and may be performed
at such other locations only as they may mutually agree upon. Executive shall be properly
reimbursed for all travel and other expenses reasonably incurred by Executive in rendering the
Consulting Services.
7. Assignment. This Agreement cannot be assigned by Executive. The Company may
assign this Agreement only to a successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and assets of the
Company provided such successor expressly agrees in writing reasonably satisfactory to Executive to
assume and perform this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession and assignment had taken place. Failure of the
Company to obtain such written agreement prior to the effectiveness of any such succession shall
be a material breach of this Agreement.
8. Binding
Agreement. Executive understands that his obligations under this Agreement
are binding upon Executive’s heirs, successors, personal representatives, and legal
representatives.
9. Notices. All notices pursuant to this Agreement shall be in writing and sent
certified mail, return receipt requested, addressed as set forth below, or by delivering the same
in person to such party, or by transmission by facsimile to the number set forth below (which shall
not constitute notice). Notice deposited in the United States Mail, mailed in the manner described
herein above, shall be effective upon deposit. Notice given in any other manner shall be effective
only if and when received:
If to Executive:
|
Xxxxxxx X. Way | |
| 00 Xxxx Xxxx Xxxx | ||
| Xxxxxxx, Xxxxx 00000 | ||
| Fax: (000) 000-0000 | ||
If to Company:
|
HCC Insurance Holdings, Inc. | |
| 00000 Xxxxxxxxx Xxxxxxx | ||
| Xxxxxxx, Xxxxx 00000 | ||
| Fax: (000) 000-0000 | ||
| Attention: General Counsel | ||
with a copy (which shall
|
Xxxxxx X. Xxxxxx, Esq. | |
not constitute notice) to:
|
Xxxxxx and Xxxxx, LLP | |
| 0000 Xxxxxxxxx Xxxxxx, | ||
| Xxxxx 0000 | ||
| Xxxxxxx, Xxxxx 00000-0000 Fax: (000) 000-0000 |
10. Waiver. No waiver by either party to this Agreement of any right to enforce
any term or condition of this Agreement, or of any breach hereof, shall be deemed a waiver of such
right in the future or of any other right or remedy available under this Agreement.
11. Severability. If any provision of this Agreement is determined to be void,
invalid, unenforceable, or against public policy, such provisions shall be deemed severable from
the Agreement, and the remaining provisions of the Agreement will remain unaffected and in full
force and effect.
12. Arbitration. In the event any dispute arises out of Executive’s
employment with or by the Company, or separation/termination therefrom, whether as an
employee or as a consultant which cannot be resolved by the Parties to this
Agreement, such dispute shall be submitted to final and binding arbitration. The
arbitration shall be conducted in accordance with the National Rules for the
resolution of Employment Disputes of the American Arbitration Association (“AAA”). If
the Parties cannot agree on an arbitrator, a list of seven (7) arbitrators will be
requested from AAA, and the arbitrator will be selected using alternate strikes with
Executive striking first. The cost of the arbitration will be shared equally by
Executive and Company; provided, however, the Company shall promptly reimburse
Executive for all costs and expenses incurred in connection with any dispute in an
amount up to, but not exceeding twenty percent (20%) of Executive’s Base Salary (or,
if the dispute arises during the Consulting Period, Executive’s Base Salary as in
effect immediately prior to the beginning of the Consulting Period) unless such
termination was for Cause in which event Executive shall not be entitled to
reimbursement unless and until it is determined he was terminated other than for
Cause. Arbitration of such disputes is mandatory and in lieu of any and all civil
causes of action and lawsuits either party may have against the other arising out of
Executive’s employment with Company, or separation therefrom. Such arbitration shall
be held in Houston, Texas.
13. Entire Agreement. The terms and provisions contained herein shall
constitute the entire agreement between the parties with respect to Executive’s
employment with Company during the time period covered by this Agreement. This
Agreement replaces and supersedes any and all existing Agreements entered into
between Executive and the Company relating generally to the same subject matter, if
any, and shall be binding upon Executive’s heirs, executors, administrators, or other
legal representatives or assigns.
14. Modification of Agreement. This Agreement may not be changed or modified
or released or discharged or abandoned or otherwise terminated, in whole or in part,
except by an instrument in-writing signed by the Executive and an officer or other
authorized executive of Company.
15. Effective Date. It is understood by Executive that this Agreement shall
be effective when signed by both Company and Executive.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
17. Jurisdiction and Venue. With respect to any litigation regarding this
Agreement, Executive agrees to venue in the state or federal courts in Xxxxxx County,
Texas, and agrees to waive and does hereby waive any defenses and/or arguments based upon
improper venue and/or lack of personal jurisdiction. By entering into this Agreement,
Executive agrees to personal jurisdiction in the state and federal courts in Xxxxxx
County, Texas.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
| EXECUTIVE | COMPANY | |||||
| HCC INSURANCE HOLDINGS, INC. | ||||||
/s/ Xxxxxxx X. Way
|
By: | /s/ Xxxxxx X. Lack | ||||
XXXXXXX X. WAY
|
XXXXXX X. LACK, | |||||
| Chairman of the Compensation Committee | ||||||
Date: Jan. 13, 2005
|
Date: | Jan. 13, 2005 | ||||
[SIGNATURE PAGE OF WAY EMPLOYMENT AGREEMENT]
Exhibit B
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the 14th day of
December, 1995 by and between HCC Insurance Holdings, Inc., a Delaware corporation
(“Company”), and Xxxxxxx X. Way (“Indemnitee”).
status as such, whether or not the corporation would have the power to indemnify him against such
liability under the provisions of such laws; and
2
1. Services to the Company. Indemnitee will serve and/or continue to serve as a
director and/or officer of the Company and/or as a director, officer, employee, partner, trustee,
agent or fiduciary of a Company Affiliate in good faith so long as he is duly elected and qualified
in accordance with the provisions of the Company’s By-Laws or other applicable constitutive
documents thereof; provided that Indemnitee may at any time and for any reason resign from such
position.
2. Indemnification.
(a) Except as otherwise expressly provided in this Agreement or prohibited by applicable law,
the Company, within 60 days (or such longer period, if any, as may be permitted by Section 4(a)
hereof) after receipt of a written statement from Indemnitee requesting indemnification and
reasonably evidencing the costs, expenses, judgments, penalties, fines and amounts in settlement
incurred by him, shall, in accordance with the applicable provisions of this Agreement, fully
indemnify Indemnitee if Indemnitee is or was made a Party or is threatened to be made a party to
any Proceeding (as hereinafter defined) by reason of the fact that he is or was a director,
officer, employee, agent or fiduciary of the Company or is or was serving at the request of or for
the convenience of or to represent the interests of the Company as a director, officer, employee,
partner, trustee, agent or fiduciary of a Company Affiliate, or by reason of anything done or not
done by him in any such capacity (all of the foregoing reasons being herein collectively called
“Qualifying Reasons”), against costs, expenses (including attorneys’ fees and disbursements),
judgments, penalties, fines and amounts in settlement incurred by him in connection with such
Proceeding (including, but not limited to, the investigation, defense, settlement or appeal
thereof). In the event that both the foregoing sentence and Section 2(b) hereof would be applicable
to the indemnification being sought, the provisions of Section 2(b) shall govern. For purposes of
this Agreement, (i) a “Proceeding” shall mean any threatened, pending or completed investigation,
action, suit, arbitration, alternate dispute resolution mechanism or any other proceeding
(including any appeals therefrom), whether civil, criminal, administrative or investigative in
nature and whether in a court or arbitration, or before or involving a governmental,
administrative or private entity (including, but not limited to, an investigation initiated by the
Company, a Company Affiliate, or the Board of Directors or fiduciaries of any thereof), (ii)
references to “fines” shall include, without limitation, any excise taxes assessed on Indemnitee
with respect to any employee benefit or welfare plan and (iii) references to “serving at the
request of the Company” shall include, without limitation, any service, while serving as a
director, officer, employee, partner, trustee, agent or fiduciary of the Company or any Company
Affiliate which imposes duties on, or involves services by, Indemnitee with respect to any employee
benefit or welfare plan of the Company or any Company Affiliate, its participants or
beneficiaries.
(b) Notwithstanding any other provisions of this Agreement (except as set forth in
Section 2(c) hereof), and without a requirement for any determination as described in Section 4(a)
hereof, to the extent Indemnitee (i) has prepared to serve or has served as a witness in any
Proceeding in any way relating to the Company, any Company Affiliate, any affiliate (as defined in
Rule 405 under the Securities Act of 1933, as amended) of the Company (“Securities Act
3
Affiliate”), any associate (as defined in such Rule 405) of the Company or of any Securities
Act Affiliate or Company Affiliate, or anything done or not done by Indemnitee as a director,
officer, employee, partner, trustee, agent or fiduciary of the Company or any Company Affiliate or
(ii) has been successful on the merits or otherwise (including, without limitation, the dismissal
of an action without prejudice) in defense of any Proceeding arising out of a Qualifying Reason, or
in the defense of any claim, issue or matter involved therein, whether in the final adjudication,
arbitration or alternate dispute resolution mechanism or on appeal, the Company shall fully
indemnify him against all costs and expenses (including attorneys’ fees and disbursements) incurred
by him in connection therewith (including, but not limited to, the preparation or service as a
witness or the investigation, defense or appeal in connection with any such Proceeding) within 30
days after receipt by the Company from Indemnitee of a statement requesting such indemnification,
reasonably evidencing the expenses and costs so incurred by him and averring that they do not
relate to matters of the type described in clauses (i) or (ii) of Section 2(c) hereof.
(c) Notwithstanding anything to the contrary in the foregoing provisions of this Section 2
(and except as provided in the proviso clause of this sentence), Indemnitee shall not be entitled,
as a matter of right, to indemnification pursuant to this Section 2: (i) except as provided in
Section 4(e) or 9 hereof, against costs and expenses incurred in connection with any Proceeding
commenced by Indemnitee against the Company, any Company Affiliate, any Securities Act Affiliate or
any person who is or was a director or officer, in his or her respective capacity as such, of the
Company, any Company Affiliate or any Securities Act Affiliate; or (ii) against costs and expenses
incurred by Indemnitee in connection with preparing to serve or serving, prior to a Change in
Control (as defined in Section 4(d)(i) hereof), as a witness in cooperation with any party or
entity, who or which has threatened or commenced any Proceeding against the Company, any Company
Affiliate or Securities Act Affiliate, or any director, officer, employee, partner, trustee, agent
or fiduciary of any thereof in his or her respective capacity as such; or (iii) to the extent that
Indemnitee has theretofore received payment pursuant to any directors’ and officers’ liability
insurance policy maintained by the Company; provided, however, that indemnification may be provided
by the Company in any specific case as contemplated by Section 6 hereof notwithstanding the
applicability of the foregoing clause (i) or (ii).
(d) Notwithstanding any other provision of this Agreement, indemnification shall also be made
to the extent that the Court of Chancery of the State of Delaware or the court in which a
Proceeding was brought shall determine that Indemnitee is fairly and reasonably entitled to
indemnification for such costs and expenses as such court shall deem proper.
(e) The rights of the Indemnitee under this Agreement shall not be limited, diminished or
reduced by the right of the Indemnitee to seek or receive payments with respect to the matters
covered by this Agreement from any person other than the Company or under the insurance policies
maintained by the Company. In addition, the Indemnitee shall be under no obligation to seek or
accept any settlement offer and the failure to accept a settlement offer shall not be a basis for
refusing indemnification or any diminution thereof.
4
3. Partial Indemnification. If Indemnitee is only partially successful in the defense
of any Proceeding arising out of a Qualifying Reason, or in the defense of any claim, issue or
matter involved therein, whether in the initial adjudication, arbitration or alternate dispute
resolution mechanism or on appeal, the Company shall nevertheless indemnify Indemnitee, as a matter
of right pursuant to Section 2(b) hereof, to the extent Indemnitee has been partially successful.
4. Determination of Entitlement to Indemnification Pursuant to Section 2(a).
(a) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 2(a) hereof, a determination, if required by Delaware law, with respect to Indemnitee’s
entitlement thereto shall be made not later than 60 days (provided that such 60 day period can be
extended for an additional reasonable time if (x) the Company pursuant to a request by Indemnitee
has provided timely, continuous and effective Interval Protection (as defined in Section 7 hereof)
and (y) the Company in good faith requires such additional time for the obtaining or evaluating of
documentation reasonably available to Indemnitee) after the Company shall have received such
request (i) if a Change in Control (as hereinafter defined) shall have occurred, by Independent
Counsel (as hereinafter defined) (unless Indemnitee shall make a request which is timely under the
circumstances that such determination be made by the Board of Directors or stockholders, in which
case pursuant to clause (ii)(A) or (ii)(C) of this Section 4(a) as requested by Indemnitee) in a
written opinion to the Board of Directors, a copy of which (including each prior draft thereof)
shall be simultaneously delivered to Indemnitee, and (ii) in all other cases (A) by the Board of
Directors of the Company by a majority vote of a quorum consisting of Disinterested Directors (as
hereinafter defined), or (B) if such a quorum is not obtainable or, even if obtainable, if the
Board of Directors by the majority vote of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall be simultaneously
delivered to Indemnitee or (C) by the stockholders of the Company. The General Counsel of the
Company, if any, shall, promptly upon receipt of Indemnitee’s request for indemnification, advise
the Board of Directors in writing that Indemnitee has made such request for indemnification.
Indemnitee shall cooperate with the person or entity making such determination of Indemnitee’s
entitlement to indemnification, including providing to such person or entity upon reasonable
advance request any documentation or information reasonably available to Indemnitee and necessary
to such determination but not including documents or information which are within the scope of
Indemnitee’s attorney-client privilege. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person or entity making such
determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification pursuant to Section 2(a) hereof), and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(b) In making a determination of entitlement pursuant to section 4(a) or 4(e) hereof, the
person or entity making such determination shall presume that Indemnitee is entitled to
indemnification pursuant to section 2(a) hereof and that the Company has the burden of proof in the
making of any determination contrary to such presumption. If no determination pursuant
5
to Section 4(a) hereof is made within 60 days (or such longer period, if any, as may be permitted
by Section 4(a) hereof) of the Company’s receipt of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be absolutely entitled to such indemnification, absent (i) a misstatement of a material fact
necessary to make the statements in such request not materially misleading with respect to the
information necessary for the determination of entitlement to indemnification or (ii) a
prohibition of such indemnification under applicable law.
(c) The termination of any Proceeding by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not, in and of itself, affect the rights
of Indemnitee to indemnification or the presumptions to which Indemnitee is otherwise entitled
pursuant to the provisions of this Agreement.
(d) For purposes of this Agreement:
(i) “Change in Control” shall mean a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Securities Exchange Act of 1934 (“Act”), whether or not
the Company is then subject to such reporting requirement; provided however, that,
without limitation, such a Change in Control shall be deemed to have occurred
(irrespective of the applicability of the initial clause of this definition) if (A)
any “person” (as such term is used in Sections 13(d) and 14(d) of the Act, but
excluding any employee benefit plan or employee stock plan of the Company or any
subsidiary of the Company, or any entity organized, appointed, established or
holding securities of the Company with voting power for or pursuant to the terms of
any such plan) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Company representing 35% or
more of the combined voting power of the Company’s then outstanding securities
without the prior approval of at least two-thirds of the members of the Board of
Directors of the Company in office immediately prior to such persons attaining such
interest; (B) the Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of which members of the
Board of Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter; or (C) during
any period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any new director
whose election or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
6
(ii) “Disinterested Director” with respect to any request by Indemnitee for
indemnification hereunder shall mean a director of the Company who neither is nor
was a party to the Proceeding in respect of which indemnification is being sought
by Indemnitee.
(iii) “Independent Counsel” shall mean a law firm or a member of a law firm (A)
that neither is nor in the past five years has been retained to represent in any
material matter the Company, any Company Affiliate or any Securities Act Affiliate,
or Indemnitee or any other party to the Proceeding giving rise to a claim for
indemnification hereunder and (B) which, under applicable standards of professional
conduct then prevailing, would not have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s right to
indemnification under this Agreement and (C) that is reasonably acceptable to the
Company and Indemnitee. For purposes hereof, counsel shall not be deemed to
represent any government or governmental entity which may have commenced any
Proceeding or be asserting any claim against Indemnitee solely by reason of having
represented any department, commission, authority, subdivision or public benefit
corporation of or created by such government or governmental entity which is a party
to such Proceeding or before which it is being prosecuted or which is making any
such claim. In the event that the parties are unable to agree on the selection of
Independent Counsel, such counsel shall be selected by lot from among the Delaware
law firms generally reputed to be experienced in corporate law and having more than
25 attorneys and which meet the requirements of Section 4(d)(iii)(A) and (B) hereof
or Dallas, Houston, or New York City law firms generally reputed to be experienced
in corporate law and having more than 125 attorneys and which meet the requirements
of Section 4(d)(iii)(A) and (B) hereof and having, in each case, a rating of “av” or
better in the then current Xxxxxxxxxx-Xxxxxxx Law Directory. Such selection shall be
made in the presence of Indemnitee (or his representative), and the parties shall
contact, in the order of their selection by lot, such law firms, requesting each
such firm to accept an engagement to make the determination required hereunder until
one of such firms accepts such engagement. The fees and expenses of counsel in
connection with making any determination contemplated hereunder (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) shall be paid by
the Company and, if requested by such counsel, the Company shall promptly give such
counsel an appropriate written agreement with respect to the payment of its fees and
expenses and such other matters as may be reasonably requested by such counsel.
(e) In the event that pursuant to Section 4(a) hereof a determination is made that Indemnitee
shall not be entitled to indemnification hereunder in respect of all or any part of a claim made
by Indemnitee therefor, Indemnitee shall nevertheless be entitled, at his option, to a final
adjudication or may seek an award in arbitration regarding his entitlement to indemnification
hereunder in respect of such claim. In the event Indemnitee seeks adjudication, Indemnitee
7
shall initially commence, within 180 days from Indemnitee’s receipt of notice that he is not
entitled to indemnification, an appropriate action in an appropriate court of the State of Delaware
or any other court of competent jurisdiction. In the event Indemnitee seeks an award in
arbitration, such arbitration shall be initiated by Indemnitee within 180 days from Indemnitee’s
receipt of notice that he is not entitled to indemnification and shall be conducted by a single
arbitrator who is a member of a firm which would qualify as an Independent Counsel hereunder
pursuant to the commercial arbitration rules of the American Arbitration Association. The
arbitrator shall notify the parties of his or her decision within 60 days following the initiation
of such arbitration. The Company hereby agrees to be bound by the determination of such arbitrator
and shall bear all fees, costs and expenses imposed by the American Arbitration Association on
account of such proceeding, irrespective of the determination thereof. The Company further
unconditionally and irrevocably agrees that its execution of this Agreement shall also constitute a
stipulation by which it shall be irrevocably bound in any court or arbitration in which such
proceeding shall have been commenced, continued or appealed that (i) it shall not oppose
Indemnitee’s right to seek or obtain any such adjudication or award in arbitration or any other
claim by reason of any prior determination made pursuant to this Agreement with respect to
Indemnitee’s right to indemnification under this Agreement on such claim or any other claim, or,
except in good faith, raise any objections not specifically relating to the merits of Indemnitee’s
claim; (ii) for all purposes of this Agreement any such adjudication or arbitration shall be
conducted de novo and without prejudice by reason of any such prior determination to the effect
that Indemnitee is not entitled to indemnification; and (iii) it shall be bound by all provisions
of this Agreement (including, but not limited to, Sections 4(b) and 4(c) hereof). Whether or not
the court or arbitrator shall determine that Indemnitee is entitled to indemnification hereunder as
to any costs, expenses (including attorneys’ fees and disbursements), judgments, penalties, fines
or amounts in settlement in respect of any claim, issue or matter involved in the Proceeding in
respect of which indemnification is sought hereunder, the Company shall within 90 days after
written request therefor (and submission of reasonable evidence of the nature and amount thereof),
and unless there is a specific judicial finding that Indemnitee’s suit was frivolous, pay all costs
and expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in connection
with such adjudication or arbitration (including, but not limited to, any appellate proceedings).
(f) If the person or entity (including the Board of Directors, Independent Counsel,
stockholders, court or arbitrator) making the determination as to the entitlement of Indemnitee to
indemnification hereunder shall determine that Indemnitee is not entitled to indemnification in
respect of all claims, issues or matters involved in a Proceeding in respect of which
indemnification is sought hereunder but is entitled to indemnification for some of such claims,
issues or matters, such person or entity shall equitably allocate such costs, expenses (including
attorneys’ fees and disbursements), judgments, penalties, fines and amounts in settlement incurred
in connection with such Proceeding among the claims, issues or matters involved therein and
determine those for which Indemnitee shall be indemnified hereunder.
8
5. Advancement of Costs and Expenses.
(a) All costs and expenses (including attorneys’ fees, retainers and advances of
disbursements required of Indemnitee) incurred by Indemnitee in preparing to serve or serving as a
witness in a Proceeding of the type described in clause (i) of Section 2(b) hereof, or in
investigating, defending or appealing any Proceeding relating to a Qualifying Reason (and not
excluded by clause (i) or (ii) of Section 2(c), or arising in connection with an adjudication or
award in arbitration pursuant to Section 4(e) hereof, or relating to a Proceeding described in or
arising pursuant to Section 9 hereof, shall be paid by the Company (in advance of the final
disposition of such Proceeding) at the request of Indemnitee within 20 days after the receipt from
time to time by the Company from Indemnitee of a statement or statements requesting such advance or
advances, reasonably evidencing the expenses and costs incurred by him in connection therewith and
averring that they do not relate to matters described in the aforesaid clause (i) or (ii) of
Section 2(c), together with a written undertaking by Indemnitee to repay such amount if it is
ultimately determined (in a final adjudication or conclusion of an arbitration pursuant to Section
4(e) hereof, if Indemnitee elects to seek such an adjudication or arbitration, and otherwise in a
determination, if required hereunder, pursuant to Section 4(a) hereof) that Indemnitee is not
entitled to be indemnified against such costs and expenses by the Company as provided by this
Agreement (or, if Indemnitee has sought advances pursuant to Section 4(e) or 9 hereof, if there is
a specific judicial finding that Indemnitee’s suit was frivolous).
(b) If and to the extent it is finally determined hereunder that Indemnitee is not entitled to
indemnification, or is entitled only to partial indemnification, Indemnitee shall reimburse the
Company for all costs and expenses advanced or prepaid pursuant to Indemnitee’s prior request or
requests hereunder, or the proper proportion thereof, as the case may be, within 90 days after
receipt of an itemized written statement therefor from the Company, provided that Indemnitee shall
have no obligation to reimburse the Company for any of Indemnitee’s costs and expenses relating to
(i) cooperating with the Company in making its determination, as provided in Section 4(a) hereof,
(ii) an adjudication or arbitration of his entitlement to indemnification hereunder, as provided in
Section 4(e) hereof or (iii) a Proceeding described in or arising under Section 9 hereof (unless,
in the case of the foregoing clause (ii) or (iii), there is a specific judicial finding that
Indemnitee’s suit was frivolous).
(c) Indemnitee shall have the right to employ counsel during the pendency of any Proceeding
which is the subject of this Agreement, but the fees and expenses of such counsel shall be at
Indemnitee’s expense unless (i) all Indemnitees who are made a party or threatened to be made a
party to any Proceeding within the scope of this Agreement agree to use the same legal counsel;
(ii) the employment of counsel by Indemnitee has been authorized by the Company; (iii) the Company
acknowledges that there is a conflict of interest between the Company and Indemnitee in the conduct
of the defense of such Proceeding, in which case, counsel selected by Indemnitee must be reasonably
satisfactory to Company; and provided further however that in the event other persons who are
potential targets of any Proceeding are being separately represented because of the same or
substantially same conflict of interest, Indemnitee shall, upon the Company’s demand, use the same
counsel as engaged on behalf of the other
9
persons (unless a conflict also exists between Indemnitee and such other persons); (iv) following
ten (10) days written notice, the Company shall in fact not have employed counsel to assume the
defense of such Proceeding; or (v) counsel selected by the Company moves to withdraw from
representing Indemnitee, and the Company does not, within ten (10) days of receiving notice of
such motion employ substitute counsel.
6. Other Rights to Indemnification. The indemnification and advancement of costs and
expenses (including attorneys’ fees and disbursements) provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may now or in the future be entitled under
any provision of applicable law, the Certificate of Incorporation or any By-Law of the Company or
any other agreement or any vote of directors or stockholders or otherwise, whether as to action in
his official capacity or in another capacity while occupying any of the positions or having any of
the relationships referred to in Section 2 of this Agreement.
7. Interval Protection Against Premature Enforcement. During the interval between the
Company’s receipt of Indemnitee’s request for indemnification and the latest to occur of (a)
payment in full to Indemnitee of the indemnification to which he is entitled hereunder, or (b) a
determination (if required) pursuant to Section 4(a) hereof or a final adjudication or conclusion
of an arbitration pursuant to Section 4(e) hereof (if Indemnitee elects to seek such an
adjudication or arbitration) that Indemnitee is not entitled to indemnification hereunder, the
Company shall provide “Interval Protection” which, for purposes of this Agreement, shall mean the
taking of the necessary steps (whether or not such steps require expenditures to be made by the
Company at that time) to stay, pending a final determination of Indemnitee’s entitlement to
indemnification (and, if Indemnitee is so entitled, the payment thereof), the execution,
enforcement or collection of any judgments, penalties, fines or any other amounts for which
Indemnitee may be liable (and as to which Indemnitee has requested indemnification hereunder) in
order to avoid Indemnitee being or becoming in default with respect to any such amounts (such
necessary steps to include, but not be limited to, the procurement of a surety bond to achieve such
stay or the loan to Indemnitee of amounts necessary to satisfy the judgments, penalties, fines or
other amounts for which Indemnitee may be liable and as to which a stay of execution as aforesaid
cannot be obtained, the Board of Directors by its approval of the form of the Indemnification
Agreement (as hereinafter defined) having made the judgment that, in general, such loan or similar
assistance may reasonably be expected to benefit the Company), within three days after receipt of
Indemnitee’s written request therefor, together with a written undertaking by Indemnitee to repay,
no later than 90 days following receipt of a statement therefor from the Company, amounts (if any)
expended by the Company for such purpose, if it is ultimately determined (in a final adjudication
or conclusion of an arbitration pursuant to Section 4(e) hereof, if Indemnitee elects to seek such
an adjudication or arbitration, and otherwise in a determination (if required) pursuant to Section
4(a) hereof) that Indemnitee is not entitled to be indemnified against such judgments, penalties,
fines or other amounts, provided that in no event shall the Company pay the amount of any such
judgment, penalty, fine or other amount except pursuant to Section 2, 4 (if applicable) or 6
hereof.
10
8. Enforcement.
(a) The Company unconditionally and irrevocably agrees that its execution of this Agreement
shall also constitute a stipulation by which it shall be irrevocably bound in any court or
arbitration in which a proceeding by Indemnitee for enforcement of his rights shall have been
commenced, continued or appealed that its obligations set forth in this Agreement are unique and
special, and that failure of the Company to comply with the provisions of this Agreement will cause
irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As
a result, in addition to any other right or remedy he may have at law or in equity with respect to
a violation of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Company of its obligations under this Agreement. The
Company further irrevocably stipulates and agrees that (i) it shall not, except in good faith,
raise any objections not specifically relating to the merits of Indemnitee’s claim, (ii) if a
determination was made or deemed to have been made pursuant to the provisions of Section 4 hereof
that Indemnitee is entitled to indemnification, the Company shall be bound by such determination
and shall be precluded from asserting that such determination has not been made or that the
procedure by which such determination was made is not valid, binding and enforceable, (iii) the
Company shall be bound, in any such proceeding, by all provisions of this Agreement (including, but
not limited to, Sections 4(b) and 4(c) hereof) and (iv) the Company shall not assert any rights of
set-off against Indemnitee except for money borrowed by Indemnitee from the Company.
(b) In the event that Indemnitee is subject to or intervenes in any legal action in which the
validity or enforceability of this Agreement is at issue or institutes any legal action, for
specific performance or otherwise, to enforce his rights under, or to recover damages for breach
of, this Agreement, Indemnitee shall, within 30 days after written request to the Company therefor
(and submission of reasonable evidence of the amount thereof), and unless there is a specific
judicial finding that Indemnitees suit was frivolous, be indemnified by the Company against all
costs and expenses (including attorneys’ fees and disbursements) incurred by him in connection
therewith.
9. Duration of Agreement.
(a) This Agreement shall continue until and terminate upon the later of (i) the tenth
anniversary after Indemnitee has ceased to occupy any of the positions or have any of the
relationships described in Section 2(a) of this Agreement or (ii) (A) the final termination or
resolution of all proceedings with respect to Indemnitee commenced during such 10 year period and
(B) either (x) receipt by Indemnitee of the indemnification to which he is entitled hereunder with
respect thereto or (y) a final adjudication or binding arbitration that Indemnitee is not entitled
to any further indemnification with respect thereto, as the case may be.
(b) This Agreement shall be binding upon the Company and its successors and assigns and shall
inure to the benefit of Indemnitee and his heirs, devisees, executors, administrators or other
legal representatives.
11
10. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable under any particular circumstances or for any reason
whatsoever (a) the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all other portions of any Section, paragraph or clause of
this Agreement that contains any provision that has been found to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable), or the validity,
legality or enforceability under any other circumstances shall not in any way be affected or
impaired thereby and (b) to the fullest extent possible consistent with applicable law, the
provisions of this Agreement (including, without limitation, all other portions of any Section,
paragraph or clause of this Agreement that contains any such provision that has been found to be
invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall
be deemed revised, and shall be construed so as to give effect to the intent manifested by this
Agreement (including the provision held invalid, illegal or unenforceable).
11. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original, but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.
12. Headings. The headings of this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
13. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
14. Notification and Defense of Claim. Indemnitee agrees to promptly notify the
Company in writing upon being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any matter which may be subject to indemnification
covered hereunder, whether civil, criminal or investigative; provided, however, that the failure
of Indemnitee to give such notice to the Company shall not adversely affect Indemnitees rights
under this Agreement except to the extent the Company shall have been materially prejudiced as a
direct result of such failure. Nothing in this Agreement shall constitute a waiver of the
Company’s right to seek participation at its own expense in any Proceeding which may give rise to
indemnification hereunder.
15. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted
for by the party to whom said notice or other communication shall have been directed, (ii) mailed
by certified or registered mail with postage prepaid, on the fourth business day after the date on
12
which it is so mailed, or (iii) sent by facsimile transmission with the effective transmission
confirmed by receipt, in all cases:
(a)
|
if to Indemnitee, at the address indicated on the signature page hereof; and | |
(b)
|
if to the Company: | |
| HCC Insurance Holdings, Inc. | ||
| 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000 | ||
| Xxxxxxx, XX 00000 | ||
| Facsimile No.: (000) 000-0000 |
or to such other address as may have been furnished to either party by the other party.
16. Governing Law. The parties hereto agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the State of Delaware.
| HCC INSURANCE HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxxx | |||||
| Title: | EVP & CFO | |||||
| /s/ Xxxxxxx X. Way | ||||||
| Xxxxxxx X. Way | ||||||
| Address: | ||||||
13
Exhibit C
| HCC INSURANCE HOLDINGS, INC. | Page: | 1 | ||||
Personnel Grant Status
|
ID: 00-0000000 | File: | Optstmt | |||
| 00000 XXXXXXXXX XXX, XXX 000 | Date: | 11/10/2006 | ||||
| XXXXXXX, XXXXX 00000-0000 | Time: | 3:30:24PM | ||||
AS OF 11/10/2006 |
||||||
Xxxxxxx L Way
|
ID: | |||||
000 Xxxxxxxxx Xxxxx |
||||||
Xxxxxxx, XX Xxxxxx Xxxxxx 00000 |
||||||
STOCK OPTIONS |
| Grant | ||||||||||||||||||||||||||||||||||||||||
| Number | Date | Plan | Type | Granted | Price | Exercised | Vested | Cancelled | Unvested | Outstanding | Exercisable | |||||||||||||||||||||||||||||
00000108 |
1/2/1997 | 95 | NQ | 581,250 | $ | 15.0000 | 581,250 | 581,250 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000112 |
12/13/1995 | 95 | NQ | 468,750 | $ | 8.2000 | 184,628 | 468,750 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000153 |
5/5/1992 | 92N | NQ | 281,250 | $ | 1.3300 | 281,250 | 281,250 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000154 |
5/5/1992 | 92N | NQ | 112,500 | $ | 2.4900 | 112,500 | 112,500 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000155 |
12/15/1994 | 92I | ISO | 88,500 | $ | 5.6500 | 77,839 | 88,500 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000156 |
6/20/1995 | 95 | NQ | 24,000 | $ | 5.1300 | 19,713 | 24,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000651 |
1/7/1998 | 97 | NQ | 450,000 | $ | 11.0000 | 33,159 | 450,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000656 |
1/7/1998 | 97 | NQ | 225,000 | $ | 11.0000 | 225,000 | 225,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000861 |
12/31/1998 | 97 | NQ | 112,500 | $ | 11.8300 | 112,500 | 112,500 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00000875 |
2/12/1999 | 97 | NQ | 300,000 | $ | 10.9200 | 300,000 | 300,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00001219 |
1/5/2000 | 95 | NQ | 150,000 | $ | 8.0400 | 150,000 | 150,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00001220 |
1/5/2000 | 97 | NQ | 750,000 | $ | 8.0400 | 750,000 | 750,000 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00001221 |
1/5/2000 | 97 | NQ | 112,500 | $ | 8.0400 | 112,500 | 112,500 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00001737 |
7/22/2002 | 2001 | ISO | 22,068 | $ | 13.5900 | 22,068 | 22,068 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00001738 |
7/22/2002 | 2001 | NQ | 727,932 | $ | 13.5900 | 727,932 | 727,932 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
00002046 |
7/22/2005 | 2004 | NQ | 600,000 | $ | 25.8800 | 0 | 200,000 | 0 | 400,000 | 600,000 | 200,000 | ||||||||||||||||||||||||||||
| 5,006,250 | 3,690,339 | 4,606,250 | 0 | 400,000 | 600,000 | 200,000 | ||||||||||||||||||||||||||||||||||
| Information Currently on File | ||||||||||||||||
| Tax | Rate % | Option Broker | Registration | Alternate Address | ||||||||||||
FEDERAL-35% |
35.000 | |||||||||||||||
Medicare |
1.450 | |||||||||||||||
Social Security |
6.200 | |||||||||||||||
Options and Awards Summary
|
HCC INSURANCE HOLDINGS, INC. | Page: 1 | ||
| ID: 00-0000000 | File: Optsum | |||
| 00000 XXXXXXXXX XXX, XXX 000 | Date: 11/10/2006 | |||
| XXXXXXX, XXXXX 00000-0000 | Time: 3:29:38PM | |||
As of: 11/10/2006 |
||||
$0.0000 |
||||
Xxxxxxx L Way
|
ID: | |||
000 Xxxxxxxxx Xxxxx |
||||
Xxxxxxx, XX Xxxxxx Xxxxxx 00000 |
| Option No: 00000108 | Option Date: 1/2/1997 | Shares: 581,250 | Price: $15.0000 | Plan: 95 | Type: NQ | Accept Date: | ||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
581,250 |
1/2/1998 | 0 | $ | 0.00 | 1/2/2007 | 12/19/2001 | Cash | 581,250 | $ | 18.6900 | ||||||||||||||||||||||||||||||||||
581,250 |
0 | $ | 0.00 | 581,250 | ||||||||||||||||||||||||||||||||||||||||
| Option No: 00000112 | Option Date: 12/13/1995 | Shares: 468,750 | Price: $8.2000 | Plan: 95 | Type: NQ | Accept Date: | ||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
156,250 |
12/13/1996 | 0 | $ | 0.00 | 12/13/2005 | 6/17/1997 | Swap | 156,250 | $ | 18.7500 | ||||||||||||||||||||||||||||||||||
156,250 |
12/13/1997 | 0 | $ | 0.00 | 12/13/2005 | 12/15/1998 | Swap | 312,500 | $ | 11.8800 | ||||||||||||||||||||||||||||||||||
156,250 |
12/13/1998 | 0 | $ | 0.00 | 12/13/2005 | 468,750 | ||||||||||||||||||||||||||||||||||||||
468,750 |
0 | $ | 0.00 | |||||||||||||||||||||||||||||||||||||||||
| Option No: 00000153 | Option Date: 5/5/1992 | Shares: 281,250 | Price: $1.3300 | Plan: 92N | Type: NQ | Accept Date: | ||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
281,250 |
5/5/1992 | 0 | $ | 0.00 | 4/1/2010 | 9/3/1993 | Cash | 281,250 | $ | 5.2500 | ||||||||||||||||||||||||||||||||||
281,250 |
0 | $ | 0.00 | 281,250 | ||||||||||||||||||||||||||||||||||||||||
| Option No: 00000154 | Option Date: 5/5/1992 | Shares: 112,500 | Price: $2.4900 | Plan: 92N | Type: NQ | Accept Date: | ||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
50,625 |
5/5/1992 | 0 | $ | 0.00 | 4/1/2010 | 9/3/1993 | Cash | 78,750 | $ | 5.2500 | ||||||||||||||||||||||||||||||||||
28,125 |
3/31/1993 | 0 | $ | 0.00 | 4/1/2010 | 6/15/1994 | Cash | 33,750 | $ | 5.2700 | ||||||||||||||||||||||||||||||||||
33,750 |
3/31/1994 | 0 | $ | 0.00 | 112,250 | |||||||||||||||||||||||||||||||||||||||
112,500 |
0 | $ | 0.00 | |||||||||||||||||||||||||||||||||||||||||
Options and Awards Summary
|
HCC INSURANCE HOLDINGS, INC. | Page: 2 | ||
| ID: 00-0000000 | File: Optsum | |||
| 00000 XXXXXXXXX XXX, XXX 000 | Date: 11/10/2006 | |||
| XXXXXXX, XXXXX 00000-0000 | Time: 3:29:38PM | |||
As of: 11/10/2006 |
||||
$0.0000 |
||||
Xxxxxxx L Way
|
ID: | |||
000 Xxxxxxxxx Xxxxx |
||||
Xxxxxxx, XX Xxxxxx Xxxxxx 00000 |
||||
Option No: 00000155
|
Option Date: 12/15/1994 | Shares: 88,500 | Price: $5.6500 | Plan: 921 | Type: ISO | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
17,700 |
12/15/1995 | 0 | $ | 0.00 | 12/15/1999 | 6/17/1997 | Swap | 35,400 | $ | 18.7500 | ||||||||||||||||||||||||||||||||||
17,700 |
12/15/1996 | 0 | $ | 0.00 | 12/15/1999 | 12/15/1999 | Cash | 53,100 | $ | 8.0000 | ||||||||||||||||||||||||||||||||||
17,700 |
12/15/1997 | 0 | $ | 0.00 | 12/15/1999 | 88,500 | ||||||||||||||||||||||||||||||||||||||
17,700 |
12/15/1998 | 0 | $ | 0,00 | 12/15/1999 | |||||||||||||||||||||||||||||||||||||||
17,700 |
12/15/1999 | 0 | $ | 0.00 | 12/15/1999 | |||||||||||||||||||||||||||||||||||||||
88,500 |
0 | $ | 0,00 | |||||||||||||||||||||||||||||||||||||||||
Option No: 00000156
|
Option Date: 6/20/1995 | Shares: 24,000 | Price: $5.1300 | Plan: 95 | Type: NQ | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | |||||||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | ||||||||||||||||||||||||||||||||||||||
| 2,400 | 6/20/1996 | 0 | $ | 0.00 | 6/20/2005 | 6/17/1997 | Swap | 2,400 | $ | 18.7500 | |||||||||||||||||||||||||||||||||||||||
| 3,600 | 6/20/1997 | 0 | $ | 0.00 | 6/20/2005 | 12/15/1998 | Swap | 8,400 | $ | 11.8800 | |||||||||||||||||||||||||||||||||||||||
| 4,800 | 6/20/1998 | 0 | $ | 0.00 | 6/20/2005 | 11/4/1999 | Cash | 6,000 | $ | 7.2500 | |||||||||||||||||||||||||||||||||||||||
| 6,000 | 6/20/1999 | 0 | $ | 0.00 | 6/20/2005 | 9/27/2001 | Cash | 7,200 | $ | 17.0400 | |||||||||||||||||||||||||||||||||||||||
| 7,200 | 6/20/2000 | 0 | $ | 0.00 | 6/20/2005 | 24,000 | |||||||||||||||||||||||||||||||||||||||||||
| 24,000 | 0 | $ | 0.00 | ||||||||||||||||||||||||||||||||||||||||||||||
Option No: 00000651
|
Option Date: 1/7/1998 | Shares: 450,000 | Price: $11.0000 | Plan: 97 | Type: NQ | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason Shares | ||||||||||||||||||||||||||||||||||
450,000 |
1/7/1998 | 0 | $ | 0.00 | 1/7/2004 | 12/15/1998 | Swap | 450,000 | $ | 11.8800 | ||||||||||||||||||||||||||||||||||
450,000 |
0 | $ | 0.00 | 450,000 | ||||||||||||||||||||||||||||||||||||||||
Options
and Awards Summary
|
HCC INSURANCE HOLDINGS, INC. | Page: | 3 | |||||
| ID:00-0000000 | File: | Optsum | ||||||
| 00000 XXXXXXXXX XXX, XXX 000 | Date: | 11/10/2006 | ||||||
| XXXXXXX, XXXXX 00000-0000 | Time: | 3:29:38PM | ||||||
As
of: 11/10/2006 |
||||||||
$0.0000 |
||||||||
Xxxxxxx L Way
|
ID: | |||||||
000 Xxxxxxxxx Xxxxx |
||||||||
Xxxxxxx, XX Xxxxxx Xxxxxx 00000 |
||||||||
Option No: 00000656 |
Option Date: 1/7/1998 | Shares: 225,000 | Price: $11.0000 | Plan: 97 | Type: NQ | Accept Date: | ||||||||||||||||||||||||||||||||||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
225,000 |
12/31/1998 | 0 | $ | 0.00 | 12/31/2003 | 10/11/2001 | Same-Day Sale | 225,000 | $ | 18.6500 | ||||||||||||||||||||||||||||||||||
225,000 |
0 | $ | 0.00 | 225,000 | ||||||||||||||||||||||||||||||||||||||||
Option No: 00000861 |
Option Date: 12/31/1998 | Shares: 112,500 | Price: $11.8300 | Plan: 97 | Type: NQ | Accept Date: | ||||||||||||||||||||||||||||||||||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
112,500 |
12/31/1998 | 0 | $ | 0.00 | 12/31/2004 | 9/27/2001 | Same-Day Sale | 112,500 | $ | 17.1000 | ||||||||||||||||||||||||||||||||||
112,500 |
0 | $ | 0.00 | 112,500 | ||||||||||||||||||||||||||||||||||||||||
Option No: 00000875 |
Option Date: 2/12/1999 | Shares: 300,000 | Price: $10.9200 | Plan: 97 | Type: NQ | Accept Date: | ||||||||||||||||||||||||||||||||||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
300,000 |
2/12/1999 | 0 | $ | 0.00 | 2/12/2005 | 10/11/2001 | Same-Day Sale | 300,000 | $ | 18.6500 | ||||||||||||||||||||||||||||||||||
300,000 |
0 | $ | 0.00 | 300,000 | ||||||||||||||||||||||||||||||||||||||||
Option No: 00001219 |
Option Date: 1/5/2000 | Shares: 150,000 | Price: $8.0400 | Plan: 95 | Type: NQ | Accept Date: | ||||||||||||||||||||||||||||||||||||||
| V E S T I N G S C H E D U L E | T R A N S A C T I O N S | C A N C E L L A T I O N S | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
50,001 |
1/1/2001 | 0 | $ | 0.00 | 12/31/2007 | 9/27/2001 | Same-Day Sale | 50,001 | $ | 17.1000 | ||||||||||||||||||||||||||||||||||
50,001 |
1/1/2002 | 0 | $ | 0.00 | 12/31/2007 | 4/12/2002 | Same-Day Sale | 14,550 | $ | 18.6700 | ||||||||||||||||||||||||||||||||||
49,998 |
1/1/2003 | 0 | $ | 0.00 | 12/31/2007 | 4/16/2002 | Same-Day Sale | 35,451 | $ | 18.5600 | ||||||||||||||||||||||||||||||||||
150,000 |
0 | $ | 0.00 | 6/30/2003 | Same-Day Sale | 3,450 | $ | 19.9000 | ||||||||||||||||||||||||||||||||||||
| 7/2/2003 | Same-Day Sale | 46,548 | $ | 19.9300 | ||||||||||||||||||||||||||||||||||||||||
| 150,000 | ||||||||||||||||||||||||||||||||||||||||||||
Options and Awards Summary
|
HCC INSURANCE HOLDINGS, INC. | Page. 4 | ||
| ID: 00-0000000 | File: Optsum | |||
| 00000 XXXXXXXXX XXX, XXX 000 | Date: 11/10/2006 | |||
| XXXXXXX, XXXXX 00000-0000 | Time: 3:29:38PM | |||
As of: 11/10/2006 |
||||
$0.0000 |
||||
Xxxxxxx L Way
|
ID: | |||
000 Xxxxxxxxx Xxxxx |
||||
Xxxxxxx, XX Xxxxxx Xxxxxx 00000 |
||||
Option
No:00001220
|
Option Date: 1/5/2000 | Shares: 750,000 | Price:$8.0400 | Plan: 97 | Type: NQ | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
| 250,000 | 1/1/2001 |
0 | $ | 0.00 | 12/31/2007 | 9/27/2001 | Same-Day Sale | 249,999 | $ | 17.1000 | ||||||||||||||||||||||||||||||||||
| 250,000 | 1/1/2002 |
0 | $ | 0.00 | 12/31/2007 | 4/16/2002 | Same-Day Sale | 71,199 | $ | 18.5600 | ||||||||||||||||||||||||||||||||||
| 250,000 | 1/1/2003 |
0 | $ | 0.00 | 12/31/2007 | 4/17/2002 | Same-Day Sale | 105,150 | $ | 18.5800 | ||||||||||||||||||||||||||||||||||
| 750,000 | 0 | $ | 0.00 | 4/18/2002 | Same-Day Sale | 2,250 | $ | 18.6300 | ||||||||||||||||||||||||||||||||||||
| 4/19/2002 | Same-Day Sale | 5,850 | $ | 18.5000 | ||||||||||||||||||||||||||||||||||||||||
| 6/26/2003 | Same-Day Sale | 193,200 | $ | 19.8900 | ||||||||||||||||||||||||||||||||||||||||
| 6/27/2003 | Same-Day Sale | 63,300 | $ | 19.8800 | ||||||||||||||||||||||||||||||||||||||||
| 7/2/2003 | Same-Day Sale | 59,052 | $ | 19.9300 | ||||||||||||||||||||||||||||||||||||||||
| 750,000 | ||||||||||||||||||||||||||||||||||||||||||||
Option
No: 00001221
|
Option Date: 1/5/2000 | Shares: 112,500 | Price: $8.0400 | Plan: 97 | Type: NQ | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
| 112,500 | 1/5/2000 |
0 | $ | 0.00 | 12/31/2004 | 9/27/2001 | Same-Day Sale | 112,500 | $ | 17.1000 | ||||||||||||||||||||||||||||||||||
| 112,500 | 0 | $ | 0.00 | 112,500 | ||||||||||||||||||||||||||||||||||||||||
Option No: 00001737
|
Option Date: 7/22/2002 | Shares: 22,068 | Price: $13.5900 | Plan: 2001 | Type: ISO | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | ||||||||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||||||||
| 7,356 | 12/31/2002 |
0 | $ | 0.00 | 7/22/2008 | 2/16/2005 | Same-Day Sale | 22,068 | $ | 24.3500 | ||||||||||||||||||||||||||||||||||
| 7,356 | 7/1/2003 |
0 | $ | 0.00 | 7/22/2008 | 22,068 | ||||||||||||||||||||||||||||||||||||||
| 7,356 | 7/1/2004 |
0 | $ | 0.00 | 7/22/2008 | |||||||||||||||||||||||||||||||||||||||
| 22,068 | 0 | $ | 0.00 | |||||||||||||||||||||||||||||||||||||||||
| HCC INSURANCE HOLDINGS, INC. | Page: 5 | |||||||
Options and Awards Summary
|
ID:00-0000000 | File: Optsum | ||||||
| 00000 XXXXXXXXX XXX, XXX 000 | Date: 11/10/2006 | |||||||
| XXXXXXX, XXXXX 00000-0000 | Time: 3:29:38PM | |||||||
As of: 11/10/2006 |
||||||||
$0.0000 |
||||||||
Xxxxxxx L Way |
||
120 Carnarvon Drive
|
ID: | |
Xxxxxxx, XX Xxxxxx Xxxxxx 00000 |
Option No: 00001738
|
Option Date: 7/22/2002 | Shares: 727,932 | Price: $13.5900 | Plan: 2001 | Type: NQ | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | ||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||
292,644 |
12/31/2002 | 0 | $ | 0.00 | 7/22/2008 | 2/16/2005 | Same-Day Sale | 184,182 | $ | 24.3500 | ||||||||||||||||||||||||||||
292,644 |
7/1/2003 | 0 | $ | 0.00 | 7/22/2008 | 2/17/2005 | Same-Day Sale | 251,250 | $ | 24.3300 | ||||||||||||||||||||||||||||
142,644 |
7/1/2004 | 0 | $ | 0.00 | 7/22/2008 | 2/18/2005 | Same-Day Sale | 292,500 | $ | 24.4200 | ||||||||||||||||||||||||||||
727,932 |
0 | $ | 0.00 | 727,932 | ||||||||||||||||||||||||||||||||||
Option No: 00002046
|
Option Date: 7/22/2005 | Shares: 600,000 | Price: $25.8800 | Plan: 2004 | Type: NQ | Accept Date: | ||||||
| VESTING SCHEDULE | TRANSACTIONS | CANCELLATIONS | ||||||||||||||||||||||||||||||||||||
| Granted | Full Vest | Exercisable | Total Price | Expires | Date | Type | Shares | Value | Date | Reason | Shares | |||||||||||||||||||||||||||
200,000 |
7/22/2006 | 200,000 | $ | 5,176,000.00 | 7/22/2011 | |||||||||||||||||||||||||||||||||
200,000 |
7/22/2007 | 0 | $ | 0.00 | 7/22/2011 | |||||||||||||||||||||||||||||||||
200.000 |
7/22/2008 | 0 | $ | 0.00 | 7/22/2011 | |||||||||||||||||||||||||||||||||
Total Options Exercisable: |
200,000 | |||
Total Price: |
$ | 5,176,000.00 | ||
Total Potential Gain: |
$ | 0.00 | ||