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EXHIBIT 10.2
OTHER AGREEMENT
AGREEMENT (the "Agreement"), dated as of May 7, 1999, between
Executive Risk Inc., a Delaware corporation (the "Company"), and Xxxxxx X.
Deutsch, an individual residing at 0 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx
00000 (the "Executive").
WHEREAS, the Executive is employed as Executive Vice
President, Treasurer, Chief Financial Officer and Chief Actuary of the Company;
WHEREAS, the Executive and the Company have held certain
discussions concerning the Executive's employment by the Company after the
closing of the merger (the "Merger") of the Company with Excalibur Acquisition,
Inc. ("MergerSub"), a Delaware corporation which is a wholly-owned subsidiary of
The Chubb Corporation, a New Jersey corporation ("Chubb");
WHEREAS, the Company and the Executive have reached agreement
with respect to certain terms related to the Executive's employment by the
Company;
WHEREAS, the Company and the Executive wish to record such
agreement in writing;
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein and other good and valuable consideration, the
receipt of which are hereby acknowledged, the Company and the Executive hereby
agree as follows:
Section 1. Deemed Retirement. As further described in Sections
2, 3 and 4 below, for purposes of the Executive Risk Inc. Nonqualified Stock
Option Plan and the Executive Risk Inc. IPO Stock Compensation Plan
(collectively, the "Option Plans"), the Executive Risk Inc. Incentive
Compensation Plan (Pool A) (the "ICP") and the Executive Risk Inc. Performance
Share Plan (the "PSP"), in the event that the Executive's employment with the
Company terminates at any time after the closing of the Merger other than as a
result of his death or Permanent and Total Disability (as defined in the Option
Plans), such termination of employment shall be treated (a) as a "Retirement"
for purposes of the Option Plans and PSP, and (b) as a "retirement" with age
plus full years of employment by the Company equaling, or exceeding, sixty for
purposes of the ICP. The date of any such termination is hereinafter referred to
as the "Retirement Date."
Section 2. Stock Options. Each of the Executive's outstanding
options to purchase shares of the Company's common stock will be fully vested,
and fully exercisable, immediately upon the effective time of the Merger and
will be deemed to constitute an option to purchase shares of Chubb common stock
pursuant to the terms of the Agreement and Plan of Merger dated as of February
6, 1999 among the Company, MergerSub and Chubb (the "Merger Agreement"). Subject
to the sentence immediately following, each of the Executive's stock options
outstanding as of the Retirement Date shall remain exercisable until the earlier
of the third anniversary of the Retirement Date or the expiration of the term of
such option. In the event that Chubb should determine, as
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a matter of policy, that persons who are employees of the Company or one or more
of its subsidiaries on the day of the closing of the Merger shall be allowed a
period of longer than three years after termination of employment in which to
exercise options, outstanding upon the closing of the Merger, to purchase Chubb
common stock, the Executive also shall have such longer period, measured from
the Retirement Date, to exercise such stock options unless and to the extent
they have expired earlier. Except as provided herein, the stock options held by
the Executive shall be governed by the terms of the respective stock option
agreements and stock option plans pursuant to which such options were granted.
Section 3. Incentive Compensation Plan. The Executive shall be
eligible to receive an Award for Plan Year 1999 (which Award shall be a pro rata
Award if the Retirement Date should occur prior to December 31, 1999, as
provided in Paragraph III(g) of the ICP), at such time as other Participants in
the ICP receive Awards, if any, for that Plan Year. At such times as other
Participants in the Plan receive Awards, if any, with respect to the Report Year
Loss Ratio for Plan Years 1996, 1997, 1998 and 1999, the Executive shall receive
payment with respect to his participation in the ICP for such Plan Years. All
capitalized terms used in this Section 3 shall have the respective meanings
provided for such terms in the ICP.
Section 4. Performance Share Plan. The number of Performance
Share Units earned by the Executive under the PSP with respect to the 1997-1999
Performance Period shall be determined pursuant to Section 10.1 of the PSP and
the Merger shall constitute a Change in Control for such purposes. The Executive
shall receive distributions on such Performance Share Units at the same time or
times as the other Participants in the PSP receive their distributions, all in
accordance with the terms of the PSP. For purposes of clarity, it is agreed that
the Number of Performance Units earned by the Executive shall not be prorated
based upon the number of months of the Executive's participation during the
1997-1999 Performance Period. All capitalized terms used in this Section 4 shall
have the respective meanings provided for such terms in the PSP.
Section 5. Other Rights and Benefits. Except as specifically
provided herein, this Agreement shall have no effect on the rights of the
Executive to payments or other benefits due to the Executive pursuant to the
terms of any employee benefit plan, fringe benefit policy, payroll practice or
arrangement of the Company, including, without limitation, rights in respect of
coverage under welfare benefit plans for periods through the Retirement Date,
rights under the Company's Retirement Plan and Benefit Equalization Plan, rights
under the Merger Agreement, rights under any severance plan of the Company,
rights under deferred compensation arrangements of the Company, and
reimbursement for any reasonable business expenses incurred through the
Retirement Date in accordance with Company policy. Upon the termination of his
employment with the Company, the Executive shall be under no obligation to seek
other employment or to otherwise mitigate the obligations of the Company
hereunder, and there shall be no offset against amounts or benefits due the
Executive hereunder on account of any remuneration or benefit he may receive in
connection with subsequent employment.
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Section 6. Termination. This Agreement may be terminated (i)
by mutual written agreement of the Executive and the Company or (ii) by either
party if the effective date of the Merger shall not have occurred by December
31, 1999. If this Agreement is terminated pursuant to this Section 6, there
shall be no liability or obligation on the part of the Company or the Executive
pursuant hereto.
Section 7. Miscellaneous.
A. Modification; Amendment; Waiver. No modification,
amendment or waiver of any provisions of this Agreement shall be
effective unless approved in writing by both parties. The failure at
any time to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not
affect the right of either party thereafter to enforce each and every
provision hereof in accordance with its terms.
B. Governing Law; Jurisdiction. This Agreement and
performance under it, and all proceedings that may ensue from its
breach, shall be construed in accordance with and under the laws of
the State of Connecticut, and the parties submit to the jurisdiction
of the courts of the State of Connecticut for purposes of any actions
or proceedings that may be required to enforce this Agreement.
C. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this
Agreement.
D. Assignment. The rights and obligations of the
parties under this Agreement shall be binding upon and inure to the
benefit of their respective successors, assigns, executors,
administrators and heirs; provided, however, that neither the Company
nor the Executive may assign any duties under this Agreement without
the prior written consent of the other.
E. Notices. All notices and other communications under
this Agreement shall be in writing and shall be given in person or by
telefax or first class mail, certified or registered with return
receipt requested, and shall be deemed to have been duly given when
delivered personally or three days after mailing or one day after
transmission of a confirmed telefax, as the case may be, to the
respective persons named below:
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If to the Company: Executive Risk Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxx
Chief Executive Officer
Telefax: 000-000-0000
If to the Executive: Xxxxxx X. Deutsch
0 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Telefax: 000-000-0000
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
COMPANY: Executive Risk Inc.
By /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
President and Chief Executive Officer
EXECUTIVE: /s/ Xxxxxx X. Deutsch
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Xxxxxx X. Deutsch
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