Exhibit 10.18
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of the 30th day of October, 1996 by
NAC Re Corp., a Delaware corporation having its principal office in Greenwich,
Connecticut, NAC Reinsurance Corporation, a New York corporation having its
principal office in Greenwich, Connecticut (NAC Re Corp. and NAC Reinsurance
Corporation being hereinafter sometimes collectively referred to as "Employer"),
and Xxxxxxxx X. Xxxxx, Xx., a resident of Minnetonka, Minnesota ("Executive").
W I T N E S S E T H
WHEREAS, Executive is expected to make major contributions to the business
of Employer;
WHEREAS, Employer recognizes that Executive is capable of assuming the
position of Chief Executive Officer of NAC Reinsurance Corporation;
WHEREAS, Employer desires to ensure the continuity of its management and to
establish an orderly transition procedure with respect to the positions of
Chairman and Chief Executive Officer of NAC Re Corp.; and
WHEREAS, Executive is willing to make his services available to Employer
and to carry out the duties of Executive's positions and offices, subject to the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, Employer and Executive, intending to be legally
bound, do hereby agree as follows:
1. CERTAIN DEFINED TERMS. In addition to terms defined elsewhere herein,
the following terms shall have the following meanings when used in this
Agreement with initial capital letters:
(a) "Annual Incentive Plan" shall mean the Annual Incentive Plan of
the Employer.
(b) "Board" shall mean the Board of Directors of NAC Re Corp.
(c) "Cause" shall mean Executive's willful breach of duty in the
course of his employment or Executive's habitual neglect of his employment
duties in a manner that materially impacts the business or reputation of
Employer unless such breach or neglect is of a nature that reasonably can be
corrected and is fully corrected within sixty (60) days following written notice
to Executive in respect thereof. For purposes of this Section 1(c), no act, or
failure to act, on
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Executive's part shall be deemed "willful" unless done, or omitted to be done,
by Executive not in good faith and without reasonable belief that his action or
omission was in the best interest of Employer. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and an opportunity for Executive,
together with Executive's counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, Executive was guilty of conduct set
forth above in this Section 1(c) and specifying the particulars thereof in
detail.
(d) "Change in Control" shall mean a change in control of NAC Re
Corp. of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), whether or not NAC Re Corp. is then
subject to such reporting requirements; provided that, without limitation, such
a Change in Control shall be deemed to have occurred if (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the "beneficial owner" (as determined for purpose of Regulation 13D-G under the
Exchange Act as currently in effect), directly or indirectly, of securities of
NAC Re Corp. representing thirty percent (30%) or more of the combined voting
power of the then outstanding securities of NAC Re Corp.; or (ii) during any
period of two (2) consecutive years (not including any period prior to the
execution of this Agreement), individuals who at the beginning of such period
constitute the Board and any new director, whose election to the Board or
nomination for election to the Board by the stockholders of NAC Re Corp. was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office either who 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 of the Board; or (iii) the stockholders of NAC
Re Corp. approve a merger or consolidation of NAC Re Corp. with any other
corporation, other than a merger or consolidation which would result in the
holders of the voting securities of NAC Re Corp. outstanding immediately prior
thereto holding immediately thereafter securities representing more than eighty
percent (80%) of the combined voting power of the voting securities of NAC Re
Corp. or such surviving entity outstanding immediately after such merger or
consolidation; or (iv) the stockholders of NAC Re Corp. approve a plan of
complete liquidation of NAC Re Corp. or an agreement for the sale or disposition
by NAC Re Corp. of all or substantially all the assets of NAC Re Corp.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Common Stock" shall mean the common stock, ten cents (10CENTS)
par value, of NAC Re Corp.
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(g) "Compensation" shall mean the sum of (i) Executive's annual base
salary pursuant to Section 5(a) hereof and (ii) Executive's annual bonus at
target pursuant to Section 5(c) hereof.
(h) "Compensation Committee" shall mean the Compensation Committee of
the Board.
(i) "Disability" shall mean permanent and total disability as such
term is defined under Section 22(e)(3) of the Code. Any question as to the
existence of Disability upon which Executive and Employer cannot agree shall be
determined by a qualified independent physician selected by Executive (or, if
Executive is unable to make such selection, such selection shall be made by any
adult member of Executive's immediate family or Executive's legal
representative), and approved by Employer, said approval not to be unreasonably
withheld. The determination of such physician made in writing to Employer and
to Executive shall be final and conclusive for all purposes of this Agreement.
(j) "Effective Date" shall mean November 11, 1996.
(k) "Final Average Compensation" shall mean Executive's highest
average annual Compensation earned during any consecutive thirty-six (36)
complete months (or lesser actual period of receiving Compensation) during the
period of sixty (60) complete months (or lesser actual period of receiving
Compensation) immediately preceding Executive's termination of employment with
Employer.
(l) "Good Reason" shall mean the occurrence, without Executive's
express written consent, of any of the following circumstances unless, in the
case of paragraphs (i), (vi), (vii), or (viii), such circumstances are fully
corrected within sixty (60) days following Executive's written notice to
Employer in respect thereof:
(i) the assignment to Executive of any duties inconsistent
with his offices and status as of the Effective Date (or any offices and
status to which Executive has been promoted at the time), or a substantial
diminution in the nature or status of Executive's responsibilities;
(ii) the failure of Executive to be appointed, on the
schedules set forth in Sections 2 and 3 hereof, Chief Executive Officer of
NAC Re Corp. or Chairman of the Board;
(iii) a reduction in Executive's annual base salary as in
effect on the Effective Date, on March 1, 1997 or as the same may be
increased from time to time;
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(iv) in the event of a Change in Control, any circumstances
in which Executive is not Chief Executive Officer of a publicly traded,
independent reinsurance company;
(v) the relocation of the office in which Executive is
located on the Effective Date to a location more than forty-five (45) miles
therefrom;
(vi) a material reduction in the aggregate benefits and
compensation provided to Executive under Employer's employee pension and
welfare benefit plans and incentive compensation, stock option and stock
ownership plans;
(vii) the failure of Employer to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement,
as contemplated in Section 11 hereof; or
(viii) any purported termination of Executive's employment by
Employer for Cause for which Executive is not given notice of such
termination in accordance with Section 1(c) hereof; for purposes of this
Agreement, no such purported termination shall be effective.
Executive's continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason
hereunder. In the event of a termination of Executive's employment by
Executive for Good Reason, Executive shall provide Employer not less than
sixty (60) days' notice of such termination. Such notice shall indicate that
such termination is for Good Reason and shall set forth in reasonable detail
the facts and circumstances claimed to provide the basis for Executive's
termination for Good Reason. If within sixty (60) days following the date on
which such notice of termination is given, Employer notifies Executive that a
dispute exists concerning the grounds for termination, the date of
termination for determining the timing of any obligation under this Agreement
shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties or by arbitration pursuant to Section
15 hereof; provided, further, that the date of termination shall be extended
by a dispute only if such notice of dispute is given in good faith and
Employer pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, Employer will continue to
pay Executive his full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, annual base salary) and
continue Executive as a participant in all other incentive compensation,
benefit and insurance plans in which Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this Section 1(1), unless resolution of such
dispute is unreasonably delayed by Executive. Amounts paid under this
Section 1(1) are in addition to all other amounts due under this Agreement
and shall not be offset against or reduce any other amounts due under this
Agreement.
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(m) "Grant Date" shall mean the date on which the Board or the
Compensation Committee approves the grant of a non-qualified option to
purchase Common Stock (or a stock appreciation right) or the award of
restricted Common Stock to Executive.
(n) "Long-Term Incentive Plan" shall mean the Long-Term Incentive
Plan.
(o) "Term" shall mean the term provided in Section 4 hereof.
2. EMPLOYMENT; DUTIES; MANAGEMENT SUCCESSION. Commencing on the
Effective Date, Executive shall be employed as President and Chief Operating
Officer of NAC Re Corp. and as President and Chief Executive Officer of NAC
Reinsurance Corporation, and Executive agrees to carry out and perform all
the duties and responsibilities that are normally performed and pertinent to
these positions and that may be communicated to him from time to time by the
Chief Executive Officer of NAC Re Corp. or by the Board. Between the
Effective Date and December 1999, Executive shall work in cooperation with
the Chief Executive Officer of NAC Re Corp. to effect the orderly transition
of responsibility as Chief Executive Officer of NAC Re Corp. to Executive, as
shall be determined by mutual agreement; provided, however, that nothing
contained in this Agreement shall confer upon Executive any right to be
appointed Chief Executive Officer of NAC Re Corp., to be retained as
President and Chief Operating Officer of NAC Re Corp. or as President and
Chief Executive Officer of NAC Reinsurance Corporation, or to be retained as
an employee of Employer in any other capacity.
3. DIRECTORSHIPS. As soon as practicable following the Effective
Date, Executive shall be appointed to the Boards of Directors of NAC
Reinsurance Corporation, Greenwich Insurance Company, and Indian Harbor
Insurance Company. As soon as practicable following the Effective Date,
Executive shall also be appointed to the Board, subject to re-election to
such position on the Board by vote of the shareholders of NAC Re Corp. Not
later than July 2000, Executive shall be considered for election as Chairman
of the Board.
4. TERM. The term of this Agreement shall commence on the Effective
Date and shall continue through December 31, 2001, unless terminated earlier
pursuant to Section 7 hereof.
5. COMPENSATION AND BENEFITS DURING THE TERM.
(a) BASE SALARY: Executive's annual base salary shall be FOUR
HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($475,000.00), shall be FIVE HUNDRED
THOUSAND DOLLARS ($500,000.00) effective March 1, 1997, and shall be reviewed
annually commencing March 1998 in conjunction with normal salary
administration. Any increases will be based on Executive's achievement of
goals, performance of Employer and prevailing competitive
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conditions. Upon any appointment of Executive as Chief Executive Officer of
NAC Re Corp., Executive's annual base salary shall be increased based upon
prevailing competitive conditions.
(b) SIGN-ON BONUS: On January 15, 1997, Executive shall be paid
TWO HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($225,000.00) in cash and shall be
issued five thousand (5,000) shares of Common Stock upon payment of their par
value.
(c) ANNUAL BONUS OPPORTUNITY: During the Term, Executive shall
participate in the Annual Incentive Plan at a target of 45% (0-90%
opportunity) of annual base salary earned during the year. The first
opportunity for a bonus under the Annual Incentive Plan shall be in March
1998, based on 1997 performance in accordance with the terms of the Annual
Incentive Plan and the determination of the Compensation Committee.
(d) LONG-TERM BONUS OPPORTUNITY: During the Term, Executive shall
participate in the Long-Term Incentive Plan at a target of 55% (0-110%
opportunity) of average annual base salary earned during the applicable
performance period; provided, however, that for any performance period in
which Executive has not received annual base salary during the entire period,
annual base salary during any partial year shall be annualized, and provided,
further, that the target shall be 60% (0-120% opportunity) of annual base
salary upon any appointment of Executive as Chief Executive Officer of NAC Re
Corp. The first opportunity for a bonus under the Long-Term Incentive Plan
shall be in March 1998, based on 1995-1997 performance in accordance with the
terms of the Long-Term Incentive Plan.
(e) INITIAL STOCK OPTION GRANT:
(i) On or prior to the Effective Date, Executive shall be
granted stock appreciation rights, which will automatically convert into
non-qualified options on the second anniversary of the Effective Date,
("SARs") with respect to one hundred thousand (100,000) shares of Common
Stock, twenty percent (20%) of which shall vest on each of the five (5)
anniversaries of the Grant Date, provided that Executive is employed by
Employer on those dates. The exercise price of the foregoing SARs shall be
the fair market value of a share of Common Stock on the Grant Date.
(ii) On or prior to the Effective Date, Executive shall also
be granted SARs with respect to fifty thousand (50,000) shares of Common
Stock, which will vest on the sixth anniversary of the Grant Date; provided,
however, that fifty percent (50%) shall vest on the date, if earlier, on
which there has occurred an increase of twelve percent (12%) or more in the
price of a share of Common Stock from such price on the Grant Date, and fifty
percent (50%) shall vest on the date, if earlier, on which there has
occurred an increase of twenty-five (25%) or more in the price of
a share of Common Stock from such price on the Grant Date; provided,
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however, that Executive is employed by Employer on such dates and provided,
further, that such vesting in no case shall occur prior to six (6) months
following the Grant Date. The exercise price of the foregoing SARs shall be
the fair market value of a share of Common Stock on the Grant Date.
(iii) Options or SARs granted pursuant to this Agreement
shall be subject to the terms and conditions of the Company's stock option
plans and shall expire, unless exercised, ten (10) years following the Grant
Date. Vested SARs may not be exercised while Executive is employed by
Employer prior to conversion of SARs to non-qualified options.
(f) ANNUAL STOCK OPTION GRANT: Executive shall be given the
opportunity to be granted additional options or SARs with respect to shares
of Common Stock with an underlying market value at the time of grant of
100-125% of Executive's annual base salary at the time of grant in accordance
with and commencing upon Employer's next regular grant of options following
the Effective Date; provided, however, that nothing contained in this Section
5(f) shall confer upon Executive any right to such additional options or SARs.
(g) RESTRICTED STOCK GRANT: On or prior to the Effective Date,
Executive shall be granted fifteen thousand (15,000) shares of restricted
Common Stock, one-third (1/3) of which shall vest on the date on which there
has occurred an increase of fifteen percent (15%) or more in the price of a
share of Common Stock from the price on the Grant Date, one-third (1/3) of
which shall vest on the date on which there has occurred an increase of
thirty percent (30%) or more in the price of a share of Common Stock from the
price on the Grant Date, and one-third (1/3) of which shall vest on the date
on which there has occurred an increase of forty-five percent (45%) or more
in the price of a share of Common Stock from the price on the Grant Date;
provided, however, that Executive is employed by Employer on such dates and
provided, further, that such vesting in no case shall occur prior to six (6)
months following the Grant Date. On or prior to the Effective Date, Executive
also shall be granted five thousand (5,000) shares of restricted Common
Stock, twenty percent (20%) of which shall vest on each of the five (5)
anniversaries of the Grant Date; provided, however, that Executive is
employed by Employer on such dates.
(h) RETIREMENT BENEFIT:
(i) If Executive retires from employment with Employer on
or after attaining age fifty-five (55), Executive shall be paid a lifetime
annual retirement benefit, commencing within thirty (30) days following the
date of such retirement, equal to fifty percent (50%) of Executive's Final
Average Compensation, reduced by benefits from any defined benefit pension
plans maintained by Employer and any defined benefit pension plans maintained
by any previous employers. Any retirement benefit that is payable prior to
age sixty (60) shall be reduced by five percent (5%) per year to reflect its
expected period of payment. The benefit will be paid to
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Executive for his lifetime and, upon his death, fifty percent (50%) of his
benefit will be paid to his surviving spouse, if any, for her lifetime.
(ii) If Executive terminates employment with Employer prior
to attaining age fifty-five (55), Employer shall provide Executive with a
benefit equal to that which he would have received under the NAC Re Corp.
Benefits Equalization Plan had four (4) years been added to his actual
service with Employer, such benefit being reduced by his actual benefit under
the NAC Re Corp. Benefits Equalization Plan and the NAC Re Corp. Retirement
Plan. In the event of Executive's death prior to attaining age fifty-five
(55), a benefit shall be paid to the Executive's surviving spouse, if any, as
provided under the terms of the NAC Re Corp. Benefits Equalization Plan and
the NAC Re Corp. Retirement Plan, with credit for the four (4) additional
years of service as contemplated in the preceding sentence.
(iii) No benefit shall be payable pursuant to this Section
5(h) if Executive's employment is terminated for Cause, if Executive
terminates employment prior to attaining age fifty-five (55) without Good
Reason, or if Executive shall violate any of the provisions of Section 8
hereof.
(iv) The administration and interpretation of the benefit
payable pursuant to this Section 5(h) shall be determined by the independent
actuary of the Employer, whose interpretations and decisions shall be final
and binding on all persons.
(i) RELOCATION: Employer shall relocate Executive to the
Greenwich, Connecticut area in accordance with the relocation policy attached
hereto. In addition, Employer shall pay to Executive a mortgage subsidy of
two percent (2%), for a term not to exceed five (5) years, on a home mortgage
loan of up to seven hundred fifty thousand dollars ($750,000). Employer
shall pay to Executive, with respect to any payments in connection with
relocation that are subject to federal, state or local taxation, an
additional amount so that Executive shall incur no such taxes with respect to
such payments.
(j) PENSION AND WELFARE BENEFIT PROGRAMS: Executive shall be
entitled to participate, on a basis and to the extent consistent with
Executive's senior executive position, in any employee pension or welfare
benefit plan, employee stock purchase plan and other so-called fringe benefit
programs from time to time in effect for the benefit of employees of Employer
generally and/or for any group of employees of which Executive is a member,
provided that Executive meets the eligibility requirements of any such plan
or program.
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(k) OTHER EXECUTIVE BENEFITS: During the Term, Employer shall (i)
provide Executive with an automobile of a make and model commensurate with
Executive's position and shall pay all costs of insurance, maintenance and
operation for such automobile; (ii) provide Executive with reasonable
financial planning and tax services; and (iii) reimburse Executive for
reasonable club dues and initiation fees at a club of Executive's choice
which is important to the conduct of the business of Employer and which is
used for business purposes.
6. OTHER ACTIVITIES. During the Term, Executive is expected to devote
to Employer's business his full business time and attention so as to assure
full and efficient performance of Executive's duties hereunder. During the
Term, Executive shall not, without Employer's prior written consent, engage
or participate, directly or indirectly, in any other business as a sole
proprietor, partner, employee, officer, shareholder, trustee, advisor or
consultant, or accept appointment or election as a director or in any other
fiduciary or honorary capacity in any other business, venture or project;
provided, however, that nothing in this Agreement shall preclude Executive
from devoting nonbusiness time and efforts to charitable, social and civic
matters to the extent that such activities do not interfere with Executive's
performance of his duties under this Agreement and provided, further,
however, that Executive shall not be precluded from making investments as
described in the proviso to the first sentence of Section 8(a) hereof.
7. TERMINATION. Executive's employment under this Agreement may be
terminated by Employer at any time without prior notice, subject to the
requirement of prior notice if such termination is for Cause. Executive's
employment under this Agreement may be terminated by Executive upon not less
than three (3) months' prior notice, other than in the case of termination on
account of Executive's unforeseen health problems, Disability or Good Reason.
If Executive's employment under this Agreement is terminated, the following
provisions shall apply:
(a) TERMINATION OF EMPLOYMENT BY EMPLOYER FOR A REASON OTHER THAN
CAUSE OR BY EXECUTIVE FOR GOOD REASON: If, before the end of the Term,
Employer terminates Executive's employment for a reason other than Cause, or
if Executive terminates employment on account of Good Reason, Employer shall
pay to Executive, within thirty (30) days following the date of such
termination, a lump sum amount equal to three (3) times the sum of (i)
Executive's then annual base salary plus (ii) the amounts that would be paid
to Executive under the Annual Incentive Plan and the Long-Term Incentive Plan
at Executive's targets for the year or performance period, as the case may
be, during which such termination occurs.
(b) TERMINATION OF EMPLOYMENT BY EMPLOYER FOR CAUSE, BY EXECUTIVE
OTHER THAN FOR GOOD REASON OR ON ACCOUNT OF DEATH OR DISABILITY: If
Executive's employment is terminated by Employer for Cause, by Executive
other than for Good Reason, or on account of Executive's death or Disability,
Executive, or his estate in the case of his death, shall receive from
Employer
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within thirty (30) days following the date of termination a lump sum amount
equal to Executive's annual base salary which is accrued but unpaid as of the
date of termination.
(c) TERMINATION OF EMPLOYMENT AFTER A CHANGE IN CONTROL BY
EMPLOYER OTHER THAN FOR CAUSE OR BY EXECUTIVE FOR GOOD REASON: If, after a
Change in Control, Executive's employment is terminated by Employer other
than for Cause or by Executive for Good Reason, Employer shall pay to
Executive, within thirty (30) days following such termination, a lump sum
amount equal to the sum of (i) Executive's annual base salary which is
accrued but unpaid as of the date of termination plus (ii) the portions, if
any, of amounts under the Annual Incentive Plan and Long-Term Incentive Plan
that were earned by Executive but unpaid as of the date of termination plus
(iii) 2.99 times the sum of (A) Executive's then annual base salary plus (B)
the amounts that would be paid to Executive under the Annual Incentive Plan
and the Long-Term Incentive Plan at Executive's targets (as such targets were
in effect prior to the Change in Control) for the year or performance period,
as the case may be, during which such termination occurs, and Executive shall
vest in all issued but unvested restricted Common Stock and granted but
unvested options to acquire Common Stock then held by Executive. If an
excise tax under Section 4999 of the Code or any comparable tax that is in
excess of ordinary federal income taxes, as may be in effect from time to
time, is imposed on amounts paid to Executive hereunder, then Executive shall
be reimbursed by Employer in an amount equal to such excise tax and any
further tax due on amounts reimbursed hereunder within five (5) days after
Executive's submission to Employer of a notice of Executive's payment thereof.
(d) NON-EXCLUSIVITY OF RIGHTS: Nothing in this Agreement shall
prevent or limit Executive's present or future participation in any benefit,
bonus, incentive, or other plan or program provided by Employer for which
Executive may qualify, nor shall this Agreement limit or otherwise affect
rights that Executive may have under any stock option or other agreements
with Employer. Amounts or benefits that are vested or that Executive is
otherwise entitled to receive under any plan or program of Employer at, or
subsequent to, the date of termination of Executive's employment shall be
payable in accordance with such plan or program; provided, however, that any
compensation and benefits received by Executive pursuant to this Agreement
shall be in lieu of (but, if necessary to give effect to this provision,
shall be reduced by) any and all compensation and benefits that Executive is
entitled to receive or may become entitled to receive under any reduction in
force or severance pay plan, program or practice that Employer now has in
effect or may hereafter put into effect and shall be applied toward
satisfying any severance pay and benefits required under federal or state law
to be paid or provided to Executive.
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8. NON-COMPETITION; CONFIDENTIAL INFORMATION.
(a) Executive agrees that, during the Term, and if Executive's
employment is terminated by Executive other than for Good Reason, for a
period of eighteen (18) months following the date of termination of this
Agreement, Executive shall not (i) engage anywhere within the geographical
areas in which NAC Re Corp. and its subsidiaries (for purposes of this
Section 8, the "NAC Re Group") have conducted their business operations as of
the Effective Date or at any time prior to the date of termination of
Executive's employment, directly or indirectly, alone or as a shareholder,
principal, agent, partner, officer, director, employee or consultant of any
other organization, in the business conducted by the NAC Re Group as a
material component of its operations including, without limitation, insurance
or reinsurance (the "Designated Industry") in direct competition with the
NAC Re Group; provided, however, that it is acknowledged and agreed that this
Section 8(a)(i) does not prohibit Executive from engaging in the insurance
business where the Executive is only incidentally engaged in any activity
which is a material component of the operations of the NAC Re Group; (ii)
divert to any competitor of the NAC Re Group in the Designated Industry any
customer of the NAC Re Group; or (iii) solicit or encourage any officer,
employee or consultant of the NAC Re Group to leave their employ for
employment by or with any competitor of the NAC Re Group in the Designated
Industry; provided, however, that Executive may invest in stocks, bonds, or
other securities of any similar business in the Designated Industry (but
without otherwise participating in such Designated Industry) if (A) such
stocks, bonds, or other securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of the
Exchange Act; and (B) his investment does not exceed, in the case of any
class of the capital stock of any one issuer, one percent (1%) of the issued
and outstanding shares, or, in the case of other securities, one percent (1%)
of the aggregate principal amount thereof issued and outstanding. If at any
time the provisions of this Section 8 shall be determined to be invalid or
unenforceable, by reason of being vague or unreasonable as to area, duration
or scope of activity, this Section 8 shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court
or other body having jurisdiction over the matter; and Executive agrees that
this Section 8, as so amended, shall be valid and binding as though any
invalid or unenforceable provision had not been included herein. Nothing in
this Section 8 shall prevent or restrict Executive from engaging in any
business or industry other than the Designated Industry in any capacity.
(b) Executive shall not at any time after the date of termination
of employment reveal to anyone other than authorized representatives of the
NAC Re Group, or use for Executive's own benefit, any trade secrets, customer
information or other information that has been designated as confidential by
the NAC Re Group or is understood by Executive to be confidential without the
written authorization of the Board in each instance, unless such information
is or becomes available
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to the public or is otherwise public knowledge or in the public domain for
reasons other than Executive's acts or omissions.
(c) If Executive breaches any of the obligations under this
Section 8, Employer shall have no further compensation or benefit obligations
pursuant to this Agreement or pursuant to the Annual Incentive Plan or the
Long-Term Incentive Plan but shall remain obligated for compensation and
benefits for periods prior to such breach as provided in any other plans,
policies or practices then applicable to Executive in accordance with the
terms thereof. Executive hereby acknowledges that Employer's remedies at law
for any breach of Executive's obligations under this Section 8 would be
inadequate, and Executive and Employer agree that, in addition to any other
remedies provided for herein or otherwise available at law, temporary and
permanent injunctive relief may be granted in any proceeding which may be
properly brought by Employer to enforce the provisions of this Section 8
without the necessity of proof of actual damages.
9. NO MITIGATION OBLIGATION; NO SET-OFF OR COUNTERCLAIMS: In no event
shall Executive be obligated to seek other employment by way of mitigation of
the amounts payable to Executive under any of the provisions of this
Agreement. Any amounts that may be earned by Executive other than from
Employer shall not reduce Employer's obligation to make any payments
hereunder. The amounts payable by Employer hereunder shall not be subject to
any right of set-off that Employer may assert against Executive.
10. TAXES. Employer may withhold from any amounts payable under this
Agreement all federal, state, city, or other taxes as Employer is required to
withhold pursuant to any law, regulation or ruling. Executive shall bear all
expense of, except as otherwise contemplated herein, and be solely
responsible for, all federal, state, local or foreign taxes due with respect
to any payment received hereunder.
11. SUCCESSORS AND BINDING AGREEMENT.
(a) Employer will require any successor, whether direct or
indirect, by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of Employer, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that Employer is required to perform it. Failure of Employer to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Executive to
compensation from Employer in the same amount and on the same terms as
Executive would be entitled hereunder if Executive had terminated his
employment for Good Reason following a Change in Control, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the date on which Executive's employment
with Employer was terminated. As used in this Agreement,
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"Employer" shall include any successor to Employer's business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation
of law, or otherwise.
(b) This Agreement shall inure to the benefit of, and be
enforceable by, Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive dies while any amount is still payable hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to Executive's devisee, legatee or other designee or, if
there is no such designee, to Executive's estate.
12. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, provided that all notices to Employer
shall be directed to the attention of the Office of the General Counsel of
NAC Re Corp., or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt:
Employer:
NAC Re Corp.
Office of the General Counsel
Xxx Xxxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Executive:
Xxxxxxxx X. Xxxxx, Xx.,
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
13. GOVERNING LAW. The validity, interpretation, construction, and
performance of this Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York, without giving
effect to the principles of conflict of laws of such State, to the extent not
preempted by applicable federal law.
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14. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
15. ARBITRATION. Any dispute arising out of or in any way relating to
this Agreement or Executive's employment with Employer, including, without
limitation, any claims Executive may assert under the Age Discrimination in
Employment Act of 1967, as amended, shall be resolved by arbitration in
Connecticut through the Stamford, Connecticut office of the American
Arbitration Association in accordance with the Model Employment Arbitration
Procedures of the American Arbitration Association except to the extent such
provisions are modified as hereinafter provided. The arbitration proceeding
shall be conducted by three (3) arbitrators. Executive and Employer shall
each designate one (1) arbitrator, each of whom shall be an attorney admitted
to practice in one or more states who has ten (10) or more years of
experience in employment matters, and the arbitrators so selected shall
thereafter designate a third arbitrator (who shall be a member of the
National Academy of Arbitrators) by mutual agreement. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a
remedy for a dispute involving this Agreement other than a benefit
specifically provided under or by virtue of this Agreement. The decision of
the arbitrators shall be final and binding on Employer and Executive.
Employer and Executive shall each pay their own legal fees associated with
arbitration proceedings hereunder, but the fees of the arbitrators and any
other costs associated with such arbitration proceedings shall be shared
equally.
16. MERGER. This Agreement expresses in full the understanding of
Employer and Executive, and all promises, representations, understandings,
arrangements and prior agreements with regard to Executive's employment by
Employer are merged herein.
17. WAIVER. Failure by either party hereto to insist upon strict
adherence to any one or more of the covenants or terms contained herein, on
one or more occasions, shall not be construed to be a waiver nor deprive such
party of the right to require strict compliance with the same thereafter.
18. AMENDMENTS. No amendments hereto, or waivers or releases of
obligations or liabilities hereunder, shall be effective unless agreed to in
writing by all parties hereto.
19. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed effective as of the date first written above.
NAC Re Corp.
By:/S/XXXXXX X. XXXXXXXXXXX
--------------------------------------
Its Chairman and Chief
Executive Officer
NAC Reinsurance Corporation
By:/S/XXXXXX X. XXXXXXXXXXX
--------------------------------------
Its Chairman and Chief
Executive Officer
/S/XXXXXXXX X. XXXXX, XX.
-----------------------------------------
Xxxxxxxx X. Xxxxx, Xx.
