USF&G MEMORANDUM
TO: Xxxx X. Xxxxxx
FROM: Xxxxxx X. Xxxxx, Xx.
DATE: October 14, 1997
RE: Agreement and General Release
This memorandum will confirm our agreement concerning your separation
from employment with USF&G. We hope that your separation can occur as smoothly
as possible and on an amicable basis, and this memorandum will describe the
terms we are prepared to offer in order to accomplish the above objectives.
1. Our records will reflect that your employment with USF&G will
terminate effective October 15, 1997, your last day of employment. From the date
of this Agreement until October 15, 1997, you shall continue with your present
assignment and assist with an orderly transition of your duties to Xxx Xxxx. Of
course, during this period, you must abide by all standard policies and
procedures of USF&G including, but not limited to, USF&G's Code of Conduct.
Thereafter, and until December 31, 1998 or such time as you begin new
employment, you shall be available to consult with USF&G on such matters as
shall be required from time to time. You agree to notify us, in writing, as soon
as you have obtained new employment.
2. Provided that you have complied with all terms of this Agreement, on
or about your last day of employment, or otherwise as indicated below, USF&G
shall provide you with the following severance payments:
a. From October 15, 1997 until December 31, 1998, you
shall receive, on a bi-weekly basis, an amount equal to your
present bi-weekly base salary;
b. Health and dental insurance for 60 days after your
last day of employment at the applicable employee rate to the
extent permitted by law and consistent with the terms and
conditions of the applicable benefit plans, as if you were
still employed. Thereafter, you may continue your health and
dental benefits in accordance with COBRA. Should you elect to
continue these benefits under COBRA, you shall only be
required to pay the applicable employee rate for such benefits
until the earlier of December 31, 1998, or the date you begin
new employment. After the date you have begun new employment
or in the event you have not secured other employment by
December 31, 1998, you nevertheless will be able to continue
the balance of COBRA continuation, but at the full COBRA rate;
c. USF&G will arrange for you to apply for a personal
disability insurance policy comparable to the current USF&G
Long Term Disability policy. Under this arrangement, you will
pay the required premiums, on a quarterly basis, and USF&G
will reimburse you, on a grossed-up basis, for such
payment(s). USF&G's reimbursement to you for such disability
insurance payment(s) shall end on the earlier of December 31,
1998, or the date you begin new employment;
d. Your automobile allowance, physical examination
reimbursement, and personal financial planning and tax
preparation benefits will continue until the earlier of
December 31, 1998, or the date you begin new employment;
e. An amount equal to $18,465.00 to compensate you
for 401(K) company contributions which you are forfeiting.
Payment of this amount will be made on or before December 31,
1997;
f. Subject to adjustments as set forth below, an
amount equal to what you would have received under the MIP and
LTIP Plans for the 1997 calendar year and 1995-1997 plan
cycle, respectively, had your employment continued, based upon
the target amounts for grade 23, the actual bonus pool, and
the cumulative operating results of USF&G. Such amounts shall
be prorated based on the period January 1 through October 15,
1997 (with respect to the 1997 MIP Plan), and based on the
period January 1, 1995 through October 15, 1997 (with respect
to the LTIP Plan). Payment of severance amounts which are
based on the LTIP Plan shall be converted on an equivalent
basis into cash based on LTIP stock valuation on the grant
date. Payment of such severance amounts will be made in equal
monthly installments, plus simple interest of 7% of the
undistributed balance, beginning on bonus day 1998, and ending
December 31, 1998. In all other respects, the amount, time and
other terms of such severance payments shall correspond to the
terms and conditions of the MIP and LTIP bonus plans in
effect;
g. Effective March 31, 1998, USF&G will provide you
with a 90 day window (ending June 30, 1998) in which you can
receive the cash value of 10,000 stock options with an
exercise price of $13.63 per share, 14,965 stock options with
an exercise price of $14.56 per share, and 7,800 stock options
with an exercise price of $22.50 per share, which is
equivalent to your stock options previously granted which
would have vested in the ordinary course in March 1998. To
calculate the value of this severance amount, we will compare
the exercise prices of these options with the USF&G common
stock closing share price on your "designation date." To
engage your designation date, you must deliver a written
notice of designation to the Corporate Secretary by the close
of regular business on any business day you choose during this
90 day period; the date you deliver such notice will be deemed
your designation date;
h. The USF&G Executive Split Dollar Plan Agreement
between you and USF&G will remain in effect until December 22,
1997, at which time you will have attained 5 years of
participation and will be 25% vested in the cash value of the
policy. As of December 22, 1997, pursuant to the terms of the
Split Dollar Agreement, you will no longer be entitled to
participate in the Split Dollar Plan. USF&G will arrange for
you to apply for a personal term life insurance policy which,
when combined with the death benefits payable under the Split
Dollar Plan, will provide a net death benefit amount
comparable to the amount you would have received under the
Split Dollar Plan as of December 22, 1997. Under this
arrangement, you will pay the required premiums, on a
quarterly basis, and USF&G will reimburse you, on a grossed-up
basis, for such payments. USF&G shall only reimburse you for
such term life insurance payments(s) for coverage beginning
December 22, 1997 (provide that, prior to this date, you have
not begun new employment); in any event, such reimbursement
shall end on the earlier of December 31, 1998, or the date you
begin new employment;
i. USF&G, through its relocation vendor, agrees to
direct an offer to purchase your current Katesford Road
residence, in the amount of $850,475.69. USF&G shall pay the
customary amounts for brokerage commissions and closing costs
(including transfer and recordation taxes to the extent
customarily paid by the seller) and customary adjustments will
be made at closing for proration of real estate taxes and
homeowner's association assessments. This directed offer will
be made consistent with USF&G's policies regarding such
matters (as modified by this paragraph), including, but not
limited to, its policies requiring you to maintain the
condition of your residence, keep it fully insured, and assist
in selling efforts in all respects. This directed offer will
occur at a time reasonably satisfactory to you on or before
December 31, 1998; provided, however, if you fail to notify
USF&G within such time frame of your desire for such offer,
this provision 2(i) shall terminate and be of no further
effect. USF&G's obligation hereunder to make this directed
offer will not apply if, prior to USF&G's directed offer being
implemented, you accept a new employment opportunity from an
employer that either offers or customarily provides to new
executive hires a similar directed offer program or some other
method (such as an enhanced hiring bonus) to cover any loss on
sale of your residence. In addition, if a directed offer is
made and you subsequently accept a new employment opportunity
from an employer which either offers or customarily provides
to new executive hires a similar program or a sign-on bonus to
cover loss on sale, then you agree to remit any amount or
participate in such program, as the case may be; and
j. Individual Executive outplacement service, subject
to the approval of the Executive Vice President Human
Resources, to begin immediately.
3. You also will be eligible for the following other payments:
a. In accordance with the Executive Deferred Bonus
Payment Plan, in February 1998, you will receive your deferred
MIP bonuses totaling $220,500.00 (plus interest accrued and
vested under the terms of the deferred compensation plan),
paid in a lump sum; and
b. Any USF&G stock options which are vested as of
October 15, 1997 must e exercised on or prior to January 13,
1998; otherwise, such unexercised options shall be canceled.
Naturally, you will be permitted to participate in USF&G's
cashless stock options exercise program, to the same extent as
other USF&G employees.
4. The severance payments provided in paragraph 2, above, and the other
payments provided in paragraph 3, above, shall be subject to deductions for
applicable taxes and withholdings, and for amounts owed by you to USF&G. Where a
payment is being made subject to being grossed-up, the gross-up percentage shall
be 53.16%
5. Attached hereto is a document entitled "Pay and Benefit Procedures
Upon Separation." Except as provided for above or in the attached document, you
will be entitled to no other or further compensation, remuneration, MIP, LTIP,
or other bonuses, payments or benefits of any kind. The parties recognize that
you are vested in USF&G's pension plan, and therefore are entitled to no annuity
or other similar payments intended to provide or supplement retirement benefits.
The parties also understand and agree that the severance payments provided under
paragraph 2 and its sub parts will not count toward pensionable earnings.
Nothing in this paragraph is intended to divest you of any retirement benefit or
stock options in which you have a vested right, nor is it intended to affect any
rights and entitlements you have to health insurance continuation under COBRA.
You further acknowledge that the benefits provided in this Agreement exceed the
benefits you would normally receive and that those extra benefits are provided
by USF&G in exchange for your signing this Agreement.
6. Naturally, there are some things that we expect from you:
a. You agree to return, on or before October 15,
1997, all of USF&G's property including, but not limited to,
all correspondence, drawings, blue prints, manuals, letters,
notes, notebooks, reports, flow-charts, programs, proposals,
and any other documents concerning USF&G's customers,
products, agents, accounts, software or processes, including
any copies of such property;
b. You agree to submit, by October 15, 1997, any
expense account reports. Your ordinary and necessary
reasonable business expenses incurred prior to your last day
of employment will be paid by USF&G, in accordance with
USF&G's expense reimbursement policies, upon submission by you
of proper documentation;
c. You agree to keep confidential any trade secret
and any business, proprietary, confidential, or copyrighted
information of USF&G or its Licensors which you acquired in
connection with your employment, and otherwise agree to comply
with the USF&G Information Resources Use, Nondisclosure and
Ownership Agreement (copy attached). This is intended to cover
any information of a nature not normally disclosed by USF&G to
the general public;
d. You agree not to communicate any adverse or
derogatory information concerning USF&G, including its
directors, officers, employees, or agents, to any persons,
corporations, or other entities; and
e. You agree to cooperate with USF&G in any matters
relating to any claim, administrative hearing, suit, or other
administrative or judicial hearings, including, if requested
by USF&G, providing information for interrogatories,
testifying in depositions, court or administrative hearings
and providing such other information and assistance as USF&G
may from time to time request. USF&G shall pay all reasonable
out-of-pocket costs which may be incurred by you in carrying
out your obligations hereunder.
7. In keeping with our mutual intention to allow for an amicable
separation, and to resolve any and all outstanding issues relating to your
employment, it is agreed that you hereby release USF&G, its directors, officers,
employees, agents, and all related or affiliated persons or entities of and from
any and all liability, claims, causes, demands, obligations, severance payments
(including but not limited to any rights in any executive severance plans),
attorneys fees, actions, contracts, torts, promises, damages, and rights which
you have or may have arising out of or related to your employment, including the
termination of your employment. This waiver and release includes all rights and
obligations under any federal, state, or local laws pertaining to employment,
including all employment discrimination laws, such as the Age Discrimination in
Employment Act ("ADEA"). Subject to applicable law, you agree that you have not
filed, and will not file, any complaints or charges against USF&G or its
directors, officers, employees or agents, with any administrative agency or
court. Obviously, nothing in this paragraph will affect the ability of either
party to enforce rights or entitlements specifically provided for under this
Agreement, and nothing in this paragraph affects any rights or claims under the
ADEA that may arise after the date this Agreement is executed.
8. The parties recognize and agree that this Agreement shall not be in
any way construed as an admission by USF&G or its directors, officers,
employees, or agents of any liability, wrongdoing, discrimination, fault, or
breach, the same being specifically denied.
9. You agree that during your period of employment and continuing
through December 31, 1998, you shall not, without the prior written consent of
the Chief Executive Officer of USF&G, directly or indirectly solicit for
employment or hire, or cause to be solicited or hired, any current USF&G
employee. You further agree that during your period of employment and continuing
through December 31, 1999, you will not solicit or initiate the solicitation of
current agents or accounts of USF&G unless and to the extent your new employer
has existing business agreements with such agent or account, and in no event
will you solicit or cause any such USF&G agents or accounts of USF&G to transfer
any USF&G business to your new employer. You also agree that, during these
periods, if a USF&G employee or agent contacts you to inquire about prospective
employment, appointment, or transfer of accounts, you will inform the employee
or agent that you cannot discuss the matter further without informing USF&G. In
the event of your breach of any of the provisions of this paragraph, you agree
that: a. you will immediately cease receiving any further payments or
perquisites under this Agreement; and b. you will promptly return any severance
payments based upon the MIP or LTIP Plans made to you under this Agreement. The
parties recognize that damages in the event of breach of this paragraph would be
difficult, if not impossible to determine, and it therefore is agreed that USF&G
shall have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach. Nothing in the preceding
sentence is intended to limit in any way any other rights or remedies USF&G may
have regarding such a breach.
10. Please read the above provisions carefully. Feel free to consult
with family members or counsel, if you believe that is appropriate. In
accordance with current legal requirements under the Older Workers' Benefit
Protection Act, we will hold this offer open for twenty-one (21) days from the
date of this memorandum, although we would hope to conclude this matter as
quickly as possible. In addition, you may revoke this Agreement any time within
seven (7) days after it is signed by you. Any revocation must be in writing and
delivered to us within seven (7) days in order to be effective.
11. If our offer is acceptable, please sign below and return this
Agreement or a copy to me. Your signature will confirm that you are entering
into this Agreement voluntarily and with the full understanding of all the above
terms, and that you are not relying upon any representations, statements or
agreements of USF&G as a basis for entering into this Agreement except for those
expressly set forth in this Agreement. In addition, once signed, this Agreement
will set forth the entire agreement between USF&G and you. It will supersede any
previous agreements or discussions concerning your employment or the termination
thereof, including, without limitation, the term sheet dated September 10, 1997,
initialed by you and Xxxx XxxXxxx. No changes in this Agreement will be valid
unless in writing and signed by both parties. Any need for interpretation or
enforcement of this Agreement will be in accordance with Maryland law. Any
disputes relating to this Agreement, its enforceability, or any other disputes
between the parties shall be decided solely by final and binding arbitration
held in the jurisdiction where the branch office of USF&G is located which is
nearest to your principal address. The arbitration shall be conducted by
JAMS/ENDISPUTE, Inc. in accordance with its Arbitration Rules and Procedures
then in effect. The arbitrator will be chosen from JAMS/ENDISPUTE's panel of
retired judges. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction.
AGREED and ACCEPTED:
UNITED STATES FIDELITY AND EMPLOYEE
GUARANTY COMPANY
By: __________________________ __________________________
XXXXXX X. XXXXX, XX. XXXX X. XXXXXX
Chief Executive Officer
-------------------------- --------------------------
Witness Witness
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Date Date
PAY AND BENEFIT PROCEDURES UPON SEPARATION
Outlined below are some specifics on the benefits and some special
procedures that may apply to you. Please understand that this is only a summary,
and this summary does not replace the official company plan documents, which
govern all rights and benefits. In addition, this summary is not part of the
official company plan documents, and if there is any conflict between this
summary and a plan document, the plan document will control. Since there may be
occasions when USF&G must change the benefits described in this summary, USF&G
reserves the right to add to, delete, or amend any policies or benefits at any
time without prior notice.
I. COMPENSATION AND SEVERANCE
A. PAY
You will be paid through your last day of employment. You
will also be paid for any unused vacation days, floating
holidays, and personal days. The Company will pay severance
benefits as outlined in your Severance Agreement and General
Release.
B. STOCK OPTIONS
Under USF&G's Stock Option Plan, you are entitled to exercise
your options on USF&G stock options granted to you which have
vested on or before your last day of employment. You must,
however, exercise such options within 90 days of your last day
of employment, unless you retire, in which case you have up to
one year from your last day of employment to exercise such
options. Options not vested on or prior to your last date of
employment are automatically canceled. To exercise your
option, or to obtain further information, contact Xxxx Xxxxxx
at (000) 000-0000.
II. BENEFITS
A. ACCIDENTAL DEATH AND DISMEMBERMENT PLAN and BUSINESS TRAVEL
ACCIDENT PLAN
Coverage under these Plans will cease on your last day of
employment.
B. CAPITAL ACCUMULATION PLAN (CAP)
Your participation (if any) in the Capital Accumulation Plan
will end on your last day of employment. Within a few weeks,
CAP Direct will send you a letter describing your distribution
options under the plan. If you do not respond, and your vested
account balance is $3,500 or less, you will automatically
receive a taxable distribution of your balance within 3 months
of CAP Direct being notified of termination. If you do not
respond, and your vested balance is greater than $3,500, your
balance will remain in the plan until you are 65 years old.
If you wish to apply for your final distribution prior to
receiving the mailing from CAP Direct, you should call CAP
Direct (0-000-000-0000) for the final distribution information
and elections. You will then be directed to key your social
security number and PIN #.
If you have an outstanding loan balance, the loan will become
taxable unless you repay it. For information on repaying your
loan, call CAP Direct (0-000-000-0000).
C. EMPLOYEE PERSONAL INSURANCE PROGRAM
If you are participating in the Employee Personal Insurance
Program, any personal policy, including Auto and Homeowners,
will be continued until the policy expiration date, provided
that all outstanding premiums are paid within 30 days of your
last day of employment.
After the expiration date of the policy, you will no longer
be eligible for the employee discount. Assuming you are
otherwise eligible, any USF&G independent agent can make
arrangements to renew coverage.
Retirees continue to be eligible for the Program and upon
separation should arrange for renewal.
If you have an individual Life Policy, you may continue the
policy by changing to a premium-paying method other than
payroll deduction -- i.e., pre-authorized monthly check,
monthly, quarterly, semi-annual, or annual payments -- subject
to minimum premium requirements and payment of full annual
rate.
D. EMPLOYEE SAVINGS BOND PROGRAM
If you are currently enrolled in the USF&G Employee Savings
Bond Program, upon separation, you will receive the cash value
in the account or a bond if there is enough money in the
account.
E. FLEXIBLE SPENDING ACCOUNTS (FSA)
If you are enrolled in the health care spending account or
the dependent day care spending account, deductions from your
pay for these accounts will terminate on the last day of your
employment. You may continue to submit claims for up to 60
days from your last day of employment for expenses incurred on
or before your last day of employment. Claims incurred after
this date are not reimbursable unless you pay the remaining
balance of your goal amount as described below.
If you wish to have your health care flexible spending
account available for reimbursement for the remainder of the
year, you may elect to continue to pay, on an after tax basis,
your elected contribution under the "Continuation Coverage"
provision of the Plan (also known as COBRA Coverage). Electing
COBRA coverage keeps you active in the plan for the remainder
of the calendar year and allows you to submit claims for
eligible expenses incurred at any time during the year,
beginning with the effective date of your coverage under the
plan, provided you pay the required premium. Further
information may be obtained by calling Xxxxxxx Xxxxxx of
Corporate Human Resources at 000-000-0000.
The IRS requires any funds left in the accounts after the last
date for which claims can be submitted to be forfeited.
If you need to file a reimbursement claim, please complete
form HMRE 0500 for Health Care or HMRE 0499 for Dependent Day
Care and submit to the address on the form. If you should have
further questions, please contact the administrator directly
at 0-000-000-0000.
F. LEGAL SERVICES
Your coverage under this plan ends on your last day of
employment.
G. LIFE INSURANCE PLANS
Coverages under the Core Life Insurance Plan (Basic Life and
Life Plus) will end on your last day of employment.
You may be converted to an individual policy with CIGNA by
completing a Conversion Application within 31 days of your
termination date and including the first premium with your
application. Contact your Human Resources Generalist, or the
Home Office Benefits Department to obtain a Conversion
Application (HMRE 0465).
If you are participating in the Group Universal Life Plan
(GULP) and want to continue coverage, you must contact CIGNA
directly at 0-000-000-0000 (Pennsylvania residents call
0-000-000-0000).
H. SHORT-TERM DISABILITY PLAN
Coverage under the Short-Term Disability Plan will end on
your last day of employment. If you are receiving benefits
under the Plan at the time of separation, benefits will
continue until the earlier of:
1) The date the disability ceases;
2) the date which marks the end of the normal
recovery time for the disability, as determined
pursuant to generally accepted medical
practices;
3) the date you refuse to undergo medically
necessary treatment or a required medical
evaluation;
4) the date you or your physician does not provide
required medical or other information; or
5) The completion of the maximum benefit period.
I. LONG-TERM DISABILITY PLAN
Coverage under the Long-Term Disability Plan will end on your
last day of employment, unless on that date you are disabled
due to illness or injury. If you remain continuously disabled,
upon completion of the 180-day elimination period, you may
file for Long-Term Disability benefits.
If you are receiving Long-Term Disability benefits as of your
last day of employment or subsequently become eligible after
completion of an elimination period which began on or before
that date, you will receive Long-Term Disability benefits:
1) Until the disability ceases, or
2) The completion of the Maximum Disability Period.
J. LONG TERM CARE
You may continue your Long-Term care coverage by paying
premiums directly to Aetna. For information about continuing
your coverage, call 0-000-000-0000.
K. MEDICAL/HMO (IF OFFERED)/DENTAL PLANS
Unless otherwise agreed or retire directly from active
service, coverage you are receiving under the Plans at the
date of termination will continue up to 60 consecutive days
after your last day of employment, at the current active
employee contributory rate, provided you pay the premium.
Following is the total cost of this extension for you based on
the coverage you have elected for yourself and any covered
dependents:
1) Medical/HMO: $323.78
2) Dental: $48.62
Attached is a Continuation of Benefits Election Form which
must be completed and returned with your signed separation
agreement. This will allow USF&G to automatically deduct the
above stated premiums from your lump sum severance check for
your continuation of coverage.
If you elect to continue your benefits for the 60 day
extension period, you may thereafter continue your coverage
under the COBRA provisions of the plan. Under COBRA you will
pay the full cost of the plan (Company plus employee
contributions), plus a 2% administration charge, for an
additional 18 months following the 60 day extension. COBRA
continuation for employees and dependents generally will cease
on the earliest of the following dates:
- 18 months from the date the 60 day extension period ends,
- the date a covered person becomes covered under another
group health plan, if the new group health plan does
contain a limitation regarding pre-existing conditions,
- the date the covered person becomes entitled to Medicare,
- the date the plan terminates, or
- the date you fail to pay any required contributions.
Please take note:
If you elect not to have these premiums for the 60 day
extension of benefits automatically deducted
or
If you fail to return the Continuation of Benefits form with
your signed separation agreement,
your option to extend your benefits at the current active
employee contributory rate for the 60 day period will be
permanently waived. If you waive your extension period, you
may only continue your coverage under the COBRA continuation
coverage provisions of the plan. Under COBRA, you will pay the
full cost (Company plus employee), plus a 2% administration
charge, for up to 18 MONTHS FOLLOWING YOUR TERMINATION DATE
FROM USF&G.
If COBRA continuation coverage is elected, approximately 60
days prior to the termination of the 18 month COBRA extension
period, you will receive conversion information from CIGNA for
the Medical Coverage. There is no conversion under the Dental
Plan.
L. PENSION PLAN
Consistent with the existing Plan, a vested employee is
eligible for an accrued benefit from the Company's Pension
Plan at age 65, or at any time after age 55, if he or she has
10 years of service under the Plan.
M. PERSONAL FINANCIAL PLANNING
Any services you have elected under this plan will remain in
effect until the end of the calendar year, and you will be
billed for any balance due.
N. SCHOLARSHIP PROGRAMS
Dependent children currently receiving monies through the
National Merit Scholarship Program or the USF&G Foundation
Scholarship Program will continue to receive their scholarship
awards as long as they maintain their grade averages and send
in transcripts as required by the Programs.
O. TUITION REFUND
If a previously approved course is begun prior to your last
day of employment but completed AFTER that date, you will be
reimbursed 100% for the course regardless of the final grade.
If you received an advance, we will reimburse that portion of
the advance that you have repaid through payroll deduction.
(You will then be effectively 100% reimbursed for the course.)
You will need to show proof of enrollment and payment for the
course in order to receive the tuition reimbursement. However,
in this case, proof of the final grade need not be submitted.
If a course is completed BEFORE your last day of employment,
you will be reimbursed for all or part of the tuition
depending on the final grade.
To receive reimbursement for a course completed BEFORE your
last day of employment, you must submit an Application for
Tuition Reimbursement (Hum. Res. 256), receipts for tuition,
and a grade report.
If you cancel your enrollment in a course as a result of
being separated, any money not refunded by the educational
institution will be reimbursed by the Company.
P. MATCHING GIFTS
Under the Company's Matching Gifts program, the Company will
only match contributions made prior to your last day of
employment. Under the current program, however, retirees
continue to be eligible to have their gifts matched by the
Company.
Q. VACATION/FLOATING HOLIDAYS/PERSONAL DAY
As indicated above, any unused vacation time, floating
holidays, and personal days as of your last day of employment
will be paid, subject to applicable withholdings and taxes.
Employees electing retirement will also be eligible for the
Retiree Vacation Allowance.
R. UNEMPLOYMENT INSURANCE
You may be eligible for Unemployment Benefits. It is important
to contact the appropriate State Unemployment Office to apply
for benefits.
III. MISCELLANEOUS
A. CONDITION TO REHIRE
If after your last day of termination and after receipt of
severance pay you accept a job within the Company, on the
first day back to work, you must pay the Company for any
outstanding severance. For example, an employee who worked
10 years for the Company separates and receives 20 weeks'
severance pay, but 3 weeks after receipt of the payment
another job is accepted within the Company. On the employee's
first day of rehire, he or she owes the Company 17 weeks'
severance. Also upon rehire, you must either pay back payment
for vacation days, floating holidays, and/or personal days and
be credited with the days, or choose to keep the payment and
lose the credit for vacation, floating holidays, and personal
days for that period of time.
B. BRIDGING OF SERVICE
With the exception of the Pension, Capital Accumulation, and
Stock Option Plans, service will be bridged only if you are
rehired within 60 days of separation. In that case, the
original date of hire will be used for all Benefit Plans and
the time away from the office will be counted as a LEAVE OF
ABSENCE.
If you are not rehired within the 60 day period, an adjusted
hire date is established.
Consistent with the Retirement Pension Plan and Capital
Accumulation Plans, if you have a break in service before you
become vested and are later re-employed, your prior service
may be reinstated. Whether or not your service will be
reinstated will depend on the length of your break in service
and the number of years of prior service. If you are later
re-employed, please contact the Human Resources Service Center
(HRSC) at 1-800-695-HRHR for more information on the service
crediting rules.
Unvested stock options will be canceled following a break in
service longer than 60 days.
C. EMPLOYEE REFERRAL PLAN
You are only eligible to receive an employee referral award as
long as you and the referred employee are still on payroll.
Therefore, once an employee separates, even if the referral
was made prior to separation, he or she will not be eligible
for the award.
D. INDEBTEDNESS TO COMPANY
If you owe any monies to the Company (loans, travel advances,
etc.) you must make arrangements to settle this debt. You also
must make arrangements to return your USF&G identification
card and all other company property (such as keys, credit
cards, equipment, and files) before your last day of
employment.
X. ADDRESS CHANGE
The Company may need to contact you or forward mail after your
last day of employment, and retains current addresses for
employees who are vested in the Pension Plan. Notice of any
change of address should be addressed to USF&G Corporation,
Human Resources Benefits, Founders Building, 0000 Xxxxxxxxxx
Xxx, Xxxxxxxxx, Xxxxxxxx 00000.
CONTINUATION OF BENEFITS
ELECTION FORM
If you have elected to continue the Benefit Plans you are currently
participating in after your termination with the Company, please mark the "yes"
column. USF&G will automatically deduct the total premium amount listed below
from your lump sum severance check on a POST-TAX basis.
If you were participating in both the Medical and Dental plans at the time of
your termination, please note that you must continue both your Medical and
Dental benefits for the 60 day continuation. You cannot choose one without the
other.
Yes, I plan to extend my (our) benefits for 60 days and agree to have the total
premium listed below deducted from my lump sum severance check:
Medical Plan: $323.78
Dental Plan: $48.62 TOTAL PREMIUM: $372.40 |_|
If you do NOT intend to continue your Benefit Plans , please mark the space
below. PLEASE NOTE THAT BY MARKING THE SPACE BELOW YOU ARE WAIVING THE 60 DAY
EXTENSION OF COVERAGE AT THE CURRENT ACTIVE EMPLOYEE RATE, BUT YOU ARE NOT
WAIVING YOUR RIGHT TO ELECT COBRA CONTINUATION COVERAGE. YOU ARE STILL ELIGIBLE
FOR COBRA BENEFITS AND WILL RECEIVE A COBRA NOTIFICATION AND ELECTION FORM UNDER
SEPARATE COVER.
No, I do not plan to extend my benefits for 60 days |_|
Once received at USF&G this election is irrevocable. If you have any questions,
please contact Xxxxxxx Xxxxxx at (000) 000-0000.
NAME: XXXX X. XXXXXX
SOCIAL SECURITY NO.: ________________
DATE: OCTOBER 14, 1997
