EXHIBIT 10.1
Letter Agreement between ProAssurance and Xxxx Xxxxxxxxxx, dated November 4,
2005.
November 4, 2005
Xxxx X. Xxxxxxxxxx
MEEMIC Insurance Company
000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Dear Xxxx:
ProAssurance Corporation ("PRA") and MEEMIC Holdings, Inc. ("Holdings") are
in the process of negotiating a proposed transaction (the "Transaction") that
will involve the sale of all of the stock of MEEMIC Insurance Company and MEEMIC
Insurance Services Corporation (the "Companies") to Motors Insurance Company
("Buyer"). Because of your knowledge of and experience with the financial and
business operations of the Companies, PRA and Holdings have requested your
cooperation and assistance in negotiating and effecting the Transaction. In
connection therewith, PRA and Holdings agree to pay you a success fee on the
following terms and conditions.
Subject to the conditions herein set forth, PRA will pay you a success fee
in a total amount equal to two times your current base salary of $285,000 per
annum (the "Success Fee") in two installments with the first installment in the
amount of $285,000 due promptly after the closing of the Transaction (the
"Closing") and the second installment in the amount of $285,000 due 18 months
following the Closing if you are still employed by either of the Companies or by
Buyer or its affiliate; provided, however, that the second installment will
become immediately due and payable if you should become entitled to severance
compensation under the terms of the Release and Severance Compensation Agreement
dated June 15, 2001, among you, PRA, Holdings and MEEMIC Insurance Company (the
"Severance Agreement"). Notwithstanding the foregoing, PRA will pay you the full
amount of your Success Fee at Closing if and on the condition that prior to
Closing you agree in writing to terminate your Severance Agreement and to
release the Companies, Holdings, and PRA from their respective obligations
thereunder effective on the date of Closing.
The obligation of PRA to pay the Success Fee is subject to and conditioned
upon the closing of the Transaction and upon your compliance with the following
covenants:
1. You shall cooperate and assist PRA, Holdings and the Companies in the
negotiation of the Transaction documents; the due diligence relating to the
Transaction; the requests for third party consents to the Transaction; and the
filings relating to all necessary governmental approvals for the Transaction.
2. You shall review the terms and provisions of the Stock Purchase
Agreement to be executed as of October 31, 2005, by and among Buyer, Holdings,
PRA and the Companies (the "Stock Purchase Agreement") and the Companies'
Disclosure Schedule delivered to Buyer as required under the Stock Purchase
Agreement (the "Disclosure Schedule"); and you shall provide your written
certification to PRA (included herein) that you have reviewed the Stock Purchase
Agreement and Disclosure Schedule and that to the best of your knowledge after a
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reasonable investigation, the representations and warranties in Article II of
the Stock Purchase Agreement, when read together with the Disclosure Schedule
are true, correct and complete.
3. You shall review the updated Disclosure Schedule as and when prepared
and delivered to Buyer as required under the Stock Purchase Agreement and
provide your written certification to PRA that to the best of your knowledge
after a reasonable investigation, the updated Disclosure Schedule is true,
correct and complete.
In consideration of PRA's agreement to pay you the Success Fee as provided
herein:
(a) You hereby certify to PRA and Holdings that you have reviewed the
most recent draft of the Stock Purchase Agreement and Disclosure Schedule (dated
November 1, 2005) and that the representations and warranties set forth in
Article II of said Stock Purchase Agreement when read in conjunction with the
Disclosure Schedule are true, accurate and complete.
(b) If you should be entitled to severance compensation under the
Severance Agreement, you agree that the Success Fee will not be treated as bonus
compensation for purposes of calculating the amount of your severance
compensation under the terms of the Severance Agreement, and you agree that the
Success Fee can be included in the calculation of the limitation on severance
compensation under paragraph 3 of the Severance Agreement if and to the extent
that the Success Fee constitutes a "parachute payment" under Section 280G of the
Internal Revenue Code of 1986, as amended.
If the foregoing is acceptable to you, please indicate your acceptance and
agreement to the terms of this letter and your certification as herein required
by executing a copy of this letter in the space provided below.
Sincerely,
/s/ Xxxxxx X. Xxxx, Xx.
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Xxxxxx X. Xxxx, Xx.
Senior Vice President and
Chief Financial Officer
ACCEPTED, AGREED and CERTIFIED by the
undersigned on this 4th day of November, 2005:
/s/: Xxxx X. Xxxxxxxxxx
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by: Xxxx X. Xxxxxxxxxx
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