EXHIBIT 10.37
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into this the 15th day of August 2006, by
and between Xxxxxxx X. Xxxx ("Employee"), a citizen and resident of Davie
County, North Carolina, and Triad Guaranty Inc., Triad Guaranty Insurance
Corporation and Triad Guaranty Assurance Corporation (collectively referred to
as "Company");
WHEREAS, Employee is currently employed by the Company as Executive Vice
President of Company and a Director of Triad Guaranty Insurance Corporation and
Triad Guaranty Assurance Corporation; and
WHEREAS, by the execution of this Agreement, Employee will resign as an
officer, director and employee of Company effective August 31,2006; and
WHEREAS, Company desires to re-employ Employee for a period commencing on
September 1, 2006 and terminating on January 15, 2007 as a permanent part time
employee; and
WHEREAS, Company and Employee mutually desire to terminate the Employment
Agreement dated January 1, 1997, First Amendment dated April 5, 2000 and Second
Amendment dated August 3, 2005 (together the "Prior Agreement") and mutually
desire that this Agreement specifically supersedes the Prior Agreement and that
neither the Employee nor Company has any obligation under the Prior Agreement;
and
WHEREAS, in consideration of the mutual covenants hereinafter contained,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
I.
Employee hereby resigns as Executive Vice President of Company and a
Director of Triad Guaranty Insurance Corporation and Triad Guaranty Assurance
Corporation effective August 31, 2006.
II.
Employee and Company mutually agree to terminate the Prior Agreement and
mutually desire that this Agreement specifically supersedes the Prior Agreement
and neither the Employee nor Company has any obligation under the Prior
Agreement.
III.
In consideration of Employee's execution of this Agreement, Company will
provide Employee the following benefits:
Upon the expiration of the seven (7) day period described in Section X (c)
of this Agreement (the "Effective Date"), Company will be obligated to pay
Employee as follows:
1. Beginning September 1, 2006 and continuing until the end of the term of
his employment, Employee will be paid by the hour at the rate of $240/hr.
for hours actually worked at the request of the Company. These sums will be
paid on semi-monthly pay periods as the Company's usual practice. All
payments will be subject to required federal and state withholding.
2. Employee's 2006 cash bonus, if any, will be pro-rated through August 31,
2006 payable as the Company's usual practice in the first quarter of 2007.
If Employee qualifies for COBRA at the time of resignation (not covered by
another group plan) he may elect to continue these benefits for up to eighteen
(18) months or until he no longer qualifies under COBRA at his own expense.
Employee will be entitled to convert his group life insurance policy to an
individual policy, which said individual policy will be paid for solely by
Employee and with no contribution from Company.
Employee's contribution to the Company's 401 (K) plan with Company match,
if any, will terminate effective August 31, 2006.
Employee's participation in the Company Employee Stock Purchase Plan, with
Company contribution, if any, will terminate effective August 31, 2006.
IV.
Employee is not eligible to participate in the following Company benefits:
1. Short term disability insurance
2. Long term disability insurance
V.
Other than the payments and benefits provided for in Section III above,
Company shall have no obligation to make any payments to or for the benefit of
Employee or to provide any benefits of any kind available to employees of
Company, and Employee expressly releases Company of and from any obligation to
make any other payments or provide any benefits related to his employment by
Company; provided, however, that this Agreement will not effect benefits which
are vested during the term of employment. It is also acknowledged that the
payments in Section III above include and are not in addition to severance, if
any, to which Employee is entitled under Company policy.
VI.
During the term of this Agreement and for a period of six (6) months after
the termination of this Agreement by the Company or Employee, Employee shall
remain an "Insider" with respect to the Company and will be subject to the
Company Xxxxxxx Xxxxxxx Policy.
VII.
During the term of this Agreement and for a period of two (2) years after
the termination of this Agreement by the Company or Employee, Employee shall
not, either as an individual on his own account; as a partner, joint venturer,
employee, agent, or salesman for any person; as an officer, director or
stockholder (other than a beneficial holder of not more than 5% of the
outstanding voting stock of a company having at least 250 holders of voting
stock) of a corporation; or otherwise, directly or indirectly:
1. Solicit, recruit or hire any person who is, or has been during the
preceding six (6) months, an employee or agent of the Company, either
now or during such period, for employment.
2. Engage as a consultant to, or employee or agent of, any mortgage
insurer, financial institution or other mortgage service provider
which competes, directly or indirectly, with the Company.
Employee and the Company agree and acknowledge that the Company does
business on a nationwide basis, with customers located throughout the United
States, and that any breach by Employee of the restrictive covenant contained
herein would immeasurably and irreparably damage the Company. Employee and the
Company agree and acknowledge that the duration, scope and geographic areas
applicable to the restrictive covenant in this Section VII are fair, reasonable
and necessary to protect legitimate business interests of the Company and that
adequate compensation has been received by Employee for such obligations.
VIII.
This Agreement and Employee's employment hereunder shall terminate
immediately upon Employee's death. In such event, the Employee's beneficiary
will have all rights and privileges as set forth in the 1993 Long Term Stock
Incentive Plan with respect to exercising Employee's stock options.
IX.
(a) Employee, for himself and his heirs, executors, administrators, successors,
and assigns (collectively referred to hereafter in the Agreement as "Releasors")
hereby release, acquit and forever discharge Company, together with any
affiliated or subsidiary corporations, and their respective present and former
officers, directors, employees and agents (collectively referred to hereafter in
the Agreement as "Releasees"), and their respective executors, administrators,
successors, and assigns of and from all claims whether or not previously
asserted against Releasees. This release specifically includes all claims by or
on behalf of Releasors against Releasees, together with any and all claims,
which might have been asserted by or on behalf of Releasors against Releasees in
any suit, claim or charge on account of any matter or things whatsoever up to
and including the date of the execution of the Agreement. Releasors further
agree that they will not institute or be a party to, whether directly or
indirectly, any civil action against Releasees under any federal, state or local
authority or any common law theory (whether founded in tort or in contract),
including but not limited to, 42 U.S.C. ss. 1981, Title VII of the Civil Rights
Act of 1964, the Equal Pay Act of 1963, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act, the Americans With Disabilities Act, the North
Carolina Handicapped Persons Protection Act, the Employee Retirement Income
Security Act of 1974, the Family and Medical Leave Act, or any similar
legislation, constitutional provision, executive order or regulation, or any
common law theory (whether founded in tort or contract) in connection with any
act, state of facts, or occurrence or omission, whether or not previously
asserted, either occurring before or existing on the date of the execution of
this Agreement.
(b) It is understood that the benefits provided hereunder by Company to
Employee are substantially in excess of severance benefits, which would be
provided to him in the absence of the release of claims contained herein.
Employee acknowledges such substantial and additional consideration and further
acknowledges that he has received sufficient consideration for his execution of
this Agreement specifically including, but not limited to, the release of claims
contained herein.
(c) In the event of the initiation of any proceeding by Releasors against
any of Releasees asserting a claim released by this Section IX, Releasees shall
be entitled to plead this release in bar to any such claim and to assert a
counterclaim against any such Releasors alleging breach of this Agreement.
Releasors shall indemnify and hold harmless Releasees of and from any and all
loss or damage whatsoever, costs, direct and indirect, and attorneys' fees
incurred in the defense of such proceeding and prosecution of counterclaim.
(d) Notwithstanding the above, Releasors will not be penalized in any
manner for bringing an action that challenges the validity of the waiver of
claims under the Age Discrimination in Employment Act and/or the Older Workers
Benefit Protection Act ("the ADEA waiver"). In the event that Releasors
successfully challenge the ADEA waiver and prevail on the merits of their claims
under the ADEA, Releasees will be entitled to offset any recovery by amounts
already paid under this Agreement. In the event that Releasees prevail in
Releasors' challenge to the ADEA waiver or on the merits of Releasors' ADEA
claim, Releasees will be entitled to any and all remedies provided by law.
X.
Employee agrees to fully cooperate with Company in assisting in the defense of
any existing or future charges, claims, demands, complaints or law suits filed
against Company that involve facts or decisions in which he had input or
knowledge.
XI.
Employee acknowledges and agrees that he will never disclose to anyone any of
Company's trade secrets or confidential or proprietary information.
XII.
Employee specifically acknowledges the following:
(a) That he has been given at least twenty-one (21) days in which to
consider this Agreement;
(b) That he is advised in writing that he has the right and may consult
with an attorney before executing this Agreement and acknowledges that he has
had the opportunity to consult with an attorney;
(c) That he has seven (7) days following his execution of this Agreement to
revoke this Agreement. To revoke this Agreement, Employee should advise Company,
and specifically Xxxx X. Xxxx, General Counsel, in writing of his decision to
revoke it at or before the conclusion of the seven (7) day period;
(d) That he recognizes that he is specifically releasing, among other
claims, any claims under the Age Discrimination in Employment Act of 1967 and
all amendments thereto;
(e) That he is not waiving rights or claims that may arise after the date
that this Agreement is executed.
XIII.
Employee represents that no promise, inducement or agreement not herein
expressed has been made to him, and that this Agreement is the entire agreement
between the parties hereto.
XIV
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors and
assigns.
XV.
(a) In the event of a breach or alleged breach of the Agreement by Company,
Employee's sole remedy shall be to institute an action for breach of this
Agreement and damages therefor or specific performance of this Agreement. In the
event that Employee prevails in an action against Company for a breach or
alleged breach of this Agreement, he shall be entitled to recover his attorneys'
fees and costs together with such other legal and equitable relief as the court
shall allow.
(b) In the event of a breach of this Agreement by Employee, Company shall
be entitled to immediately cease any further payments to or for the benefit of
Employee and to demand the return of all payments made after August 31, 2006. In
the event that Company institutes legal action against Employee on account of a
breach or alleged breach of this Agreement, Company shall be entitled to recover
all amounts paid pursuant to this Agreement to which Employee was not entitled
in the absence of this Agreement and to recover its attorneys' fees and costs
together with such other legal and equitable relief as the court shall allow. IN
THE EVENT THAT EMPLOYEE BROUGHT CLAIMS UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OR THE OLDER WORKERS BENEFIT PROTECTION ACT, THE PROVISIONS OF
SECTION IX (d) WILL APPLY.
XVI.
Employee will not, directly or indirectly, make or publish any disparaging
remarks to anyone (specifically including but not limited to parties with a
business relationship with Releasees) about or regarding any of Releasees.
XVII.
Employee acknowledges that he has carefully read this Agreement and knows and
understands its contents. Employee further certifies that his signing of this
Agreement acknowledges his intent to be bound by the provisions of this
Agreement.
XVIII.
The Parties agree that if any provision or part of this Agreement is deemed to
conflict with superseding federal or state law, such provision or part shall be
deleted from the Agreement and the remainder of the Agreement shall remain in
full force and effect.
XVIX.
This Agreement shall be construed in accordance with the laws of the state of
North Carolina.
This the 15th day of August, 2006.
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/s/ Xxxxxxx X. Xxxx (SEAL)
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Xxxxxxx X. Xxxx
TRIAD GUARANTY INC.
TRIAD GUARANTY INSURANCE CORPORATION
TRIAD GUARANTY ASSURANCE CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
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