CHANGE OF CONTROL AGREEMENT
Agreement is made this ___ day of _________________, 1997 between Chartwell Re
Holdings Corporation (Chartwell) and ___________________________________.
WHEREAS, _________________________________________ is employed by Chartwell; and
WHEREAS, Chartwell desires to retain the services of in the event of a Change of
Control (as defined herein) of Chartwell's parent, Chartwell Re Corporation
(Chartwell Re);
NOW THEREFORE, in consideration of the agreements and provisions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows.
1. Term of Agreement. This Agreement shall commence on the date hereof and shall
continue in effect thereafter, unless, not later than any September 30,
Chartwell shall have given notice that it will not extend this Agreement beyond
the ensuing December 31; provided, further, that, notwithstanding any such
notice by Chartwell to terminate, if a change of control shall have occurred
during the term of this Agreement, this Agreement shall continue in effect for a
period of twenty-four (24) months beyond the date on which the change of control
occurs.
2. Change of Control of Chartwell Re. No benefits shall be payable unless there
is a change of control (Change of Control) of Chartwell Re. A Change of Control
shall be deemed to have occurred if:
(a) any "person" (as defined in Section 3(a) (9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and as such term
is modified in Sections 13(d) and 14(d) of the Exchange Act), excluding
Chartwell Re or any of its subsidiaries, a trustee or any fiduciary
holding securities under an employee benefit plan of Chartwell Re or
any of its subsidiaries, an underwriter temporarily holding securities
pursuant to an offering of such securities or a corporation owned,
directly or indirectly, by stockholders of Chartwell Re in
substantially the same proportions as their ownership of Chartwell Re,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of Chartwell
Re (not including in the securities beneficially owned by such person
any securities acquired directly from Chartwell Re or its affiliates)
representing 50% or more of the combined voting power of Chartwell Re's
then outstanding securities; or
(b) during any period of not more than two 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, other than a director designated by a person who
has entered into an agreement with Chartwell Re to effect a transaction
described in this Section 2 whose election by the Board or nomination
for election by Chartwell Re's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(c) the shareholders of Chartwell Re approve a merger or consolidation
of Chartwell Re with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of Chartwell
Re outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee
benefit plan of Chartwell Re or Chartwell, at least 50% of the combined
voting power of the voting securities of Chartwell Re or such surviving
entity outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a recapitalization
of Chartwell Re (or similar transaction) in which no person acquires
more than 50% of the combined voting power of Chartwell Re's then
outstanding securities; or
(d) the shareholders of Chartwell Re approve a plan of complete
liquidation of Chartwell Re or an agreement for the sale or disposition
by Chartwell Re of all or substantially all Chartwell Re's assets.
3. Termination Following Change of Control. If any of the events described in
Section 2 above constituting a Change of Control shall have occurred, you shall
be entitled to the benefits provided in Section 4 hereof upon termination of
your employment with Chartwell during the two year period following the Change
of Control unless such termination is (A) a result of your death or retirement,
or (B) your resignation for other than Good Reason, or (C) your being terminated
by Chartwell for Disability or for Cause.
(a) Cause. For purposes of this Agreement, "Cause" shall mean your
willful breach of duty in the course of your employment, or your
habitual neglect of your employment duties.
(b) Disability. For purposes of this Agreement, "Disability" shall mean
your absence from your duties with Chartwell for three hundred
sixty-five (365) consecutive days as a result of your physical or
mental illness.
(c) Good Reason. You shall be entitled to terminate your employment for
Good Reason. For the purpose of this Agreement, "Good Reason" shall
mean the occurrence of any of the following circumstances:
(i) the assignment to you of any duties inconsistent
with your status as (or any higher position to which you have
been promoted at the time) or a substantial diminution in the
nature or status of your responsibilities from those in effect
immediately prior to the Change of Control;
(ii) a reduction in your annual base salary as in
effect on the date of the Change of Control;
(iii) the relocation of the office in which you are
located prior to the Change of Control to a location more than
sixty (60) miles from New York City, except for required
travel on the business of Chartwell to an extent substantially
consistent with your present business travel obligations;
(iv) Chartwell selective refusal to permit your
continued participation in any incentive compensation, bonus,
stock option or stock ownership plans in which you
participated prior to the Change of Control, unless an
equitable alternative compensation arrangement has been
provided for you, or the failure by Chartwell to continue your
individual participation in any such incentive plans on the
same basis as existed at the time of the Change of Control;
(v) except as required by law, the failure by
Chartwell to continue to provide you with benefits at least as
favorable as those enjoyed by you under the employee benefit
and welfare plans of Chartwell in which you were participating
at the time of the Change of Control or the taking of any
action by Chartwell which would materially reduce any of
benefits enjoyed by you at the time of the Change of Control;
(vi) the failure of Chartwell to obtain a
satisfactory agreement from any successor to assume and agree
to perform this Agreement, as contemplated in Section 5
hereof; or
(vii) any purported termination of your employment
not effected pursuant to a Notice of Termination satisfying
the requirements of Section 3(d) below; for purposes of this
Agreement, no such purported termination shall be effective.
Your continued employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason hereunder.
(d) Notice of Termination. Any termination of your employment by
Chartwell or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6
hereof. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice indicating the specific termination provision in this
Agreement relied upon and setting forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(e) Date of Termination, Etc. "Date of Termination" shall mean
thirty (30) days after the date specified in the Notice of Termination.
4. Compensation Upon Termination. Following a Change of Control of Chartwell Re,
as defined herein, upon termination of your employment by (a) Chartwell other
than for Cause or (b) by you for Good Reason, you shall be entitled to benefits
as set forth in this Section 4:
(a) Chartwell shall pay you a severance payment (the "Severance
Payment") equal to [one years'/six months'[ full base salary at your
highest rate in effect during the twenty-four (24) months preceding
the date on which the Notice of Termination is given;
(b) For a[twelve (12)/six (6) month] period after termination of your
employment, Chartwell shall arrange to provide you with life, medical
and dental insurance benefits substantially similar to those which you
are receiving or entitled to receive immediately prior to the Notice of
Termination, unless you are eligible to receive such benefits from a
subsequent employer or a spouse's employer;
(c) Chartwell shall pay you the Severance Payment no later than the
fifth day following the Date of Termination;
(d) If the amount of the Severance Payment would result in the
assessment of a tax (Excise Tax) imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, the Severance Payment shall
be reduced to an amount which would not result in the assessment of an
Excise Tax.
5. Successors; Binding Agreement. Chartwell will require any successor to all or
substantially all of the business and/or assets of Chartwell to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Chartwell is required to perform it. Failure of Chartwell to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to compensation from
Chartwell in the same amount and on the same terms as you would be entitled to
if you had terminated your employment for Good Reason following a Change of
Control of Chartwell Re, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed the Date
of Termination. All references to Chartwell shall be deemed to include its
successors.
(a) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you die
while any amount is payable to you hereunder, all such amounts shall be
paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there is no such designee, to your
estate.
6. Notice. 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 on the first page of this Agreement, provided
that all notices to Chartwell shall be directed to the attention of the Office
of the Vice President and General Counsel of Chartwell, 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.
7. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by both parties. No waiver by either party at any time of any breach
by the other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or any prior or subsequent time. No agreements or
representations, oral or written, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Connecticut. All references to sections of the Code shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law.
8. 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.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year first written above.
Chartwell Re Holdings Corporation
By:_________________________ By:___________________________
