EXHIBIT 10.10
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (this "Agreement") is made by
and between Assurant, Inc. (the "Company") and Xxxxx Xxxxxxx (the "Executive"),
an officer of the Assurant Solutions Division (as defined in Section 1(d)
below), and is effective as of the 1st day of January, 2005.
The Executive's Multiplier (as defined in Section 1(f) below) is 3.
The Board of Directors of the Company (the "Board"), has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control and to encourage
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change in Control, and to provide Executive
with compensation and benefits arrangements upon a Change in Control which
ensure that the compensation and benefits expectations of Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH HEREIN, THE PARTIES
AGREE AS FOLLOWS:
1. Certain Definitions. Each of the following terms, when used in this
Agreement, has the meaning set forth below:
(a) "Agreement Term" means the period of time beginning on the date of
this Agreement and ending on December 31, 2005, unless this
Agreement has been previously terminated as provided in Section
10(f). The Company may in its complete and sole discretion, at any
time and from time to time, extend the Agreement Term by giving a
written notice to the Executive; provided, however, that if an
agreement has been executed by the Company or any of its affiliates
that contemplates a transaction that will be a Change in Control
when consummated, the Agreement Term will be automatically extended
until the earlier of the date of such consummation or the
termination of such agreement prior to any such consummation.
(b) "Change in Control" means any one of the following events:
(i) individuals who, on the date of this Agreement, constitute the
Board of Directors of the Company (the "Incumbent Directors")
cease for any reason to constitute at least a majority of such
Board, provided that any individual becoming a director after
the date of
this Agreement and whose election or nomination for election
was approved by a vote of at least a majority of the Incumbent
Directors then on the Board shall be an Incumbent Director;
provided, however, that no individual initially elected or
nominated as a director of the Company as a result of an
actual or threatened election contest with respect to the
election or removal of directors ("Election Contest") or other
actual or threatened solicitation of proxies or consents by or
on behalf of any Person other than the Board ("Proxy
Contest"), including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest, shall
be deemed an Incumbent Director; or
(ii) any Person becomes, after the date of this Agreement, a
"beneficial owner" (as defined in Rule 13d-3 under the 0000
Xxx) of either (A) 30% or more of the then outstanding shares
of common stock of the Company ("Company Common Stock") or (B)
securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding
securities entitled to vote for the election of directors (the
"Company Voting Securities"); provided, however, that for
purposes of this subsection 1(b)(ii), the following
acquisitions of Company Common Stock or Company Voting
Securities shall not constitute a Change in Control: (1) an
acquisition directly from the Company; (2) an acquisition by
the Company or a Subsidiary of the Company; (3) an acquisition
by a Person who is on the date of this Agreement the
beneficial owner, directly or indirectly, of 50% or more of
the Company Common Stock or the Company Voting Securities; (4)
an acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary of
the Company; or (5) an acquisition pursuant to a
Non-Qualifying Transaction (as defined in subsection 1(b)(iii)
below); or
(iii) the consummation of a reorganization, merger, consolidation,
statutory share exchange or similar form of corporate
transaction involving the Company or a Subsidiary (a
"Reorganization"), or the sale or other disposition, directly
or indirectly, of all or substantially all of the Company's
assets (a "Sale") or the acquisition of assets or stock of
another corporation (an "Acquisition"), unless immediately
following such Reorganization, Sale or Acquisition: (1) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Company
Common Stock and outstanding Company Voting Securities
immediately prior to such Reorganization, Sale or Acquisition
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and
the combined voting power of the
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then outstanding voting securities entitled to vote generally
in the election of directors, as the case may be, of the
corporation resulting from such Reorganization, Sale or
Acquisition (including, without limitation, a corporation that
as a result of such transaction owns the Company or all or
substantially all of the Company's assets or stock either
directly or through one or more subsidiaries, the "Surviving
Corporation") in substantially the same proportions as their
ownership immediately prior to such Reorganization, Sale or
Acquisition of the outstanding Company Common Stock and the
outstanding Company Voting Securities, as the case may be; and
(2) no Person (other than (A) the Company or any Subsidiary of
the Company, (B) the Surviving Corporation or its ultimate
parent corporation, or (C) any employee benefit plan (or
related trust) sponsored or maintained by any of the
foregoing) is the beneficial owner, directly or indirectly, of
30% or more of the total common stock or 30% or more of the
total voting power of the outstanding voting securities
eligible to elect directors of the Surviving Corporation, and
(3) at least a majority of the members of the board of
directors of the Surviving Corporation were Incumbent
Directors at the time of the Board's approval of the execution
of the initial agreement providing for such Reorganization,
Sale or Acquisition (any Reorganization, Sale or Acquisition
that satisfies all of the criteria specified in (1), (2) and
(3) above shall be deemed to be a "Non-Qualifying
Transaction"); or
(iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company; or
(v) Fortis acquires any additional Company Common Stock or Company
Voting Securities without approval of the Assurant, Inc. board
of directors; or
(vi) Any event that results in the Division no longer being
controlled, directly or indirectly, by Assurant, Inc.;
provided, however, that (1) a sale of the Division's
investment assets in the ordinary course of business,
including, without limitation, any sale of assets in
connection with financial reinsurance shall not be a Change in
Control; (2) the liquidation, termination of operations or
other winding down of the Division shall not be a Change in
Control; and (3) the final and binding determination of
whether a Change in Control of the Division has occurred for
purposes of this Agreement shall be made by the Board of
Directors of the Company acting in good faith.
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For purposes of determining whether a Change in Control has occurred
pursuant to Section 1(b)(iii), the assets of the Company shall not
include any assets that the Company is required to maintain on its
consolidated GAAP balance sheet that are the subject of reinsurance
ceded to third parties and result in an approximate offsetting
liability on such balance sheet.
(c) "Disability" has the same meaning as provided in the long-term
disability plan or policy maintained by the Company or if
applicable, most recently maintained, by the Company or if
applicable, an affiliate of the Company, for the Executive, whether
or not the Executive actually receives disability benefits under
such plan or policy. If no long-term disability plan or policy was
ever maintained on behalf of the Executive, Disability means
Permanent and Total Disability as defined in Section 22(e)(3) of the
Code. In the event of a dispute, the determination whether the
Executive is Disabled will be made by the Board and may be supported
by the advice of a physician competent in the area to which such
Disability relates.
(d) "Fortis" means Fortis SA/NV, a public company established as a
societe anonyme/naamloze vennootschap under the laws of Belgium, and
Fortis N.V., a public company established as a naamloze vennootschap
under the laws of The Netherlands, and their affiliates other than
the Company and its Subsidiaries.
(e) "GAAP" means U.S. generally accepted accounting principles
consistently applied.
(f) "Multiplier" means the number set forth in the second paragraph of
this Agreement; provided however, that if the Executive has, prior
to the CIC Date, publicly announced his or her Retirement or
voluntary termination of employment, the Multiplier will be a
fraction with the numerator equal to the remaining whole or partial
months between the Date of Termination of employment and the
effective date of such announced Retirement or voluntary termination
of employment, and with the denominator equal to 12, but in no event
shall such fraction be equal to a number greater than the number set
forth in the second paragraph of this Agreement.
(g) "Person" means any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
(h) "Retirement" means retirement as defined in the Company's
then-current tax qualified defined benefit pension plan, or if there
is no such retirement plan, Retirement means voluntary termination
of employment after age 55 with ten or more years of service, or
after age 65 with five or more years of service.
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(i) "Subsidiary" means any corporation, limited liability company,
partnership or other entity of which a majority of the outstanding
voting stock or voting power is beneficially owned directly or
indirectly by the Company.
(j) "1934 Act" means the Securities Exchange Act of 1934, as amended
from time to time.
(k) Each of the following terms is defined in the Section indicated:
Term Section
---- -------
Accounting Firm 8(b)
Accrued Obligations 4(a)(i)(A)(3)
Base Salary 4(a)(i)(A)(1)
Board 3rd Paragraph
Cause 3(b)
CIC Date 2
Code 3(d)
Company Common Stock 1(b)(ii)
Company Voting Securities 1(b)(ii)
Date of Termination 3(e)
Deferred Compensation 4(g)
Disability Effective Date 3(a)
Election Contest 1(b)(i)
Employer Affiliate 10(i)
Excise Tax 8(a)
Good Reason 3(c)
Gross-Up Payment 8(a)
Incumbent Directors 1(b)(i)
Non-Qualifying Transaction 1(b)(iii)
Notice of Termination 3(d)
Other Benefits 4(a)(iii)
Payment 8(a)
Post-CIC Period 2
Proxy Contest 1(b)(i)
Rabbi Trust 4(h)
Release 10(h)
Severance 4(a)(i)(B)
Surviving Corporation 1(b)(iii)
Target Bonus 4(a)(i)(A)(2)
Underpayment 8(b)
Welfare Benefits 4(a)(ii)
2. Post-CIC Period. If the Executive is employed by the Company immediately
prior to the first date during the Agreement Term on which a Change in
Control
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occurs (the "CIC Date"), then the Executive's employment during the
two-year period beginning on the CIC Date and ending on the second
anniversary of such date (the "Post-CIC Period") shall be subject to all
the terms and conditions of this Agreement, including, without limitation,
the termination events described in Section 3 below.
3. Termination of Employment During Post-CIC Period.
(a) Death, Retirement or Disability. During the Post-CIC Period, the
Executive's employment shall terminate automatically upon the
Executive's death or Retirement. If the Company determines in good
faith that the Disability of the Executive has occurred during the
Post-CIC Period, the Company may, in its discretion, give the
Executive a written notice in accordance with Section 10(b) of this
Agreement of the Company's intention to terminate the Executive's
employment. In such event, the Executive's employment with the
Company shall terminate effective on the 30th day after receipt of
such notice by the Executive (the "Disability Effective Date").
(b) Cause. The Company may terminate the Executive's employment during
the Post-CIC Period with or without Cause. For purposes of this
Agreement, "Cause" means either of the following circumstances:
(i) Failure to Perform. The willful and continued failure of the
Executive to perform substantially the Executive's reasonably
assigned duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness or
from the assignment to the Executive of duties that would
constitute Good Reason under Section 3(c)), which failure
continues for a period of at least 30 days after a written
demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the
Company. Such written demand must specifically identify the
manner in which the Board or Chief Executive Officer believes
that the Executive has not substantially performed the
Executive's duties; provided, however, that no failure to
perform by the Executive after a Notice of Termination is
given to the Company by the Executive shall constitute Cause
for purposes of this Agreement.
(ii) Engaging in Illegal Conduct or Gross Misconduct. The willful
engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably injurious to
the Company.
For purposes of this Section 3(b), no act or failure to act, on the
part of the Executive, shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the
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Executive's action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the
instructions of a senior officer of the Company or based upon the
advice of counsel for the Company shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company. The cessation of employment of
the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice is
provided to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason.
(i) The Executive's employment may be terminated by the Executive
during the Post-CIC Period for Good Reason or for no reason.
For purposes of this Agreement, "Good Reason" means any of the
following circumstances:
(1) Diminution of Position. The assignment to the Executive
of any duties materially inconsistent with the
Executive's position immediately prior to the CIC Date
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities, or
any other action by the Company which results in a
material diminution in such position, authority, duties
or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken
in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the
Executive.
(2) Reduction of Compensation. Any material reduction in the
aggregate value of the Executive's annual base salary,
short-term cash bonus target amount, long-term incentive
plan target amount, and Company-provided welfare
benefits, all as in effect immediately prior to the CIC
Date, , or any failure by the Company to pay any such
amount to the Executive as earned by the Executive. An
inadvertent failure by the Company to make any payment
of compensation to the Executive that does not occur in
bad faith and that is remedied by the Company promptly
after
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the Company receives notice thereof from the Executive,
is excluded from the definition of "Good Reason."
(3) Employment Location. The Company or an affiliate thereof
requiring the Executive to be based at any location that
is more than fifty (50) miles from the location at which
the Executive is based immediately prior to the CIC
Date.
(4) Other Termination. Any purported termination by the
Company of the Executive's employment other than as
expressly permitted by this Agreement.
(5) Breach by the Company. Any material breach by the
Company of any provision of this Agreement, including,
without limitation, Section 9(c).
Good Reason shall not include Executive's death or Disability.
Executive's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder. For purposes of this
Section 3(c), any good faith determination of "Good Reason"
made by Executive shall be conclusive.
(ii) Notwithstanding the foregoing, "Good Reason" shall not exist
until after (1) the Executive has given the Company written
notice of the applicable event not later than 30 days after
the occurrence of such event, specifying in reasonable detail
the circumstances of the event and stating the Executive's
intent to terminate his or her employment if not remedied, and
(2) the Company has not remedied such event within 30 days
after receipt of such notice; provided, however, that if the
specified event reasonably cannot be remedied within such
30-day period, the Company commences reasonable steps within
such 30-day period to remedy such event and diligently
continues such steps thereafter until a remedy is effected,
and the remedy is effected within 60 days after the Company's
receipt of the Executive's notice, then such event shall not
constitute "Good Reason."
(iii) Notwithstanding the foregoing, "Good Reason" shall not exist
if the Executive is offered employment with the Company or an
affiliate thereof, or if the Executive is offered employment
with the Surviving Corporation, and in either case such offer
of employment includes a position, compensation and employment
location that are consistent with the requirements of
subsections 3(c)(i)(1), (2) and (3).
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(d) Notice of Termination. Any termination by the Company or by the
Executive must be communicated by Notice of Termination to the other
party, and must be given in accordance with Section 10(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice that:
(i) indicates the specific termination provision in this Agreement
relied upon, and
(ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision
so indicated, and
(iii) if the Date of Termination is other than the date of receipt
of such notice, specifies the termination date (which date
shall be not more than 30 days after the giving of such
notice, except as provided in Section 3(c)(ii) above).
If a dispute exists concerning the provisions of this Agreement that
apply to the Executive's termination of employment, the parties
shall pursue the resolution of such dispute with reasonable
diligence. Within five days of such a resolution, any party owing
any payments pursuant to the provisions of this Agreement shall make
all such payments together with interest accrued thereon at the rate
provided in Section 1274(b)(2)(B) of the Internal Revenue Code of
1986, as amended (the "Code"). If the Executive or the Company fails
to set forth in a Notice of Termination any additional fact or
circumstance that contributes to a showing of Good Reason or Cause,
but otherwise delivers a Notice of Termination in accordance with
this Agreement, such party will not be precluded from asserting the
additional fact or circumstance in enforcing such party's rights
hereunder.
(e) Date of Termination. "Date of Termination" means whichever of the
following is applicable:
(i) If the Company terminates the Executive's employment for
Cause, the Date of Termination shall be the date of receipt of
the Notice of Termination or any later date specified in such
Notice.
(ii) If the Company terminates the Executive's employment other
than for Cause or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of such
termination or any later date specified in such notice.
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(iii) If the Executive's employment is terminated by reason of death
or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date.
(iv) If the Executive terminates his or her employment for Good
Reason, the Date of Termination shall be in accordance with
Section 3(c)(ii) of this Agreement.
4. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause or Disability. If, during the
Post-CIC Period, the Company terminates the Executive's employment
other than for Cause or Disability, or the Executive terminates his
or her employment for Good Reason, then in consideration of
Executive's services rendered prior to such termination all of the
following shall take place:
(i) Cash Payments.
A. Current Compensation. The Company shall pay to the
Executive in a lump sum in cash within 30 days after the
Date of Termination the sum of:
(1) the Executive's annual base salary as in effect
immediately prior to the CIC Date ("Base Salary")
through the Date of Termination to the extent not
theretofore paid,
(2) the product of (x) the Executive's target annual
bonus under the Company's short-term incentive
bonus plan for the year in which the Date of
Termination occurs (the "Target Bonus") and (y) a
fraction, the numerator of which is the number of
days in the current fiscal year of the Division
through the Date of Termination, and the
denominator of which is 365, and
(3) any accrued vacation pay to the extent not
theretofore paid (the sum of the amounts described
in clauses (1) and (2) immediately above and this
clause (3) shall be hereinafter referred to as the
"Accrued Obligations").
X. Xxxxxxxxx. The Company shall pay to the Executive an
amount of cash severance (the "Severance") in a lump sum
within 30 days after the Date of Termination equal to
the product of the Multiplier times the sum of (1) the
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Executive's Base Salary and (2) the Executive's Target
Bonus.
(ii) Welfare Benefits. For 18 months after the Date of
Termination, the Company shall continue to provide the
same medical, dental, life and/or disability insurance
coverages to the Executive and/or the Executive's
dependents that the Company or the Surviving
Corporation, as the case may be, provides generally
during such 18-month period to its employees who hold
positions similar to the position held by the Executive
immediately prior to the Date of Termination (the
"Welfare Benefits"). For those Welfare Benefits to which
COBRA applies, the Company will only be obligated to
provide such Welfare Benefits through the Executive's
making the elections permitted under COBRA. In order to
receive the Welfare Benefits, the Executive shall pay
the same amount therefor that he or she paid for such
Welfare Benefits immediately prior to the Termination
Date, and the Executive must make these elections and
pay all required premiums on a timely basis. If the
Executive becomes employed with another employer,
including, without limitation, the Surviving
Corporation, and
(A) the Executive is eligible to receive medical or
dental insurance coverages under another employer
provided plan, then the medical and dental
insurance coverages provided by the Company
pursuant to this subsection 4(a)(i) shall be
secondary to the medical and dental insurance
coverages, respectively, provided under such other
plan to the Executive and/or the Executive's
dependents during such applicable period of
eligibility; and/or
(B) the Executive is eligible to receive life or
disability insurance coverages under another
employer provided plan, then the Company shall
have no further obligation to provide the
Executive and/or the Executive's dependents with
life or disability insurance coverage.
The Company shall not be required to compensate the Executive
for any taxes that the Executive may incur as a result of the
provision of Welfare Benefits hereunder. If the Executive has
prior to the CIC Date publicly announced his or her Retirement
or
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voluntary termination of employment, the Executive will
receive the Welfare Benefits under this subsection 4(a)(ii)
only to the effective date of such announced Retirement or
voluntary termination of employment.
(iii) Other Benefits Due at Date of Termination. To the extent not
then already paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits
required to be paid or provided through the Date of
Termination, or which the Executive is eligible to receive
through and after the Date of Termination, under any plan,
program, policy or practice of, or contract or agreement with,
the Company and its affiliated companies, including such plans
that have change in control provisions in the plans (such
other amounts and benefits shall be hereinafter referred to as
the "Other Benefits"); provided, however, that in no event
shall the Executive be entitled to any benefits under any
severance plan made available to other employees of the
Company or its affiliates, it being the intent of the parties
that the benefits to the Executive under this Agreement will
be in lieu of any such other severance plan.
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Post-CIC Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives, other than for payment of Accrued Obligations and
Deferred Compensation, and the timely payment or provision of Other
Benefits. The Company shall pay all Accrued Obligations to the
Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination, and shall pay all
Deferred Compensation to the Executive's estate or beneficiary, as
applicable, in accordance with the terms of the plan under which
such compensation was deferred.
(c) Retirement. If the Executive's employment is terminated by reason of
the Executive's Retirement during the Post-CIC Period, this
Agreement shall terminate without further obligations to the
Executive, other than for payment of Accrued Obligations and
Deferred Compensation, and the timely payment or provision of Other
Benefits. The Company shall pay all Accrued Obligations to the
Executive in a lump sum in cash within 30 days of the Date of
Termination, and shall pay all Deferred Compensation to the
Executive in accordance with the terms of the plan under which such
compensation was deferred.
(d) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the Post-CIC Period, this
Agreement shall terminate without further obligations to the
Executive, other than for
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payment of Accrued Obligations and Deferred Compensation, and the
timely payment or provision of Other Benefits. The Company shall pay
all Accrued Obligations to the Executive in a lump sum in cash
within 30 days of the Date of Termination, and shall pay all
Deferred Compensation to the Executive in accordance with the terms
of the plan under which such compensation was deferred.
(e) Cause; Other than for Good Reason. If the Company terminates the
Executive's employment for Cause during the Post-CIC Period, this
Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (x) his
or her Base Salary through the Date of Termination, (y) any Deferred
Compensation, and (z) Other Benefits, in each case to the extent not
then already paid. If the Executive voluntarily terminates
employment during the Post-CIC Period (excluding a termination for
Good Reason), this Agreement shall terminate without further
obligations to the Executive, other than for Accrued Obligations,
Deferred Compensation and the timely payment or provision of Other
Benefits. In either case described in this Section 4(e), the Company
shall pay all Accrued Obligations to the Executive in a lump sum in
cash within 30 days of the Date of Termination, and shall pay all
Deferred Compensation to the Executive in accordance with the terms
of the plan under which such compensation was deferred.
(f) Outplacement Services. For a period not to exceed the number of
months equal to one-half of the Multiplier, the Executive shall have
the right to make full use of the Company's outplacement services to
its officers upon termination of the Executive's employment, except
in the event that the Executive's employment is terminated for
Cause.
(g) Deferred Compensation. Any compensation previously deferred by the
Executive ("Deferred Compensation") shall be paid to the Executive
in accordance with the terms of the plan under which it was
deferred.
(h) Funding of Certain Obligations. Not later than the CIC Date relating
to all Changes in Control other than one pursuant to Section
1(b)(vi), regardless of whether the Executive's employment has then
terminated or any termination of such employment has then been
announced, the Company shall take all actions necessary or
appropriate to establish and fund a "rabbi" trust (i.e., a trust
based on the model trust contained in Revenue Procedure 92-64, and
with a trustee selected by the Company, but that is independent of
the Company) (hereafter the "Rabbi Trust") for the purpose of
ensuring that the Executive will receive the Severance in accordance
with the terms of this Agreement. The Rabbi Trust shall expressly
provide that after the CIC Date occurs, the Rabbi Trust may be
amended or revoked only with the prior written consent of the
Executive. Without limiting the generality of the foregoing, on or
before the CIC
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Date, the Company will deposit in the Rabbi Trust an amount of cash
equal to the amount of the Severance to which the Executive would be
entitled if his or her employment terminated on the CIC Date;
provided, however, that if such amount deposited in the Rabbi Trust
together with any interest or earnings thereon is determined later
to be less than or more than the amount of the Severance, if any,
that actually becomes due to the Executive hereunder, the Executive
shall be entitled to the amount required by this Agreement and not
the amount that is held in such trust. In the event that the
Executive does not become entitled to the Severance, as determined
by the trustee of the Rabbi Trust, the amount remaining in the Rabbi
Trust shall be returned to the Company after the expiration of the
Post-CIC Period. The Rabbi Trust shall be used solely for the
purpose of holding deposits of funds for the potential Severance
obligations to the Executive hereunder, and other similar
obligations to similarly situated employees of the Company.
5. Termination in Anticipation of a Change in Control. If (1) a Change in
Control occurs during the Agreement Term, AND (2) within one year prior to
the CIC Date the Executive's employment with the Company has been
terminated either by the Company without Cause or by the Executive for
Good Reason, then if the Executive can reasonably demonstrate that such
termination of employment (i) was at the request of or with the express
prior consent of a third party who has taken steps reasonably calculated
to effect such Change in Control or (ii) otherwise arose in anticipation
of such Change in Control, then all of the following shall take place:
(a) Section 2 of this Agreement shall not apply to the Executive;
Section 4 of this Agreement shall apply to the Executive as
described in subsection (b) below; and all other provisions of this
Agreement shall apply to the Executive in accordance with their
terms.
(b) The Company shall pay to the Executive the aggregate of all amounts
described in Sections 4(a)(i) and 4(a)(iii) in a lump sum in cash
within 30 days after the CIC Date, using as the Executive's Base
Salary and Target Bonus his or her annual base salary and target
short-term incentive bonus, respectively, as in effect immediately
prior to the Date of Termination. The Company shall pay any Deferred
Compensation to the Executive in accordance with the terms of the
plan under which such compensation was deferred.
(c) The Company shall provide to the Executive the Welfare Benefits as
and for the time period described in Section 4(a)(ii), except that
the Company shall reimburse the Executive for the cost of obtaining
such Welfare Benefits between the Date of Termination and the CIC
Date by paying to the Executive a lump sum in cash equal to the
amount that the Executive paid to obtain such Welfare Benefits for
such period less the amount that
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the Executive was paying to obtain such Welfare Benefits immediately
prior to the Date of Termination. If the Executive has, prior to the
CIC Date, publicly announced his or her Retirement or voluntary
termination of employment, the Executive will receive the Welfare
Benefits under this subsection 5(c) only to the effective date of
such announced Retirement or voluntary termination of employment.
6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor, except
as explicitly provided herein, shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any contract
or agreement with the Company or any of its affiliated companies. Amounts
that are vested benefits or that the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
7. No Company Set-Off; Legal Fees; Interest. Except as provided in Section
10(h), and except in the event that the Executive's employment is
terminated for Cause, the Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against
the Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses that the Executive may
reasonably incur in good faith as a result of any contest (regardless of
the outcome thereof) by the Company, the Executive or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant
to this Agreement), provided such contest occurs after the CIC Date, plus
in each case interest on any delayed payment at the applicable federal
rate provided for in Section 7872(f)(2)(A) of the Code.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that
any payment or distribution by the Company to or for the benefit of
the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any additional payments required
under this Section 8) (a "Payment")
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would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including whether and when
a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm
selected by the Executive and reasonably acceptable to the Company
(the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there
has been a Payment, or such earlier time as is reasonably requested
by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 8, shall be paid by the Company to the
Executive within 14 days after the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 8(c) and
the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment (or an additional
Gross-Up Payment). Such notification shall be given as soon as
practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior
to the expiration of the 30-day period following
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the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive
in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of
costs and expenses. Without limitation of the foregoing provisions
of this Section 8(c), the Company shall control all proceedings
taken in connection with such contest (to the extent applicable to
the Excise Tax and the Gross-Up Payment) and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and xxx for a
refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax
or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such
contested
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amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 8(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section
8(c)) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 8(c), a
determination is made that the Executive shall not be entitled to
any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial
of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be
paid.
(e) Based on events occurring after the Change in Control, it may be
necessary or appropriate to redetermine the amount of an excess
parachute payment for a prior taxable year. Any such
redetermination, including the assumptions to be used, shall be made
by the Accounting Firm, which shall provide detailed supporting
calculations both to the Company and the Executive within 15
business days after the receipt of notice from either party of
changed circumstances that indicate that a redetermination may be
necessary. Any redetermination by the Accounting Firm shall be
binding upon the Company and the Executive. If such redetermination
results in the availability of a refund from the Internal Revenue
Service of amounts previously paid, the Executive shall promptly
prepare and file any necessary tax return amendment or request for
such refund. Upon receipt of such refund from the Internal Revenue
Service, the Executive shall promptly pay such refund to the Company
along with any Gross-Up Payments previously paid by the Company
which related to the refunded amount, as determined by the
Accounting Firm. The Company shall pay all fees and expenses of the
Accounting Firm, and the Company shall reimburse the Executive for
all reasonable fees and expenses incurred in preparing and filing
any tax return amendment or request for tax refund necessitated by
the redetermination.
9. Successors.
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(a) This Agreement is personal to the Executive and arises from his or
her current title, employment responsibilities and managerial
reporting relationship. Without the prior written consent of the
Company, this Agreement shall not be assignable by the Executive
other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of, be enforceable by and be
binding upon the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of, be enforceable by and
be binding upon the Company and its successors and assigns.
(c) The Company shall 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 the Company to
assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.
10. Miscellaneous.
(a) Governing Law; Captions; Amendments. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended
or modified other than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
(b) Notices. All notices and other communications made pursuant to this
Agreement must be in writing and must be given by hand delivery, or
by certified mail, return receipt requested, or by overnight
courier, or by telecopy with a confirmation copy sent by either
overnight courier or first-class mail, and addressed as follows:
If to the Executive:
Xxxxx Xxxxxxx
__________________________
__________________________
If to the Company:
Assurant, Inc.
One Chase Xxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
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Attention: General Counsel
or to such other address as either party shall have furnished to the
other in writing in accordance with this Section. Notice and
communications shall be effective when actually received by the
addressee.
(c) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) Withholding. The Company may withhold from any amounts payable under
this Agreement such federal, state, local or foreign taxes as shall
be required to be withheld pursuant to any applicable law or
regulation.
(e) Waiver. The failure of either party to insist upon strict compliance
with any provision of this Agreement, or the failure of either party
to assert any right such party may have under this Agreement shall
not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) "At Will" Employment; Termination of Agreement.
(i) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement
between the Executive and the Company and to the extent
otherwise permitted under applicable law, the employment of
the Executive by the Company is "at will" and the Executive's
employment may be terminated by either the Executive or the
Company at any time prior to the CIC Date. If the Executive's
employment is terminated for any reason before the CIC Date,
the Executive shall have no further rights under this
Agreement, except as provided in Section 5.
(ii) Unless the Executive's employment is terminated, this
Agreement may not be terminated by the Company during the
Agreement Term and before the CIC Date. From and after the CIC
Date, this Agreement may not be terminated by the Company.
This Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.
(g) Nondisclosure. Without obtaining the Company's prior written
consent, the Executive agrees that he or she will not disclose the
existence or the terms of this Agreement to any Person, except for
the Executive's advisors, beneficiaries and other Persons that need
to know about the Agreement. The Executive agrees that no Person
associated with the
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Company falls within such exception that would permit disclosure by
the Executive.
(h) Release. As a condition to the Company's obligation to pay the
Severance pursuant to Section 4(a)(i)(B) above, the Executive must
execute and deliver to the Company a release in substantially the
form of EXHIBIT A hereto.
(i) Employer Affiliate. Notwithstanding any indication in this Agreement
that the Executive is employed directly by the Company, the parties
acknowledge and agree that, on the date of this Agreement, the
Executive is employed directly either by the Company or by an
affiliate of the Company (the "Employer Affiliate"). The parties
further agree that the provisions of this Agreement that provide for
the Company to have rights or obligations or to take actions with
respect to the Executive's employment shall be interpreted to mean
that either the Company or the Employer Affiliate shall have such
rights and obligations and may take such actions. The Company shall
have the discretion to determine whether it or the Employer
Affiliate shall exercise such rights, fulfill such obligations and
take such actions, and, if the Company determines that an obligation
will be fulfilled by the Employer Affiliate, the Company agrees to
cause the Employer Affiliate to fulfill such obligations as if the
Employer Affiliate were a party to this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf by its
undersigned officer thereunto, duly authorized, all as of the day and year first
above written.
ASSURANT, INC.
By: /s/ J. Xxxxx Xxxxxxx
___________________________________________
J. Xxxxx Xxxxxxx
President and CEO
EXECUTIVE
/s/ Xxxxx Xxxxxxx
_______________________________________________
Xxxxx Xxxxxxx
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EXHIBIT A
Form of Release
This Release (this "Release") is granted effective as of the ______ day of
___________________, ______, by ________________________ (the "Executive") in
favor of Assurant, Inc. (the "Company"). This is the Release referred to in that
certain Change in Control Severance Agreement dated as of ________, 200___ by
and between the Company and the Executive (the "CIC Agreement"). The Executive
gives this Release in consideration of the Company's promises and covenants as
recited in the CIC Agreement, with respect to which this Release is an integral
part.
1. Release of the Company. The Executive, for [himself] [herself], [his]
[her] successors, assigns, attorneys, and all those entitled to assert [his]
[her] rights, now and forever hereby releases and discharges the Company and its
respective officers, directors, stockholders, trustees, employees, agents,
parent corporations, subsidiaries, affiliates, estates, successors, assigns and
attorneys (the "Released Parties"), from any and all claims, actions, causes of
action, sums of money due, suits, debts, liens, covenants, contracts,
obligations, costs, expenses, damages, judgments, agreements, promises, demands,
claims for attorney's fees and costs, or liabilities whatsoever, in law or in
equity, which the Executive ever had or now has against the Released Parties,
including any claims arising by reason of or in any way connected with any
employment relationship which existed between the Company or any of its parents,
subsidiaries, affiliates, or predecessors, and the Executive. It is understood
and agreed that this Release is intended to cover all actions, causes of action,
claims or demands for any damage, loss or injury, which may be traced either
directly or indirectly to the aforesaid employment relationship, or the
termination of that relationship, that the Executive has, had or purports to
have, from the beginning of time to the date of this Release, whether known or
unknown, that now exists, no matter how remotely they may be related to the
aforesaid employment relationship including but not limited to claims for
employment discrimination under federal or state law, except as provided in
Paragraph 2; claims arising under Title VII of the Civil Rights Act, 42 U.S.C.
Section 2000(e), et seq. or the Americans With Disabilities Act, 42 U.S.C.
Section 12101 et seq.; claims for statutory or common law wrongful discharge,
including any claims arising under the Fair Labor Standards Act, 29 U.S.C.
Section 201 et seq.; claims for attorney's fees, expenses and costs; claims for
defamation; claims for wages or vacation pay; claims for benefits, including any
claims arising under the Employee Retirement Income Security Act, 29 U.S.C.
Section 1001, et seq.; and provided, however, that nothing herein shall release
the Company of its obligations to the Executive under the CIC Agreement or any
other contractual obligations between the Company or its affiliates and the
Executive, or any indemnification obligations to Executive under the Company's
bylaws, certificate of incorporation, New York law or otherwise.
2. Release of Claims Under Age Discrimination in Employment Act. Without
limiting the generality of the foregoing, the Executive agrees that by executing
this Release, [he] [she] has released and waived any and all claims [he] [she]
has or may
have as of the date of this Release for age discrimination under the Age
Discrimination in Employment Act, 29 U.S.C. Section 621, et seq. It is
understood that the Executive is advised to consult with an attorney prior to
executing this Release; that the Executive in fact has consulted a
knowledgeable, competent attorney regarding this Release; that the Executive
may, before executing this Release, consider this Release for a period of
twenty-one (21) calendar days; and that the consideration the Executive receives
for this Release is in addition to amounts to which the Executive was already
entitled. It is further understood that this Release is not effective until
seven (7) calendar days after the execution of this Release and that the
Executive may revoke this Release within seven (7) calendar days from the date
of execution hereof.
The Executive agrees that [he] [she] has carefully read this Release and
is signing it voluntarily. The Executive acknowledges that [he] [she] has had
twenty one (21) days from receipt of this Release to review it prior to signing
or that, if the Executive is signing this Release prior to the expiration of
such 21-day period, the Executive is waiving [his] [her] right to review the
Release for such full 21-day period prior to signing it. The Executive has the
right to revoke this release within seven (7) days following the date of its
execution by [him] [her]. However, if the Executive revokes this Release within
such seven (7) day period, no severance benefit will be payable to the Executive
under the CIC Agreement and the Executive shall return to the Company any such
payment received prior to that date.
THE EXECUTIVE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT
CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE
COMPANY UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. THE EXECUTIVE
ACKNOWLEDGES THAT [HE] [SHE] HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN
ATTORNEY OR OTHER ADVISOR OF THE EXECUTIVE'S CHOOSING CONCERNING [HIS] [HER]
EXECUTION OF THIS RELEASE AND THAT [HE] [SHE] IS SIGNING THIS RELEASE
VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM ALL SUCH
CLAIMS.
_________________________________
Executive
Date: ___________________________
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