EXHIBIT 10.1
AMENDMENT TO RELEASE AND SEVERANCE
COMPENSATION AGREEMENT
This Amendment Agreement is made and entered into on this 22nd day of
August 2002, by and among ProAssurance Corporation ("ProAssurance"), ProNational
Insurance Company ("ProNational"), Professionals Group, Inc. ("Professionals
Group") and Xxxxxx X. Xxxxx ("Executive"). ProAssurance, ProNational and
Professionals Group and their respective majority owned subsidiaries are
hereinafter collectively referred to as the "Companies."
RECITALS
The parties to this Amendment Agreement entered into a Release and
Severance Compensation Agreement as of June 27, 2001 (the "Change of Control
Agreement") in connection with the consolidation of Professionals Group and
Medical Assurance, Inc. under ProAssurance, a newly formed insurance holding
company (the "Consolidation"). The Change of Control Agreement provides to the
Executive protection in the form of severance benefits that payable by the
Companies on termination of his employment under certain circumstances after the
Consolidation.
The Companies have requested Executive to move his primary location of
employment to the home office of ProAssurance in Homewood, Alabama, a suburb of
Birmingham, Alabama. Executive has agreed to relocate on the condition that the
Companies extend the Initial Term of his Change of Control Agreement. As set
forth in this Amendment, the Companies have agreed to so extend the Initial Term
of Executive's Change of Control Agreement on the condition that Executive
relocate to Birmingham and Executive agrees to extend the duration of his
covenant not to compete from two years to three years as set forth in this
Amendment.
The Compensation Committee and the Board of Directors of ProAssurance
believes it is in the interest of ProAssurance to retain Executive as its chief
operating officer under the terms
and conditions set forth in this Amendment. The Board has approved this
Amendment of the Change of Control Agreement.
AGREEMENT
NOW THEREFORE, These Premises Considered, and in consideration of the
mutual covenants and provisions in this Agreement, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. The Executive agrees to relocate to the Birmingham, Alabama
metropolitan area and to have his primary location of employment for purposes of
the Change of Control Agreement be stated as the home of ProAssurance currently
located at 000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx.
2. The Change of Control Agreement is hereby amended to extend
the Initial Term of the Change of Control Agreement by deleting Section 1 in its
entirety therefrom and substituting in lieu thereof the following:
This Agreement is effective on June 27, 2001, and shall
continue in effect until the later of either (i) June 27, 2005, or (ii)
two years after the date upon which the Board of Directors of
ProAssurance elects a successor to A. Xxxxxxx Xxxxx as the chief
executive officer of ProAssurance (the "Initial Term"). Thereafter,
this Agreement shall automatically be extended for successive terms of
one year (a "Renewal Term"), except this Agreement may be terminated
after the first Renewal Term upon delivery of written notice of the
termination of this Agreement by any of the Companies at least six
months prior to the expiration of any Renewal Term. If the Executive's
employment is terminated during the term of the Agreement, the date on
which the Executive's employment terminates shall be referred to as the
"Date of Termination."
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3. The Change of Control Agreement is hereby further amended to
change the primary location of Executive's employment from Okemos, Michigan to
Birmingham, Alabama by deleting subparagraph 4(b) in its entirety therefrom and
substituting in lieu thereof the following:
(b) The Companies require that the Executive's primary
location of employment be more than 50 miles from Birmingham, Alabama;
4. The Change of Control Agreement is hereby further amended to
modify the non-competition covenant in certain respects by deleting Section 7 in
its entirety therefrom and substituting in lieu thereof the following:
7. Non-Competition.
In the event the Date of Termination occurs during the Initial
Term or any Renewal Term, the Executive will not during the Restricted
Period (herein defined):
(i) become employed by a competitor company that
offers, sells or markets medical professional liability
insurance in the primary market area of the Companies, except
that Executive may be employed with a competitor company so
long as and on the condition that the Executive does not
participate in the operating activities of the medical
professional liability insurance business of the competitor
company; or
(ii) solicit or induce any employees of the
Companies to leave such employment or accept employment with
any other person or entity, or solicit or induce any insurance
agent of the Companies to offer sell or market medical
professional liability insurance for a competitor company in
the primary market area of the Companies.
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"Competitor company" means an insurance
company, insurance agency, business, for profit or
not for profit organization (other than the
Companies) that provides, or offers to provide
medical professional liability insurance for health
care providers.
"Health care providers" means physicians,
dentists, podiatrist, physician assistants, nurse
practitioners, other individual health care providers
and hospital and other institutional health care
providers.
"Medical professional liability insurance"
means medical malpractice insurance and reinsurance
for health care providers and equivalent self-insured
services such as administration of self-insured
trusts, claims management services and risk
management services. "Medical professional liability
insurance" does not include services provided as an
employee of a health care provider if such services
are rendered solely for the purpose of servicing
medical professional liability risk of the employer
or that of its employees.
"Primary market area" means any state in
which the Companies derived more than $10 million in
direct written premiums from the sale of medical
professional liability insurance to health care
providers in the most recent complete fiscal year
prior to the Date of Termination and any state in
which the Companies have on Date of Termination a
plan for the expansion of marketing activities for
the sale of medical professional liability
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insurance in that state which is likely to result in
direct written premiums from the sale of medical
professional liability insurance of more than $15
million in the 18 months following the Date of
Termination.
"Restricted Period" means a period of 36
months from the Date of Termination.
"Employed" includes activities as an owner,
proprietor, employee, agent, solicitor, partner,
member, manager, principal, shareholder (owning more
than 1% of the outstanding stock), consultant,
officer, director or independent contractor.
If the Executive is deemed to have materially breached the
non-competition covenants set forth in Section 7 of this Agreement, the
Companies may, in addition to seeking an injunction or any other remedy
they may have, withhold or cancel any remaining payments or benefits
due to the Executive pursuant to Section 2 of this Agreement. The
Companies shall give prior or contemporaneous written notice of such
withholding or cancellation of payments in accordance with Section 2
hereof. If the Executive violates any of these restrictions, the
Companies shall be further entitled to an immediate preliminary and
permanent injunctive relief, without bond, in addition to any other
remedy which may be available to the Companies.
Both parties agree that the restrictions in this Agreement are
fair and reasonable in all respects, including the geographic and
temporal restrictions, and that the benefits described in this
Agreement, to the extent any separate or special
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consideration is necessary, are fully sufficient consideration for the
Executive's obligations under this Agreement.
6. The parties hereby ratify, confirm and approve the terms of
the Change of Control Agreement as amended hereby, and agree that the Change of
Control Agreement as so amended shall be binding on the parties and their
successors and assigns.
In Witness Whereof the undersigned have duly executed this Amendment
Agreement as of the date first written above.
PROASSURANCE CORPORATION
By /s/ A. Xxxxxxx Xxxxx
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Its Chairman
PROFESSIONALS GROUP, INC.
By /s/ A. Xxxxxxx Xxxxx
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Its Chairman
PRONATIONAL INSURANCE COMPANY
By /s/ Xxxx X. Xxxxxxx
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Its Vice President
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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