AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.53
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the “Agreement”) is made and entered into as
of the 23rd day of April, 2008, by and between Triad Guaranty Inc., a Delaware
corporation (the “Company”), and Xxxx X. Xxxxxxxx (“Employee”).
WITNESSETH:
WHEREAS, the Company and Employee previously entered into an Employment Agreement, dated
September 9, 2005 (the “Original Agreement”); and
WHEREAS, the Original Agreement was supplemented by a Letter Agreement dated September 9, 2005
(the “Letter Agreement”) as well as an Amendment to Letter Agreement between Xxxx X. Xxxxxxxx and
Triad Guaranty Inc. dated December 26, 2006 (the “Amendment to Letter Agreement”) (the Original
Agreement, as amended by the Letter Agreement and the Amendment to Letter Agreement being referred
to as the “Prior Agreement”); and
WHEREAS, Section 14(f) of the Prior Agreement provides that the parties may amend the Prior
Agreement if such amendment is made in writing and is signed by the parties; and
WHEREAS, the parties desire to amend and restate the terms and conditions of Employee’s
employment with Company as set forth hereinafter; and
WHEREAS, the Company and Employee intend for this Agreement to supersede and replace the terms
of the Prior Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and obligations hereinafter set
forth, the parties hereto agree as follows:
1. Employment and Term. The Company hereby employs Employee and Employee accepts employment
with the Company as President and Chief Executive Officer of the Company, on the terms and
conditions herein set forth, for a period commencing on the date of the signing of this Agreement
and expiring on December 31, 2008, unless sooner terminated pursuant to Section 7. Employee shall
have such duties, responsibilities and authority as are commensurate with his position, and shall
report to the Chairman of the Company’s Board of Directors (the “Board”). Employee shall also
perform such other or additional duties on behalf of the Company and its subsidiaries and
affiliates as may be reasonably assigned to him by the Board from time to time.
2. Extent of Services. During the term hereof, Employee shall devote his entire attention and
energy to the business and affairs of the Company on a full-time basis and shall not be engaged in
any other business activity, regardless of whether such business activity is pursued for gain,
profit or other pecuniary advantage, unless the Company otherwise consents; but this shall not be
construed as preventing Employee from investing his assets in such form or manner as will not
require any services on the part of Employee in the operation of the affairs of the companies in
which such investments are made and will not otherwise conflict with the
provisions of this Agreement. Full-time, as used above, shall mean a forty (40) hour work
week, or such longer work week as the Board shall from time to time adopt. The foregoing shall not
be deemed to prevent Employee from participating in any charitable or not-for-profit organization
to a reasonable extent, provided however that Employee does not receive any salary or other
remuneration from such charity or not-for-profit organization. Employee will be subject to and
shall comply with all codes of conduct, personnel policies and procedures applicable to senior
executives of the Company including, without limitation, policies regarding sexual harassment,
conflicts of interest and xxxxxxx xxxxxxx, of which he shall have received in writing.
3. Compensation.
(a) Salary. During the term of this Agreement, the Company shall pay Employee an annual
salary of $495,000.00 (“Annual Salary”), payable in accordance with the Company’s regular
payroll procedures. For any period of Voluntary Retirement Extension (as defined in Section
7(e)), the Company shall pay Employee an annual salary of $990,000, payable in accordance
with the Company’s regular payroll procedures.
(b) Bonus. In addition to his Annual Salary, Employee shall receive: (i) retention
bonuses equal to (A) $150,000, payable on the first regular pay period following July 1,
2008, provided that Employee is employed on July 1, 2008 and (B) $300,000, payable on the
first regular pay period following December 31, 2008, provided that Employee is employed on
December 31, 2008; and (ii) a severance bonus equal to $225,000, payable on the first
regular pay period following December 31, 2008, provided that Employee is employed on
December 31, 2008. Notwithstanding the foregoing, the bonus payments under (i) and (ii)
shall be paid earlier (if applicable) on the first regular pay period following the
effective date of Employee’s Retirement, Involuntary Termination Without Cause or Good
Reason Termination.
(c) Restricted Stock Grant; Existing Awards. Employee shall receive a grant of
restricted stock under the terms of the Triad Guaranty Inc. 2006 Long-Term Stock Incentive
Plan (as amended and restated on January 1, 2008) (the “Plan”) for 40,500 shares (the
“Award”). The shares subject to the Award shall vest in a lump sum three (3) years from the
date of grant or two (2) years from the date of Retirement (as defined in Section 7(e)), if
earlier. The terms of the Award and the terms of all other options, restricted stock
awards, phantom stock awards or other equity awards granted to Employee prior to and
remaining outstanding on the date hereof shall be governed in all respects by the terms of
the Plan and the respective award agreements under which they were originally granted.
4. Benefits. Employee shall be entitled to participate in all medical and other employee
plans of the Company, if any, on the same basis as other executives of the Company, subject in all
cases to the respective terms of such plans.
5. PTO. Employee shall be entitled to paid time off (“PTO”) in accordance with the Company’s
PTO policy in effect at the time the PTO is taken as if Employee had at least ten (10) years of
service with the Company. In the event that the full PTO is not taken by Employee, no
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PTO time shall accrue for use in future years, except in accordance with the Company’s
then-existing policy for the carry forward of accrued PTO.
6. Expenses. Employee shall be entitled to prompt reimbursement for all reasonable expenses
incurred by him in furtherance of the business of the Company in connection with his performance of
his duties hereunder, in accordance with the policies and procedures established for executive
officers of the Company, and provided Employee properly accounts for such expenses. In addition,
Employee shall be entitled to prompt reimbursement for up to $5,000.00 of legal fees and expenses
incurred by Employee in the negotiation of this Agreement. All reimbursements must be made no
later than the end of the calendar year following the calendar year in which the expense was
incurred. The expenses eligible for reimbursement under this Section 6 in any calendar year shall
not affect any expenses eligible for reimbursement or in-kind benefits to be provided to Employee
in any other calendar year. Employee’s rights under this Section 6 shall not be subject to
liquidation or exchange for any other benefit.
7. Termination.
(a) Death. This Agreement and Employee’s employment hereunder shall terminate
immediately upon Employee’s death. In such event, the Company shall be obligated to pay only
(i) Employee’s salary to the end of the month in which he dies; and (ii) a lump sum death
benefit to Employee’s estate equal to Employee’s Annual Salary at the time of his death.
(b) Incapacity. To the extent permitted by law, if Employee is absent from his
employment for reasons of illness or other physical or mental incapacity which renders him
unable to perform the essential functions of his position, with or without reasonable
accommodation, for more than an aggregate of ninety (90) days, whether or not consecutive,
in any period of twelve (12) consecutive months, then upon at least sixty (60) days’ prior
written notice to Employee, if such is consistent with applicable law, the Company may
terminate this Agreement and Employee’s employment hereunder, unless, within that notice
period, Employee shall have resumed performance of the essential functions of his positions,
with or without reasonable accommodation. In the event of a termination of employment under
this Section 7(b), the Company shall be obligated to pay Employee his salary from the date
of such termination until the earlier of (i) the date on which coverage commences under the
long-term disability insurance policy maintained by the Company for the benefit of Employee,
if any, or (ii) the date two (2) months after the date of such termination.
(c) Termination by the Company.
(i) The Company may terminate this Agreement and Employee’s employment
hereunder at any time for Cause. As used herein, “Cause” shall mean:
(A) a material breach by Employee of his duties and obligations
hereunder, including but not limited to gross negligence in the performance
of his duties and responsibilities or the willful failure to
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follow the Board’s directions; provided, however, that Cause shall not
exist unless the Company has provided Employee with written notice setting
forth the existence of the non-performance, failure or breach and Employee
shall not have cured same within thirty (30) days after receiving such
notice;
(B) willful misconduct by Employee which in the reasonable
determination of the Board has caused or is likely to cause material injury
to the reputation or business of the Company;
(C) any act of fraud, material misappropriation or other dishonesty by
Employee; or
(D) Employee’s conviction of a felony.
In the event of termination for Cause, the Company shall pay Employee his
salary up to the date that is thirty (30) days after the delivery to him of
the notice of termination, which date shall be for all purposes of this
Section 7(c)(i) the date of termination of his employment, unless there has
been a cure under Section 7(c)(i)(A). In the event of termination for Cause,
Employee shall not receive any previously unpaid bonus or bonuses except any
earned but unpaid bonus with respect to any bonus measurement period ended
prior to the date of termination.
(ii) Notwithstanding anything contained herein to the contrary, the Company
also may terminate this Agreement and Employee’s employment hereunder for any reason
whatsoever, upon no less than sixty (60) days’ prior written notice to Employee. In
the event that the Company terminates this Agreement pursuant to the provisions of
this Section 7(c)(ii) (an “Involuntary Termination Without Cause”), then, for
purposes of Section 8, Employee shall be deemed to have terminated because of
Retirement pursuant to Section 7(e).
(d) Termination by Employee. Other than on account of a Good Reason Termination (as
defined in this Section 7(d)) or Retirement (as defined in Section 7(e)), Employee may
terminate this Agreement and his employment hereunder for any reason whatsoever, upon no
less than sixty (60) days’ prior written notice to the Company. In the event that Employee
terminates this Agreement pursuant to the provisions of this Section 7(d) without “Good
Reason” as hereinafter defined, Employee shall be entitled to receive his salary up to the
date of termination set forth in the notice of termination, and in such event, Employee
shall not receive any previously unpaid bonus or bonuses except any earned but unpaid bonus
with respect to bonus measurement period ended prior to the date of termination. Employee
may also resign for Good Reason (a “Good Reason Termination”). As used herein, “Good
Reason” shall mean:
(i) a material breach by the Company of its obligations hereunder, including
but not limited to a material and adverse change in the status or position of
Employee as an executive officer of the Company including, without
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limitation, a material diminution in duties, responsibilities or authority,
except in connection with the incapacity of Employee, or non-payment of Annual
Salary or other compensation due hereunder; or
(ii) the Company, without Employee’s consent (such consent not to be
unreasonably withheld), transfers or relocates the office of Employee which would
require Employee to be based more than fifty (50) miles distance from his initial
office in Winston-Salem, North Carolina;
provided, however, that Good Reason shall not exist unless Employee has provided the
Company with a written notice setting forth the reasons for the existence of Good
Reason, and the Company has not cured the reasons for the existence of Good Reason
within thirty (30) days after receiving such notice.
(e) Voluntary Retirement. Employee may retire from the Company as of the close of
business on December 31, 2008, or such earlier date as mutually agreed to by Employee and
the Company (“Retirement”). Notwithstanding the foregoing, the Company may, at its election
made at any time by providing written notice to Employee prior to December 31, 2008, delay
the date of Employee’s Retirement from December 31, 2008 for a period not to extend beyond
March 31, 2009 (“Voluntary Retirement Extension”). Employee’s failure to continue to perform
his duties during any Voluntary Retirement Extension will be treated as a termination by
Employee under Section 7(d) without Good Reason and Employee will not be entitled to the
benefits provided under Section 8.
(f) Subsidiary Offices and Positions; Company and Subsidiary Directorships. Upon
termination of Employee’s employment for any reason, his employment by any subsidiary of the
Company shall likewise then be terminated. In addition, upon such termination Employee
shall immediately resign as a member of the Board and the board of directors of any
subsidiary of the Company on which Employee is serving at the time of such termination, and
he shall evidence such resignation by promptly submitting his letter of resignation to the
chairman of the Board and each such subsidiary board of directors.
8. Benefits Upon Termination
(a) Involuntary Termination Without Cause, Good Reason Termination and Retirement. If
Employee’s employment is terminated as a result of an Involuntary Termination Without Cause,
a Good Reason Termination, or Retirement (the day of such Involuntary Termination Without
Cause, Good Reason Termination or Retirement, the “Termination Date”), then Employee shall
be entitled to the following benefits (as applicable):
(i) Retirement Payments: $675,000 in total retirement payments, payable in 18
equal monthly installments in advance over a period commencing as of the first day
of the seventh month following the Termination Date and ending on the first day of
the 24th month following the Termination Date (such
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24-month period following the Termination Date being referred to herein as the
“Post-Termination Period”).
(ii) Continued Participation in Company Health Care Plan: In addition to the
other benefits provided in Section 8(a)(i), Employee shall be entitled to the
following benefits:
(A) Employee shall be entitled to participate (treating Employee as an
“active employee” of the Company for this purpose) in any health care,
dental, vision or prescription drug plan maintained by the Company
(collectively, “Company health care plan”) during the Post-Termination
Period (the “Continuation Coverage”). The Company, consistent with sound
business practices, shall use its best efforts to provide Employee and his
dependents with the Continuation Coverage under the Company health care
plan, including, if necessary, amending the applicable provisions of the
Company health care plan and negotiating the addition of any necessary
riders to any group insurance contract. During the Post-Termination Period,
Employee shall pay the entire premium required for the Continuation Coverage
under the Company health care plan. During the first eighteen (18) months
of the Post-Termination Period, the premium required for the Continuation
Coverage shall be equal to the premium required by the continuation of
coverage requirements of Section 4980B of the Code and Part 6 of Title I of
the Employee Retirement Income Security Act of 1974, as amended (“COBRA”)
for such Continuation Coverage (the “COBRA Rate”). During the remainder of
the Post-Termination Period, the premium required for the Continuation
Coverage shall be the greater of the COBRA Rate or the actuarially
determined cost of the Continuation Coverage as determined by an actuary
selected by the Company.
(B) If at any time during the Post-Termination Period the Company is
unable for whatever reason to provide Employee with the Continuation
Coverage under any Company health care plan, the Company, consistent with
sound business practices, shall use its best efforts to provide Employee
coverage under an individual policy of health insurance providing coverage
that is substantially identical to the Continuation Coverage to be provided
under the Company health care plan. In such event, Employee shall pay the
entire premium charged for coverage of Employee and his dependents under the
individual policy.
(C) The Continuation Coverage provided to Employee and his dependents
pursuant to this Section 8(a)(ii) is intended to satisfy the continuation of
coverage requirements of COBRA. In the event that the period of
Continuation Coverage expires prior to the end of the period of continuation
coverage to which Employee and his dependents would be entitled under COBRA
(the “COBRA Period”), Employee and/or his dependents may elect continuation
coverage under COBRA (“COBRA
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Coverage”) for the remainder of the COBRA Period. Employee and/or his
dependents shall be responsible for paying the full amount of the premium
charged for such COBRA Coverage under the Company health care plan at the
COBRA Rate. Notwithstanding the foregoing provisions of this Section
8(a)(ii), in the event that the Continuation Coverage for whatever reason
does not satisfy the continuation of coverage requirements of COBRA,
Employee and/or his dependents shall be entitled to elect COBRA Coverage in
lieu of the Continuation Coverage described in this Section 8(a)(ii). In
such event, Employee and/or his dependents shall be responsible for paying
the full amount of the premium charged for such COBRA Coverage under the
Company health care plan at the COBRA Rate.
(D) During the Post-Termination Period, the Company shall pay to
Employee a monthly special benefit as determined pursuant to the provisions
of this sub-paragraph (D) (the “Special Benefit”). The amount of the
monthly Special Benefit shall be equal to the amount of the monthly premium
actually paid by Employee for the Continuation Coverage for Employee and his
dependents required by this Section 8(a)(ii). The Special Benefit shall be
payable on the 20th day of each calendar month during the
Post-Termination Period, or within ten (10) business days thereafter.
(iii) Other Welfare Benefits. In addition to participation in the Company
health care plan during the Post-Termination Period, and solely in the case of
Retirement (and not in the case of Involuntary Termination Without Cause or Good
Reason Termination), Employee shall, as and to the extent permitted by (1) Section
409A of the Internal Revenue Code of 1986, as amended (including all applicable
regulations or other guidance promulgated pursuant thereto, “Code”), and (2) the
terms and conditions of the Welfare Benefit Plans (as they exist on the date
hereof), also be entitled to participate (treating Employee as an “active” employee
of the Company for this purpose) during the Post-Termination Period in all other
welfare benefit plans and arrangements sponsored from time to time by the Company
for the benefit of its employees, including, without limitation, life insurance,
accident, disability policies or arrangements which are generally available to the
active employees of the Company (collectively, “Welfare Benefit Plans”) in which he
participated immediately prior to his Termination Date and the benefits under such
other Welfare Benefit Plans shall be made available under the same terms and
conditions available to active employees (e.g., employee contributions are required
for certain benefits that are in effect for active employees who are similarly
situated). Notwithstanding the foregoing, Employee acknowledges and agrees that
upon his Retirement, he shall no longer be eligible to participate in, be provided
or receive any reimbursement from Employer for or under: (1) the Company’s sick
leave, vacation pay and similar programs, (2) any provision of a company car, (3)
payment of country club dues, or (4) payment of other perquisites that were
previously provided to Employee due to his position as President and Chief Executive
Officer of the Company.
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Notwithstanding clause (4) of the preceding sentence, Employee shall continue
to be entitled to reimbursement of his personal tax and accounting fees and expenses
in an amount up to $7,000.00 per year. This right of reimbursement shall continue
in effect during the term of this Agreement as set forth in Section 1 and for a
period of twenty-four months following the date of his Retirement. Employee
acknowledges that such right of reimbursement shall terminate upon a termination of
Employee’s employment for any reason other than Retirement.
(b) Termination Other Than Involuntary Termination Without Cause, Good Reason
Termination and Retirement. If Employee’s employment terminates for any reason other than
Involuntary Termination Without Cause, a Good Reason Termination or Retirement, Employee
shall not be entitled to any of the benefits listed in Section 8(a).
(c) Consultant Work and Compliance with Section 9 Restrictive Covenants as Condition to
Receipt of Benefits. As a continuing condition to the receipt of any benefits described in
Section 8(a), Employee shall be reasonably available to perform services for the Company as
an independent consultant on an as-needed basis during the Post-Termination Period;
provided, however, that any such consulting work provided by Employee to the Company shall
not exceed (i) during the period beginning on the first day after the Retirement Date and
ending on the later of six (6) months from the Retirement Date or June 30, 2009, ten (10)
days per calendar month; (ii) during the period beginning on the first day of the expiration
of the period under clause (i) and ending on the later of six (6) months from that date or
December 31, 2009, eight (8) days per calendar month; and (iii) thereafter five (5) days per
calendar month. The services to be performed by Employee in his capacity as an independent
consultant shall be those as may be reasonably assigned him by the Board or its delegate
from time to time. Employee shall be entitled to reimbursement for all reasonable expenses
incurred by him during the Post-Termination Period, provided that any expense exceeding
$1,000 shall be subject to the prior written approval of the Company. During the
Post-Termination Period, Employee shall be treated as an independent contractor for federal
and state income tax withholding, employment tax and tax reporting purposes. Employee
acknowledges and agrees that during the Post-Termination Period he will not be an
employee of the Company but will be an independent contractor. In addition, notwithstanding
anything else in this Agreement to the contrary, (i) if for any reason any court determines
that any of the restrictions contained in Section 9 hereof are not enforceable, (ii)
Employee breaches or threatens to breach any of the restrictions in Section 9, or (iii)
Employee challenges the enforceability of any of the restrictions in Section 9 (whether
through court proceedings, an administrative or arbitral proceeding, or in any other manner
whatsoever), the Company shall have no obligation to pay the benefits provided in this
Section 8.
(d) Reductions. If the Company is obligated by law (including the WARN Act or any
similar state or foreign law) to pay Employee severance pay, a termination indemnity, notice
pay, or the like, then any post-termination payments provided in this Section 8 shall be
reduced by the amount of any such other severance pay, termination indemnity, notice pay or
the like, as applicable.
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(e) Release. Notwithstanding anything herein to the contrary, the payment of any
post-termination payments provided in this Section 8 to Employee shall be subject to the
execution by Employee (and failure to revoke) of a general release of the Company and its
affiliates of any and all claims under this Agreement or related to or arising out of
Employee’s employment hereunder, in a form and manner satisfactory to the Company.
9. Restrictive Covenant. 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
five percent (5%) of the outstanding voting stock of a company having at least two hundred and
fifty (250) holders of voting stock) of a corporation; or otherwise:
(a) enter into or engage in the private mortgage insurance business or any other credit
enhancement business in which, as of the date of such termination, the Company is then
engaged or actively considering being engaged within:
(i) any area of the United States or any foreign country in which the Company
is then doing business;
(ii) in the event that any court determines that the area set forth in the
preceding subparagraph is too broad to be enforceable, each and every state of the
United States or foreign country in which the Company had a market share, based on
industry data, of at least four percent (4%) of net new mortgage insurance written
as of the end of the quarter next preceding the date of termination of this
Agreement; or
(iii) in the event that any court determines that the area set forth in the
preceding subparagraphs is too broad to be enforceable, each and every xxxxxxxxxxxx
xxxxxxxxxxx xxxx xx xxx Xxxxxx Xxxxxx or any foreign country in which the Company
had a market share, based on industry data, of at least four percent (4%) of net new
mortgage insurance written as of the end of the quarter next preceding the date of
termination of this Agreement; or
(iv) in the event that any court determines that the area set forth in the
preceding subparagraphs is too broad to be enforceable, the States of Florida,
Illinois and North Carolina; or
(v) in the event that any court determines that the area set forth in the
preceding subparagraphs is too broad to be enforceable, the State of North Carolina.
(b) solicit or attempt to solicit any of the Company’s customers or prospective
customers with whom Employee has had substantive business communications as an employee of
the Company in the performance of his duties and responsibilities hereunder with the intent
or purpose to perform for such customer the same or similar services or to sell to such
customer the same or similar products, including other credit enhancement
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products, which Employee performed for or sold to such customer during the term of his
employment hereunder; or
(c) solicit or recruit any person who is an employee or agent of the Company, for
employment in the private mortgage insurance business or any other credit enhancement
business or for the purpose of soliciting or attempting to solicit any of the Company’s
customers or prospective customers as prohibited by Section 9(b) above.
Employee and the Company agree and acknowledge that the Company does business on a
nationwide basis, with customers located throughout the United States, and may do business
world wide with customers located throughout the world 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 noncompetition covenants in this Section 9 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.
10. Confidential Information and Discoveries. Employee acknowledges that he will, as a result
of his duties as an employee of the Company, have access to and be in a position to receive
confidential information, including trade secrets, relating to the Company. Therefore, Employee
agrees that during his employment by the Company and thereafter he will not divulge to, or use for
the benefit of, himself or any other person, any information concerning any inventions,
discoveries, improvements, processes, methods, trade secrets, research or secret data (including,
without limitation, customer or supplier lists, formulas, computer programs, software development
or executive monitor systems), or other confidential matters possessed, owned or used by the
Company that may be obtained or learned by Employee in the course of or as a result of his
employment hereunder unless (i) such disclosure is authorized by the Company, (ii) such
confidential information becomes generally available to and known by the public (other than as a
result of disclosure directly or indirectly by Employee) or (iii) such confidential information
becomes available to Employee on a nonconfidential basis from a source other than the Company, or
its employees or agents, provided that such source is not and was not bound by a confidentiality
agreement with or other obligation of secrecy to the Company. The expiration or termination of
employment shall not be deemed to release Employee from his duties hereunder not to convert to his
own use or the use of others the rights or properties of the Company as described herein.
11. Enforcement. Both parties recognize that the services to be rendered under this Agreement
by Employee are special, unique and of extraordinary character and that in the event of the breach
by Employee of any of the terms and conditions of Section 9 or 10 of this Agreement to be performed
by him, then the Company shall be entitled, if it so elects, to institute and prosecute proceedings
in any court of competent jurisdiction, either in law or in equity, to obtain damages for any
breach hereof, or to enforce the specific performance hereof by Employee or to enjoin Employee from
performing acts prohibited above during the period herein covered, but nothing herein contained
shall be construed to prevent such other remedy in the courts as the Company may elect to invoke.
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12. Return of Documents. Upon the termination of this Agreement for any reason, Employee
shall forthwith return and deliver to the Company and shall not retain any original or copies of
any books, papers, price lists or customer contracts, bids or customer lists, files, books of
account, notebooks and other documents and data relating to the performance by Employee of his
duties hereunder, all of which materials are hereby agreed to be the property of the Company.
13. Tax and Other Restrictions. Notwithstanding anything herein to the contrary:
(a) Excess Parachute Payments. In the event that payment of any amount under this
Agreement would cause Employee to be the recipient of an excess parachute payment within the
meaning of Code Section 280G(b), the amount of the payments to be made to Employee pursuant
to this Agreement shall be reduced to an amount equal to one dollar less than the amount
that would cause the payments hereunder to be excess parachute payments. The manner in which
such reduction occurs, including the items of payment and amounts thereof to be reduced,
shall be agreed to by Employee and the Company.
(b) Payments in Excess of $1 Million. If any payment hereunder would not be deductible
by the Company for federal income tax purposes by reason of Code section 162(m), or any
similar or successor statute (excluding Code Section 280G), such payment shall be deferred
and the amount thereof shall be paid to Employee at the earliest time that such payment
shall be deductible by the Company.
(c) Deferred Compensation Payments. To the extent applicable, the parties hereto
intend that this Agreement comply with Code Section 409A. The parties agree that this
Agreement shall at all times be interpreted and construed in a manner to comply with Code
Section 409A and that should any provision be found not in compliance with Code Section
409A, the parties are contractually obligated to execute any and all amendments to this
Agreement deemed necessary and required by the Company’s legal counsel to achieve compliance
with Code Section 409A. By execution and delivery of this Agreement, Employee irrevocably
waives any objections he may have to any amendments required by Code Section 409A. The
parties also agree that in no event shall any payment required to be made pursuant to this
Agreement that is considered nonqualified deferred compensation within the meaning of Code
Section 409A be made to Employee unless he has incurred a separation from service (as
defined in Code Section 409A). In the event amendments are required to make this Agreement
compliant with Code Section 409A, the Company shall use its best efforts to provide Employee
with substantially the same benefits and payments he would have been entitled to pursuant to
this Agreement had Code Section 409A not applied, but in a manner that is compliant with
Code Section 409A. The manner in which the immediately preceding sentence shall be
implemented shall be the subject of good faith negotiations of the parties. The parties
also agree that in no event shall any payment required to be made pursuant to this Agreement
that is considered nonqualified deferred compensation within the meaning of Code Section
409A be accelerated in violation of Code Section 409A. The parties further agree that any
payments of deferred compensation that are made to a specified employee (as defined in Code
Section 409A) as a result of a separation from service cannot
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commence under Code Section 409A until the lapse of six (6) months after a separation
from service (or death of the specified employee, if earlier).
14. Miscellaneous.
(a) Notices. Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing and if sent by registered or certified mail to Employee or the
Company at the address set forth below their signatures at the end of this Agreement or to
such other address as they shall notify each other in writing.
(b) Assignment. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and permitted assigns and Employee and his personal
representatives, heirs, legatees and beneficiaries. This Agreement may be assigned by the
Company with the consent of Employee to a fiscally responsible entity that assumes the
obligations set forth herein, but shall not be assignable by Employee.
(c) Applicable Law. This Agreement shall be construed in accordance with the laws of
the State of North Carolina in every respect, including, without limitation, validity,
interpretation and performance. Any dispute between the parties hereto, arising under or
relating to this Agreement, or Employee’s employment with the Company, other than for an
action by the Company under Section 11 hereof for specific performance, injunction or other
equitable remedy to enforce Sections 9 and 10 hereof shall be settled by arbitration in
Winston-Salem, North Carolina before a single arbitrator in accordance with the
then-applicable rules of the American Arbitration Association. Such arbitrator may award the
prevailing party its reasonable attorneys’ fees and expenses, and judgment upon the award
rendered may be entered in any court having jurisdiction thereof.
(d) Headings. Section headings and numbers herein are included for convenience of
reference only and this Agreement is not to be construed with reference thereto. If there be
any conflict between such numbers and headings and the text hereof, the text shall control.
(e) Severability. If for any reason any portion of this Agreement shall be held
invalid or unenforceable, it is agreed that the same shall not affect the validity or
enforceability of the remainder hereof. The portion of the Agreement which is not invalid or
unenforceable shall be considered enforceable and binding on the parties and the invalid or
unenforceable provision(s), clause(s) or sentence(s) shall be deemed excised, modified or
restricted to the extent necessary to render the same valid and enforceable and this
Agreement shall be construed as if such invalid or unenforceable provision(s), clause(s), or
sentences(s) were omitted. The provisions of this Section 14(e), as well as Sections 9 and
10 hereof, shall survive the termination of this Agreement.
(f) Entire Agreement. This Agreement contains the entire agreement of the parties with
respect to its subject matter and supersedes all previous agreements between the parties,
including but not limited to the Prior Agreement, the Letter Agreement and the Amendment to
Letter Agreement. No officer, employee, or representative of the Company has any authority
to make any representation or promise in connection with
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this Agreement or the subject matter thereof that is not contained herein, and Employee
represents and warrants he has not executed this Agreement in reliance upon any such
representation or promise. No modification of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
(g) Waiver of Breach. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of any subsequent
breach by the breaching party.
(h) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one
agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and Employee has signed this Agreement all on the day and year first above
written.
| TRIAD GUARANTY INC. a Delaware corporation |
||||
| /s/ Xxxx X. Xxxx | ||||
| Xxxx X. Xxxx | ||||
| Senior Vice President, Secretary | ||||
| and General Counsel | ||||
| Address: | 000 Xxxxx Xxxxxxxxx Xxxx | |||
| Xxxxxxx-Xxxxx, X.X. 00000 | ||||
| XXXX X. XXXXXXXX | ||||
| /s/ Xxxx X. Xxxxxxxx | ||||
| Address: | 0000 Xxxxxx Xxxx Xxxx | |||
| Xxxxxxx-Xxxxx, XX 00000 | ||||
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