DEFERRED COMPENSATION and SETTLEMENT AGREEMENT between FPIC INSURANCE GROUP, INC. and JOHN R. BYERS
Exhibit
10.7
DEFERRED
COMPENSATION
and
between
FPIC
INSURANCE GROUP, INC.
and
XXXX
X. XXXXX
THIS
AGREEMENT, effective as of December 31, 2008, between FPIC Insurance Group,
Inc., a Florida corporation (the “Company”), and Xxxx
X. Xxxxx, an individual (the “Executive”).
W
I T N E S S E T H:
WHEREAS, the Executive is an active employee of the Company
and is currently a
participant in the FPIC Insurance Group, Inc. Supplemental Executive Retirement
Plan, as amended (the
“Prior Plan”),
sponsored by the Company; and
WHEREAS, the Company maintains the FPIC Insurance Group, Inc.
Nonqualified Deferred Compensation Plan (the "Deferred
Comp Plan") for the benefit
of certain of its management and highly compensated employees;
and
WHEREAS, the Company wishes to terminate
the Prior Plan with respect to the Executive, and the parties hereto wish to
enter into this Agreement for the purpose of (i) providing for a full and final
settlement of all matters arising with respect to or pertaining to the Prior
Plan, including without limitation the value of benefits, whether past, present
or future, the value of which is subject to a bona fide dispute, claims for attorneys' fees and
expenses, and any and all other tort, contract, statutory and other claims of
any kind related to the Prior Plan and (ii) providing the Executive with additional
Deferred Comp Plan benefits in order to provide retirement benefits to
the Executive; and
NOW, THEREFORE, in consideration of the
mutual promises, covenants, agreements and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties, intending to be legally bound, do hereby
agree as follows:
1. Certain
Definitions.
a. “Code” shall mean the
Internal Revenue Code of 1986, as amended.
b. “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended.
c. “Person” shall be
construed as broadly as possible and shall include an individual or natural
person, a partnership (including a limited liability partnership),
a
corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, a business, and any other
entity.
d. Capitalized
terms used herein without definition shall have the same meanings herein as in
the Deferred Comp Plan.
2. Termination of the Prior
Plan; Release.
(a) On
the date hereof, the Executive shall cease to be a participant in the Prior
Plan, which is hereby terminated as to the Executive, and the Company shall have
no further obligations to the Executive thereunder. In settlement of
the amounts accrued and vested on or before December 31, 2008, for the benefit
of the Executive in the Prior Plan the Company shall credit the contribution to
the Deferred Comp Plan described in Section 3(a) below. In
consideration of the Executive’s relinquishment of future benefits under the
Prior Plan and of his continued services to the Company, the Company shall
credit the contributions to the Deferred Comp Plan described in Section 3(b)
below.
(b) The
Executive accepts the terms of this Agreement in full, final and complete
settlement and satisfaction of any and all claims that in any way relate,
pertain to or arise out of the Prior Plan. Accordingly, the Executive
does hereby release the Company, its successors or purchasers, and any and all
parent, subsidiary and affiliated corporations or business entities, and any and
all respective past or present executives, officers, agents, directors,
shareholders, members, partners and representatives of the foregoing, and others
acting for or on behalf of the foregoing (hereinafter the “Releasees”) from all
past, present or future claims, actions, rights or benefits of whatever nature
or description, including any claims for attorneys' fees and expenses, from the
beginning of time arising out of or relating to the Executive's rights under the
Prior Plan.
(c) It
is further understood and agreed that this document is intended to be a total
accord, settlement and satisfaction of any and all claims, in law or in equity,
that the Executive has or may have against the Releasees related to the Prior
Plan, including, but not limited to, all contract, tort and statutory claims
arising under any applicable state or federal statutes or laws, including but
not limited to ERISA and the Code.
(d) The
Executive warrants and acknowledges that the execution by the Executive of this
Agreement, including the general release set forth above, is knowing and
voluntary and that the Executive understands this Agreement, including the
general release set forth above. The Executive further acknowledges
and warrants that he has been advised to consult with an attorney prior to the
execution of this Agreement, and that he has had the opportunity to consult with
an attorney with respect to the terms of this Agreement, including the general
release contained herein.
3. Company Contributions to
Deferred Comp Plan.
(a) Initial
Contribution. As soon as reasonably practicable after January
12, 2009, the Company will credit the Executive's Retirement Account under the
Deferred Comp Plan with a Company Contribution equal to
$1,276,433.
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(b) Annual
Contributions. Contemporaneously with each payment of base
salary (whether before or after the Executive’s Separation from Service) paid by
the Company to the Executive, commencing with the first payment during 2009, the
Company will credit the Executive's Retirement Account under the Deferred Comp
Plan with Company Contributions in an amount equal to the percentage shown on
Schedule 1
hereto of the gross amount of each such payment of base salary.
(c) Transfer to Rabbi
Trust. Contemporaneously with each Company Contribution
hereunder, the Company will transfer to a trust established pursuant to Section
11.2 of the Deferred Comp Plan an amount in cash equal to the amount of such
Company Contribution. The Company will cause such trust at all times
to possess funds at least equal to the sum of all Accounts under the Deferred
Comp Plan.
(d) Account. Company
Contributions made on the Executive's behalf hereunder shall be credited to the
Executive's Retirement Account under the Deferred Comp Plan (the “Retirement
Account”).
(e) Investment of Company
Contributions. The balance in the Executive’s Retirement
Account shall be invested as directed by the Executive in accordance with the
terms of the Deferred Comp Plan.
(f) Vesting. The
Executive shall be at all times 100 percent vested in his Retirement
Account.
(g) No Guaranteed Account
Balance. The Executive acknowledges that as the Executive
shall be responsible for directing the investment of his Retirement Account
balance, the Company does not guarantee the amount of the Executive’s Retirement
Account on any date.
(h) Impact of Separation from
Service. Except as provided in any employment or severance
arrangement (including without limitation the employment agreement and change in
control severance agreement, each dated as of January 1, 2008, between the
Executive and the Company), upon the Executive's Separation from Service the
Company shall have no further obligation hereunder to continue crediting Company
Contributions to the Executive’s Retirement Account.
(i) Distribution of Company
Contributions Retirement Account. The Executive's Retirement
Account shall be distributed to him at the time and in the form elected by the
Executive pursuant to the terms of the Deferred Comp Plan.
4. No
Admission.
The Executive acknowledges that nothing
contained in this Agreement including the general release set forth herein or
the payment of the sums referred to above shall be construed as an admission of
liability or responsibility on the part of the Company or any of the Releasees,
all such liability and responsibility being expressly
denied.
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5. Mediation and
Arbitration.
Any
dispute or controversy arising out of or in relation to this Agreement shall
first be submitted to mediation in the City of Jacksonville, Florida, in
accordance with the Commercial Mediation Rules of the American Arbitration
Association. If mediation fails to resolve such dispute or
controversy, then such dispute or controversy shall be determined and settled by
arbitration in the City of Jacksonville, Florida, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then in
effect, and judgment upon the award rendered by the arbitrator may be entered in
any court of competent jurisdiction. The parties hereto agree to use
good faith efforts to select a mediator and, if mediation fails to resolve such
dispute or controversy, an arbitrator. If the parties cannot agree
upon a mediator or arbitrator, such mediator or arbitrator shall be selected in
accordance with the relevant Commercial Rules of the American Arbitration
Association then in effect. The Company's mediation and arbitration
expenses, as well as any litigation costs, including legal counsel and
reasonable experts, shall be paid by the Company. The Executive's
mediation and arbitration costs, as well as any litigation costs, including
legal counsel and reasonable experts, shall be paid by the Company no later than
2 ½ months after the end of the calendar year in which such expenses were
incurred, provided, however, in the event the trier of fact determines the
Executive's claims thereunder are made frivolously or in bad faith, the
Executive shall immediately repay such litigation costs to the
Company.
6. Income Tax
Withholding.
The
Company may withhold from any payments made under this Agreement all federal,
state or other taxes as shall be required pursuant to any law or governmental
regulation or ruling.
7. Entire
Understanding.
Except
as provided below, this Agreement contains the entire understanding between the
Company and the Executive with respect to the subject matter hereof and
supersedes any prior agreements between the Company and the
Executive. The Company's obligation to make payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be in lieu and in full settlement of all other payments to the
Executive under the Prior Plan but shall not affect (other than as expressly
stated herein) or operate to reduce any benefit or compensation inuring to the
Executive of any kind elsewhere provided and not expressly provided for in this
Agreement, including without limitation, any benefit or compensation provided
under any compensation, employment, severance, incentive, indemnification,
welfare benefit, retirement or other arrangement, agreement or program in effect
from time to time.
8. Severability.
If,
for any reason, any one or more of the provisions or part of a provision
contained in this Agreement shall be held by a court of competent jurisdiction
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement not held so invalid, illegal or unenforceable, and
each other
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provision
or part of a provision shall to the full extent consistent with law continue in
full force and effect.
9. Consolidation, Merger, or
Sale of Assets.
If
the Company consolidates or merges into or with, or transfers all or
substantially all of its assets to, another Person, the term “Company” as used
herein shall mean such other Person and this Agreement shall continue in full
force and effect.
10. Notices.
All
notices, requests, demands and other communications required or permitted
hereunder shall be deemed to have been duly given upon delivery if in writing
and hand delivered or mailed, postage prepaid, certified or registered, first
class, return receipt requested, or sent by nationally recognized overnight
courier service, as follows:
a. to the Company:
FPIC
Insurance Group, Inc.
Attention: Chairman
of the Board
000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx,
Xxxxxxx 00000
b. to the
Executive:
Xxxx X. Xxxxx
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx
00000
or
to such other address as either party shall have previously specified in writing
to the other.
11. No
Attachment.
Except
as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge or hypothecation or to execution, attachment, levy or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no
effect.
12. Binding
Agreement.
This
Agreement shall be binding upon, and shall inure to the benefit of, the
Executive and the Company and their respective permitted successors and
assigns.
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13. Modification and
Waiver.
This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto. No term or condition of this Agreement
shall be deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement except by written instrument
signed by the party charged with such waiver or estoppel. No such
written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or
condition waived and shall not constitute a waiver of such term or condition for
the future or as to any act other than that specifically waived.
14. Headings of No
Effect.
The
paragraph headings contained in this Agreement are included solely for
convenience of reference and shall not in any way affect the meaning or
interpretation of any of the provisions of this Agreement.
15. Governing
Law.
This
Agreement and its validity, interpretation, performance, and enforcement shall
be governed by the laws of the State of Florida without giving effect to the
choice of law provisions in effect in such State.
16. Effect of Section
409A.
It is expressly contemplated by the
parties that this Agreement will conform to, and be interpreted to comply with
the final regulations issued under Section 409A of the Code. Notwithstanding
any other provision of this Agreement, if the Executive does not sign this
agreement prior to December 31, 2008, all amounts owed under the Prior Plan
shall become subject to the provisions of Section 409A of the Code and the
Executive shall be required to pay all applicable taxes, interest and penalties
that may be due under Section 409A of the Code.
17. Miscellaneous.
The Executive and the Company
acknowledge and represent they each have read or caused to be read this
Agreement and that each understands it fully and signs it
voluntarily.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first above written.
|
FPIC INSURANCE GROUP,
INC.
|
|||
|
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxxx | |
| Name: Xxxxxxx X. Xxxxxxxxx | |||
| Title: Chairman of the Board | |||
| THE EXECUTIVE: | |||
|
|
|
/s/ Xxxx X. Xxxxx | |
| Xxxx X. Xxxxx | |||
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Schedule 1
Annual Contributions
|
Year
|
Percentage
of Base Salary
|
|
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
|
19.00%
21.75%
24.50%
27.25%
30.00%
32.75%
35.50%
38.25%
41.00%
43.75%
19.00%
|
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