Exhibit 10.6
[LETTERHEAD OF RELIANCE GROUP HOLDINGS, INC.]
November 22, 1999
Mr. Robert S. Miller
20 Maury Mountain Lane
P.O. Box 4130
Sunriver, Oregon 97707
Dear Steve:
This will confirm that we have reached the following agreements concerning your
employment by Reliance Group Holdings, Inc. ("Reliance"):
1. You will serve as President of Reliance for a term of up to six months,
commencing today and ending on the earlier of May 22, 2000 or the
effective date of a Change of Control of Reliance, i.e. the acquisition
by a non-affiliate of more than 50% of the outstanding common stock of
Reliance or substantially all of Reliance's assets (your "Term of
Employment").
2. Your principal responsibilities as President will be to assist me and
the Board of Directors in developing and implementing strategic and
financial alternatives for Reliance with the goal of maximizing the
value of Reliance for the shareholders. You will devote your full
working time during customary business hours and your best efforts to
the proper performance of your duties hereunder and you will not have
any other employment (excluding serving as an outside director of
companies previously disclosed to us) during your Term of Employment.
3. You will also serve as a Director of Reliance at the pleasure of the
Board and the shareholders.
4. During your Term of Employment, you will be paid a salary of one
million dollars, payable in accordance with Reliance's usual and
customary pay procedures and subject to appropriate withholding for
federal, state or local income or other taxes which Reliance determines
are required to be withheld.
Mr. Robert S. Miller
November 22, 1999
Page 2
5. You will be granted a stock option under Reliance's 1999 Stock Option
Plan for one million shares of Reliance common stock, which will vest
in full on the earlier of the end of your Term of Employment or the
effective date of a Change of Control of Reliance.
6. You will be reimbursed by Reliance for all documented reasonable
business expenses actually incurred and paid by you during the Term of
Employment in the performance of your duties to Reliance in accordance
with the policies of Reliance in effect from time to time.
7. You will acquaint yourself with and abide by Reliance's corporate
policies including its Code of Conduct and its policy on the trading of
securities.
8. Reliance may terminate you "for cause" in the event of the following:
(a) your conviction of a crime;
(b) your willful misconduct in connection with the performance of
your duties, after a determination by Reliance's Board of
Directors that such conduct warrants your termination; or
(c) your willful failure to perform specific written directives
from Reliance's Board of Directors or Chairman, which
directives are consistent with the scope and nature of your
responsibilities as President, and failure to cure such
failure within five days after written notice thereof.
Mr. Robert S. Miller
November 22, 1999
Page 3
9. If you are terminated not "for cause", your Term of Employment will be
deemed to end and you will be paid the balance of your salary as set
forth above and your stock options will immediately vest as set forth
above.
10. During your Term of Employment and thereafter, you will not disclose,
directly or indirectly, to any third party any confidential or
non-public proprietary information pertaining to Reliance or any of its
affiliates, unless specifically authorized to do so by the Chairman of
the Board of Reliance. All internal documents pertaining to Reliance or
its affiliates which are made available to you or prepared or compiled
by you during your Term of Employment are the exclusive property of
Reliance and shall be delivered to Reliance upon the termination of
your Term of Employment, or upon request of the Chairman of the Board
of Reliance. You will continue to cooperate with Reliance after your
Term of Employment as to any matter with which you were involved during
your Term of Employment, and will be reimbursed for any time and
expenses incurred by you in such cooperation. This paragraph 11 will
survive the termination of this agreement and your Term of Employment.
11. This Agreement is intended to be binding on you and Reliance, is to be
governed by and construed in accordance with the laws of New York, and
contains our complete agreement with respect to your employment by
Reliance.
Mr. Robert S. Miller
November 22, 1999
Page 4
Please indicate your complete agreement to the foregoing by signing a copy of
this letter and returning it to me.
Sincerely,
/s/Saul P. Steinberg
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Saul P. Steinberg
SPS:ho'l
AGREED:
/s/ Robert S. Miller
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Robert S. Miller