Exhibit 10.19
FORM OF EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of the 31st day of October, 1996 by
NAC Re Corp., a Delaware corporation having its principal office in Greenwich,
Connecticut, NAC Reinsurance Corporation, a New York corporation having its
principal office in Greenwich, Connecticut (NAC Re Corp. and NAC Reinsurance
Corporation being hereinafter sometimes collectively referred to as "Employer"),
and _______________, a resident of ____________________, _______________
("Executive").
W I T N E S S E T H
WHEREAS, Executive has been and continues to be employed by Employer in
a management capacity;
WHEREAS, Executive is expected to continue to make major contributions
to the business of Employer;
WHEREAS, Employer desires to reinforce and encourage the continued
attention and dedication of members of Employer's management, including
Executive, to its responsibilities on behalf of Employer; and
WHEREAS, Executive is willing to make his services available to Employer
and to carry out the duties of Executive's position and office, subject to
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, Employer and Executive, intending
to be legally bound, do hereby agree as follows:
1. CERTAIN DEFINED TERMS. In addition to terms defined elsewhere
herein, the following terms shall have the following meanings when used in
this Agreement with initial capital letters:
(a) "Board" shall mean the Board of Directors of NAC Re Corp.
(b) "Cause" shall mean Executive's willful breach of duty in the
course of his employment or Executive's habitual neglect of his employment
duties in a manner that materially impacts the business or reputation of
Employer unless such breach or neglect is of a nature that reasonably can be
corrected and is fully corrected within sixty (60) days following written
notice to Executive in respect thereof. For purposes of this Section 1(b),
no act, or failure to act, on Executive's part shall be deemed "willful"
unless done, or omitted to be done, by Executive not in good faith and
without reasonable belief that his action or omission was in the best
interest of Employer. Notwithstanding the foregoing, Executive shall not be
deemed to have
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been terminated for Cause unless and until there shall have been delivered to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable
notice to Executive and an opportunity for Executive, together with
Executive's counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, Executive was guilty of conduct set forth above
in this Section 1(b) and specifying the particulars thereof in detail.
(c) "Change in Control Agreement" shall mean the letter agreement
between NAC Re Corp. and Executive dated ______________.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Common Stock" shall mean the common stock, ten cents (10 )
par value, of NAC Re Corp.
(f) "Compensation Committee" shall mean the Compensation Committee
of the Board.
(g) "Disability" shall mean permanent and total disability as such
term is defined under Section 22(e)(3) of the Code. Any question as to the
existence of Disability upon which Executive and Employer cannot agree shall
be determined by a qualified independent physician selected by Executive (or,
if Executive is unable to make such selection, such selection shall be made
by any adult member of Executive's immediate family or Executive's legal
representative), and approved by Employer, said approval not to be
unreasonably withheld. The determination of such physician made in writing
to Employer and to Executive shall be final and conclusive for all purposes
of this Agreement.
(h) "Effective Date" shall mean October 30, 1996.
(i) "Good Reason" shall mean the occurrence, without Executive's
express written consent, of any of the following circumstances unless, in the
case of paragraphs (i), (iv), (v), (vi) and (vii), such circumstances are
fully corrected within sixty (60) days following Executive's written notice
to Employer in respect thereof:
(i) the assignment to Executive of any duties inconsistent
with his offices and status as of the Effective Date (or any offices and
status to which Executive has been promoted at the time), or a substantial
diminution in the nature or status of Executive's responsibilities;
(ii) a reduction by Employer in Executive's annual base salary
as in effect on the Effective Date or as the same may be increased from time
to time;
(iii) the relocation of the office in which Executive is
located on the Effective Date to a location more than forty-five (45) miles
therefrom;
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(iv) a material reduction in the aggregate benefits and
compensation provided to Executive under Employer's employee pension and
welfare benefit plans and incentive compensation, stock option and stock
ownership plans;
(v) the failure of Employer to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement,
as contemplated in Section 10 hereof;
(vi) any purported termination of Executive's employment by
Employer for Cause for which Executive is not given notice of such
termination in accordance with Section 1(b) hereof; for purposes of this
Agreement, no such purported termination shall be effective; or
(vii) failure by Employer to honor its obligations to
indemnify Executive as established by the corporate bylaws or by the
applicable provisions of law.
Executive's continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good Reason
hereunder. In the event of a termination of Executive's employment by
Executive for Good Reason, Executive shall provide Employer not less than
sixty (60) days' notice of such termination. Such notice shall indicate that
such termination is for Good Reason and shall set forth in reasonable detail
the facts and circumstances claimed to provide the basis for Executive's
termination for Good Reason. If, within sixty (60) days following the date
on which such notice of termination is given, Employer notifies Executive
that a dispute exists concerning the grounds for termination, the date of
termination for determining the timing of any obligation under this Agreement
shall be the date on which the dispute is finally determined, either by
mutual written agreement of the parties or by arbitration pursuant to Section
14 hereof; provided, further, that the date of termination shall be extended
by a dispute only if such notice of dispute is given in good faith and
Employer pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, Employer will continue to
pay Executive his full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, annual base salary) and
continue Executive as a participant in all other incentive compensation,
benefit and insurance plans in which Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this Section 1(i), unless resolution of such
dispute is unreasonably delayed by Executive. Amounts paid under this
Section 1(i) are in addition to all other amounts due under this Agreement
and shall not be offset against or reduce any other amounts due under this
Agreement.
(j) "Term" shall mean the term provided in Section 3 hereof.
2. EMPLOYMENT; DUTIES. Commencing on the Effective Date, Executive
shall be employed as Executive Vice President of NAC Reinsurance Corporation,
and Executive agrees to carry out and perform all the duties and
responsibilities that are pertinent to such position or that may be
communicated to Executive from time to time by a duly authorized officer of
Employer, or by the Board; provided, however, that nothing contained in this
Agreement shall
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confer upon Executive any right to be retained as Executive Vice President of
NAC Reinsurance Corporation or to be retained as an employee of Employer in
any other capacity.
3. TERM. The term of this Agreement shall commence on the Effective
Date and shall continue through October 30, 1999, unless terminated earlier
pursuant to Section 6 hereof; provided, however, that this Agreement shall
terminate upon the occurrence of a "Change in Control," as such term is
defined in the Change in Control Agreement.
4. COMPENSATION AND BENEFITS DURING THE TERM.
(a) BASE SALARY: Executive's annual base salary as in effect on
the Effective Date shall continue to be Executive's annual base salary
following the Effective Date, subject to review annually in conjunction with
normal salary administration. Any increases will be based on Executive's
achievement of goals, performance of Employer and prevailing competitive
conditions.
(b) INCENTIVE PLANS; STOCK OPTIONS; BENEFIT PLANS: During the
Term, Executive shall continue to be provided the opportunity to participate
in any incentive plans, to be granted options to acquire shares of Common
Stock, and to participate, on a basis and to the extent consistent with
Executive's senior executive position, in any employee pension or welfare
benefit plan, employee stock purchase plan and other so-called fringe benefit
programs from time to time in effect for the benefit of employees of Employer
generally and/or for any group of employees of which Executive is a member,
provided that Executive meets the eligibility requirements of any such plan
or program.
5. OTHER ACTIVITIES. During the Term, Executive shall devote to
Employer's business his full business time and attention so as to assure full
and efficient performance of Executive's duties hereunder. During the Term,
Executive shall not, without Employer's prior written consent, engage or
participate, directly or indirectly, as a sole proprietor, partner, employee,
officer, shareholder, trustee, advisor or consultant, or accept appointment
or election as a director or in any other fiduciary or honorary capacity in
any other business, venture or project in the Designated Industry, as such
term is defined in Section 7(a) hereof; provided, however, that nothing in
this Agreement shall preclude Executive from devoting nonbusiness time and
efforts to charitable, social and civic matters to the extent that such
activities do not interfere with Executive's performance of his duties under
this Agreement or from engaging in any investment or business pursuits on
nonbusiness time outside of the Designated Industry, as such term is defined
in Section 7(a) hereof.
6. TERMINATION. Executive's employment under this Agreement may be
terminated by Employer at any time without prior notice, subject to the
requirement of prior notice if such termination is for Cause. Executive's
employment under this Agreement may be terminated by Executive upon not less
than thirty (30) days' prior notice, other than in the case of termination on
account of Executive's unforeseen health problems, Disability or Good Reason.
If Executive's employment under this Agreement is terminated, the following
provisions shall apply:
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(a) TERMINATION OF EMPLOYMENT BY EMPLOYER FOR A REASON OTHER THAN
CAUSE OR BY EXECUTIVE FOR GOOD REASON: If, before the end of the Term,
Employer terminates Executive's employment for a reason other than Cause, or
if Executive terminates employment on account of Good Reason, Employer shall
pay to Executive, within thirty (30) days following the date of such
termination, a lump sum amount equal to the sum of (i) Executive's annual
base salary which is accrued but unpaid as of the date of termination plus
(ii) the portions, if any, of amounts under the Annual Incentive Plan of
Employer and the Long-Term Incentive Plan of Employer that were earned by
Executive but unpaid as of the date of termination plus (iii) the greater of
(A) two (2) times the sum of Executive's then annual base salary plus the
amounts that would be paid to Executive under the Annual Incentive Plan of
Employer and the Long-Term Incentive Plan of Employer at Executive's targets
(as such targets were in effect at the time of termination) for the year or
performance periods, as the case may be, during which such termination occurs
or (B) the number of years and partial years (expressed in twelfths)
remaining in the Term on the date of termination times the sum of Executive's
then annual base salary plus the amounts that would be paid to Executive
under the Annual Incentive Plan of Employer and the Long-Term Incentive Plan
of Employer at Executive's targets (as such targets were in effect at the
time of termination) for the year or performance period, as the case may be,
during which such termination occurs; in addition, Executive shall vest in
all issued but unvested restricted Common Stock and granted but unvested
options to acquire Common Stock then held by Executive.
(b) TERMINATION OF EMPLOYMENT BY EMPLOYER FOR CAUSE, BY EXECUTIVE
OTHER THAN FOR GOOD REASON OR ON ACCOUNT OF DEATH OR DISABILITY: If
Executive's employment is terminated by Employer for Cause, by Executive
other than for Good Reason, or on account of Executive's death or Disability,
Executive, or his estate in the case of his death, shall receive from
Employer within thirty (30) days following the date of termination a lump sum
amount equal to Executive's annual base salary which is accrued but unpaid as
of the date of termination.
(c) NON-EXCLUSIVITY OF RIGHTS: Nothing in this Agreement shall
prevent or limit Executive's present or future participation in any benefit,
bonus, incentive, or other plan or program provided by Employer for which
Executive may qualify, nor shall this Agreement limit or otherwise affect
rights that Executive may have under any stock option or other agreements,
including the Change in Control Agreement, with Employer. Amounts or
benefits that are vested or that Executive is otherwise entitled to receive
under any plan or program of Employer at, or subsequent to, the date of
termination of Executive's employment shall be payable in accordance with
such plan or program; provided, however, that any compensation and benefits
received by Executive pursuant to this Agreement shall be in lieu of (but, if
necessary to give effect to this provision, shall be reduced by) any and all
compensation and benefits that Executive is entitled to receive or may become
entitled to receive under any reduction in force or severance pay plan,
program or practice that Employer now has in effect or may hereafter put into
effect and shall be applied toward satisfying any severance pay and benefits
required under federal or state law to be paid or provided to Executive.
7. NON-COMPETITION; CONFIDENTIAL INFORMATION.
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(a) Executive agrees that, if Executive's employment is terminated
by Executive other than for Good Reason, for a period of twelve (12) months
following the date of termination of this Agreement, Executive shall not (i)
divert to any competitor of NAC Re Corp. and its subsidiaries (for purposes
of this Section 7, the "NAC Re Group") in the business conducted by the NAC
Re Group as a material component of its operations including, without
limitation, insurance or reinsurance (the "Designated Industry") any customer
as of the date of termination of the NAC Re Group; or (ii) solicit or
encourage any officer, employee or consultant of the NAC Re Group to leave
their employ for employment by or with any competitor of the NAC Re Group in
the Designated Industry. If at any time the provisions of this Section 7
shall be determined to be invalid or unenforceable, by reason of being vague
or unreasonable as to area, duration or scope of activity, this Section 7
shall be considered divisible and shall become and be immediately amended to
only such area, duration and scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction
over the matter; and Executive agrees that this Section 7, as so amended,
shall be valid and binding as though any invalid or unenforceable provision
had not been included herein.
(b) Executive shall not at any time after the date of termination
of employment reveal to anyone other than authorized representatives of the
NAC Re Group, or use for Executive's own benefit, any trade secrets, customer
information or other information that has been designated as confidential by
the NAC Re Group or is understood by Executive to be confidential without the
written authorization of the Board in each instance, unless such information
is or becomes available to the public or is otherwise public knowledge or in
the public domain for reasons other than Executive's acts or omissions.
(c) If Executive materially breaches any of the obligations under
this Section 7, Employer shall have no further compensation or benefit
obligations pursuant to this Agreement or pursuant to the Annual Incentive
Plan of Employer or the Long-Term Incentive Plan of Employer but shall remain
obligated for compensation and benefits for periods prior to such breach as
provided in any other plans, policies or practices then applicable to
Executive in accordance with the terms thereof. Executive hereby
acknowledges that Employer's remedies at law for any breach of Executive's
obligations under this Section 7 would be inadequate, and Executive and
Employer agree that, in addition to any other remedies provided for herein or
otherwise available at law, temporary and permanent injunctive relief may be
granted in any proceeding which may be properly brought by Employer to
enforce the provisions of this Section 7 without the necessity of proof of
actual damages.
8. NO MITIGATION OBLIGATION; NO SET-OFF OR COUNTERCLAIMS: In no event
shall Executive be obligated to seek other employment by way of mitigation of
the amounts payable to Executive under any of the provisions of this
Agreement. Any amounts that may be earned by Executive other than from
Employer shall not reduce Employer's obligation to make any payments
hereunder. The amounts payable by Employer hereunder shall not be subject to
any right of set-off that Employer may assert against Executive.
9. TAXES. Employer may withhold from any amounts payable under this
Agreement all federal, state, city, or other taxes as Employer is required to
withhold pursuant to any law,
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regulation or ruling. Executive shall bear all expense of, and be solely
responsible for, all federal, state, local or foreign taxes due with respect
to any payment received hereunder.
10. SUCCESSORS AND BINDING AGREEMENT.
(a) Employer will 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 Employer, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that Employer is required to perform it. Failure of Employer to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Executive to
compensation from Employer in the same amount and on the same terms as
Executive would be entitled hereunder if Executive had terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the date on which Executive's employment with Employer was terminated.
As used in this Agreement, "Employer" shall include any successor to
Employer's business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of, and be
enforceable by, Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive dies while any amount is still payable hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to Executive's devisee, legatee or other designee or, if
there is no such designee, to Executive's estate.
11. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, provided that all notices to Employer
shall be directed to the attention of the Office of the General Counsel of
NAC Re Corp., or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt:
Employer:
NAC Re Corp.
Attn: General Counsel
One Greenwich Plaza
P.O. Box 2568
Greenwich, CT 06386-2568
Executive:
___________________________________
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___________________________________
___________________________________
12. GOVERNING LAW. The validity, interpretation, construction, and
performance of this Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York, without giving
effect to the principles of conflict of laws of such State, to the extent not
preempted by applicable federal law.
13. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
14. ARBITRATION. Any dispute arising out of or in any way relating to
this Agreement or Executive's employment with Employer, including, without
limitation, any claims Executive may assert under the Age Discrimination in
Employment Act of 1967, as amended (the "ADEA"), shall be resolved by
arbitration in Connecticut through the Stamford, Connecticut office of the
American Arbitration Association in accordance with the Model Employment
Arbitration Procedures of the American Arbitration Association except to the
extent such provisions are modified as hereinafter provided. The arbitration
proceeding shall be conducted by three (3) arbitrators. Executive and
Employer shall each designate one (1) arbitrator, each of whom shall be an
attorney admitted to practice in one or more states who has ten (10) or more
years of experience in employment matters, and the arbitrators so selected
shall thereafter designate a third arbitrator (who shall be a member of the
National Academy of Arbitrators) by mutual agreement. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a
remedy for a dispute involving this Agreement other than a benefit
specifically provided under or by virtue of this Agreement; provided,
however, that with respect to a dispute covered by the ADEA, the arbitrators
shall have the authority to provide all remedies available under such
statute. The decision of the arbitrators shall be final and binding on
Employer and Executive. Employer and Executive shall each pay their own
legal fees associated with arbitration proceedings hereunder, but the fees of
the arbitrators and any other costs associated with such arbitration
proceedings shall be shared equally; provided, however, that the arbitrators
shall be authorized to award all such legal fees, arbitration fees and costs
to a prevailing party.
15. MERGER. With the exception of the Change in Control Agreement,
this Agreement expresses in full the understanding of Employer and Executive,
and all promises, representations, understandings, arrangements and prior
agreements with regard to Executive's employment by Employer are merged
herein.
16. WAIVER. Failure by either party hereto to insist upon strict
adherence to any one or more of the covenants or terms contained herein, on
one or more occasions, shall not be construed to be a waiver nor deprive such
party of the right to require strict compliance with the same thereafter.
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17. AMENDMENTS. No amendments hereto, or waivers or releases of
obligations or liabilities hereunder, shall be effective unless agreed to in
writing by all parties hereto.
18. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed effective as of the date first written above.
NAC Re Corp.
By:_____________________________
Its Chairman
NAC Reinsurance Corporation
By:_____________________________
Its Chairman
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