Exhibit 10.36
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated _____ ___, 2003 by and between American Physicians
Assurance Corporation, a Michigan corporation having a principal place of
business in East Lansing, Michigan, its successors, assigns, affiliates, and
related companies (the "Company") and ________________ (the "Executive").
WHEREAS, the Executive currently serves as the ________________ of American
Physicians Assurance Corporation;
WHEREAS, the Company desires to obtain the Executive's agreement to continue to
serve as __________ __________________________of American Physicians Assurance
Corporation, and to obtain certain restrictions on the Executive's potential
competition with the Company during the term of the Executive's employment and
when and if Executive's employment with the Company terminates; and
WHEREAS, the Company desires to employ the Executive in accordance with the
terms and conditions of this Agreement and Executive desires to be so employed
by the Company.
NOW, THEREFORE, in consideration of the mutual covenants and promises and other
valuable consideration, contained herein, the parties hereto hereby agree as
follows:
1. EMPLOYMENT.
The Company employs the Executive to render services as
_____________________ of American Physicians Assurance Corporation, the
Executive accepts such employment, in accordance with the terms, and
conditions hereinafter set forth. This Agreement supersedes and
replaces in its entirety any prior or contemporaneous employment
agreements or understandings between the Company, its present or former
affiliates or subsidiaries, and the Executive.
2. PLACE OF EMPLOYMENT.
The Executive shall be located, and shall render such services (subject
to necessary and appropriate business related travel), at the Company's
office in East Lansing, Michigan. The Company may relocate Executive,
subject to Executive's rights under Section 6(d) involuntary
termination and Section 6(e) following a Change in Control.
3. TERM.
The term of the Executive's employment with the Company shall be for a
period commencing on date signed and continue, unless terminated sooner
under Section 6, for a period of one (1) year. Thereafter, the term
shall automatically be extended for one (1) additional day for each
successive day of the Executive's employment with the Company unless
replaced, or unless terminated in accordance with Section 6, below.
4. DUTIES AND RESPONSIBILITIES.
(a) At the commencement of this Agreement, the Executive is
employed by the Company in the position of
________________________ of American Physicians Assurance
Corporation. As such, the Executive shall have duties and such
authorities as are consistent with such position subject to
the
1
Exhibit 10.36
direction of the_________________________________________. The
Company may change or amend the duties of the Executive from
time to time to other duties or positions at a comparable
level. References in this Agreement to the "Board" shall be
understood as references to the ACAP Board.
(b) The Executive will devote exclusively his or her best efforts
and full working time to the performance of the duties of the
Executive's position and will not engage in any other
employment during the term of this agreement except that with
the prior approval of the Board the Executive may serve as a
compensated member of the board of directors of other, "for
profit" unaffiliated corporations.
5. COMPENSATION, INCENTIVE COMPENSATION & BENEFITS.
In consideration for the services of the Executive to be performed
hereunder, the Company shall compensate the Executive as follows:
(a) ANNUAL BASE SALARY. The Company shall pay to the Executive a
minimum annual base salary of $___________, payable (less
applicable taxes) in accordance with Company normal payroll
practices. Under no circumstances shall the Executive's base
salary be reduced during the term of this Agreement. The
Executive's base salary shall be periodically reviewed by the
Compensation Committee of the ACAP Board and may be increased
as deemed warranted by the Compensation Committee.
(b) INCENTIVE COMPENSATION. The Executive will be eligible to
participate in any short-term incentive plan adopted for
senior executive staff. The Executive will also be eligible to
participate in long-term incentive plans available to other
senior executive employees.
(c) DISABILITY INSURANCE. During employment, the Company shall
maintain, at its expense, an individual long-term disability
insurance policy ("Policy") for the Executive providing the
Executive with benefits in the event of a disability as such
term is defined in the Policy (a "Disability"), provided the
Executive satisfies the eligibility requirements for coverage
under the disability insurance Policy which the Company has
chosen for its executive staff.
(d) PAID TIME OFF. The Executive shall be entitled to not less
than 4 weeks of vacation and 10 days of occasional sick days
during each calendar year.
(e) OTHER EMPLOYMENT BENEFITS. During employment, the Executive
shall have the opportunity to participate in and shall be
entitled to receive benefits in accordance with, the
provisions of any health, life insurance, disability, deferred
compensation, profit sharing or other employee benefit plan or
plans adopted, or to be adopted, by the Company and which are
generally applicable to other similarly situated senior
executive employees of the Company.
(f) BUSINESS EXPENSES. The Company shall pay or reimburse the
Executive promptly, upon presentation of appropriate vouchers,
for all necessary business travel and entertainment expenses
reasonably incurred by the Executive in connection with
Company? business in accordance with Company policy.
6. TERMINATION.
Subject to the terms and conditions of this Agreement, the Company or
the Executive may terminate the Executive's employment as provided
below, and such termination shall not be deemed a breach of this
Agreement.
2
Exhibit 10.36
(a) DEATH OR DISABILITY. The Executive's employment shall
terminate upon the Executives' death or Disability. Disability
is defined as meeting the requirements for benefits under the
long-term Disability Insurance Policy provided by the Company
for the Executive. If the Executive qualifies or may qualify
for disability benefits under the Policy, Executive agrees to
apply for such benefits in a timely basis and submit any
necessary medical and other information. If the Executive is
not covered by the Policy or is not entitled to disability
benefits under the Policy, the Company may determine that the
Executive is disabled and terminate the Executive's employment
by treating it as an Involuntary Termination under Section
6(d) of this Agreement.
(b) CAUSE. The Company may terminate the Executive's employment
under this Agreement for Cause. The Executive shall be given
written notice of termination, specifying with particularity
the basis for termination; and the Executive shall not in such
case have to be given an opportunity to cure the basis for
such Cause. For the purposes of this Agreement, the Company
shall have Cause upon: (A) the commission by the Executive of
dishonesty, or for intentional commission of a wrongful or
illegal act, (B) or for the willful and continued breach of
this Agreement, or failure to perform the duties of the
Executive's position in a competent and conscientious manner
(other than as a result of incapacity due to physical or
mental injury or illness). (C) The failure of the Executive to
comply with the policies or procedures of the Company.
(c) VOLUNTARY RESIGNATION. The Executive may terminate his or her
employment for any reason whatsoever.
(d) INVOLUNTARY TERMINATION. The Company may terminate the
Executive's employment at any time for any reason or no
reason. A termination under Section 6(a), (b) or (e) will not
be considered an Involuntary Termination. For the purpose of
this Agreement, Involuntary Termination includes, but is not
limited to, the termination of this agreement by the Company,
a permanent relocation of the Executive's duties that would
require the Executive to commute a distance of more than 90
miles further from the Executive's principal place of
employment (the Executive shall have 60 days from the
notification date of relocation to accept or decline continued
employment), the resignation of Executive within 60 days after
an act by the Company which materially reduces the Executive's
duties and responsibilities. The Executive's duties and
responsibilities shall not be deemed materially reduced solely
by virtue of a change in reporting relationship between the
Executive and the Company.
(e) CHANGE IN CONTROL. At anytime within one (1) year following
the date in which a Change in Control shall have occurred, the
Board may terminate the Executive's employment for any reason
whatsoever, or the Executive may terminate his Term of
employment for Qualifying Reasons as set forth below.
For purposes of this Agreement, a Change in Control means any
one of the following events:
(1) The sale by American Physicians Capital, Inc.
("ACAP") of all or substantially all of its assets to
a single purchaser or group of associated purchasers;
(2) The sale, exchange or other disposition of ACAP, in
one transaction to any entity or entities not
affiliated with ACAP, of more than fifty percent
(50%) of the outstanding common stock of ACAP other
than by a sale, exchange, or disposition of the
common stock of ACAP resulting from a public or
private offering of common stock of which offering is
sponsored or initiated by ACAP and approved by its
Board;
3
Exhibit 10.36
(3) The merger or consolidation of ACAP in a transaction
in which the stockholders of ACAP receive less than
fifty percent (50%) of the outstanding voting stock
of the new or continuing entity;
(4) A change of more than 50% of the directors of the
ACAP Board within any 24-month period; except that, a
new director elected pursuant to nomination by a
majority of the Continuing Directors (as defined
below) will not be considered a change of a director
for this purpose.
At any time within one (1) year following the date on which a
Change in Control shall have occurred, the Executive shall
have the right to terminate the Executive's employment upon
written notice to the Company within sixty (60) days following
the occurrence of one or more of the following Qualifying
Reasons. For the purposes of this Agreement Qualifying Reason
shall mean:
(1) The position or responsibilities of the Executive are
significantly reduced (including, without limitation,
the elimination of such position, a substantial
reduction in the size of the Company or other
substantial change in the character or scope of the
Company's operations), or the Executive is assigned
without his or her written consent to any duties
which in scope are not comparable with his or her
position with the Company immediately prior to such
assignment, or the status and stature of those with
whom the Executive is asked to work is significantly
reduced from the Executive's position immediately
preceding the Change in Control;
(2) The Company reduces the Executive's then current
annual base salary, contrary to Section 5(a), above;
(3) The annual incentive compensation opportunity
provided to the Executive is eliminated or
significantly reduced, the Executive's participation
level is reduced or the manner of assessing actual
performance is changed in a manner that results in
the Executive earning significantly less annual
incentive compensation for a given period than he or
she would have for the same period absent such
change, except if such reduction occurs prior to a
Change in Control and is part of an across-the-board
reduction in such benefits applicable to all senior
level executives of the Company;
(4) The Executive's aggregate level of benefits under the
Company's benefit plans is significantly reduced,
except if such reduction occurs prior to a Change in
Control and is part of an across-the-board reduction
in such benefits applicable to all senior level
executives of the Company;
(5) The Company fails to provide the Executive with
benefits and perquisites which are substantially
equivalent in the aggregate to those to which the
Executive is entitled under the Company's benefit
plans in which the Executive was participating
immediately prior to the Change in Control, or fails
to provide the Executive with directors' or officers'
insurance, as applicable, at least at the level
maintained immediately prior to the Change in
Control;
(6) The Company permanently changes the geographic
location of the performance of the Executive duties
that requires the Executive to commute a distance
more than 40 miles further from the Executive's
principal place of employment existing at the time of
the Change in Control;
4
Exhibit 10.36
(7) The Company fails to pay the Executive any amount
otherwise vested and due hereunder or under any plan
or policy of the Company, or fails to comply with any
other provision of or perform any of its other
obligations under this Agreement.
(f) NOTICE OF TERMINATION. Any termination by the Company of the
Executive's employment pursuant to Section 6(b), (d) or (e)
must, in order to be effective, be preceded by a written
notice to the Executive ("Notice of Termination") indicating
the specific provision of this Agreement relied upon, and for
any termination under Section 6(b) setting forth in reasonable
detail the facts and circumstances supporting the termination
under the provision so indicated, and the Date of Termination.
Any termination by the Executive of his active employment
pursuant to Section 6(e) must, in order to be effective, be
preceded by a written notice to the Company indicating the
specific provision of Section 6(e) relied upon and setting
forth in reasonable detail the facts and circumstances
supporting the termination under the provision so indicated
and the Date of Termination. After receipt of such notice, the
Company shall have ten (10) business days to reasonably remedy
the event described therein, upon which such event shall no
longer constitute "Qualifying Reason" for purposes of this
Agreement.
(g) DATE OF TERMINATION. "Date of Termination" shall mean (A) if
the Executive's employment is terminated by the Executive's
death, the date of the Executive's death, or by reason of the
Executive's Disability, the date the conditions to constitute
a Disability have occurred, or if upon expiration of the Term,
the last day of the Term, (B) if the Executive's employment is
terminated by the Company pursuant to Section 6(b), 6(d) or
6(e), the date specified in the Notice of Termination, and (C)
if the Executive's employment is terminated by Executive
pursuant to Section 6(c) or 6(e) the date which is ten (10)
business days after the date of receipt of the Executive's
notice of intention to terminate or such other date as may be
agreed by the Executive and the Board.
7. COMPENSATION AND BENEFITS UPON TERMINATION.
(a) DEATH OR DISABILITY. In the event of the Executive's
termination due to the Executive's death or Disability while
actively employed, the Company shall pay or provide to the
Executive or the Executive's named beneficiary (in the event
of the Executive's death):
i Annual Base Salary - The Executive's earned but
unpaid base salary through the Date of Termination;
ii Bonus - A prorated portion of the Executive's annual
bonus, if any, as determined by the Board based on
the actual performance by the Company during its
fiscal year of the Executive's death or Disability.
Such determination and payment will be made at the
same time that bonus consideration and payments, if
any, for other senior executives for the same
performance period are made; and
iii Benefits - The Executive shall be paid or be provided
such other benefits for which the Executive is
entitled under the terms of any employee benefit plan
or program of the Company in which the Executive may
be, or may have been, a participant including any
earned but unpaid Paid Time Off through the Date of
Termination.
(b) CAUSE. In the event the Executive is terminated for Cause, the
Executive shall receive only such benefits, if any, as may be
provided to him under the terms of any employee benefit,
incentive, option, stock award and other plans or programs of the
Company in which he may be, or may have
5
Exhibit 10.36
been, a participant and shall be paid any balance of the Executive's
earned but unpaid Annual Base Salary and any Paid Time Off for the
period through the Date of Termination.
(c) VOLUNTARY RESIGNATION. In the event the Executive voluntarily
terminates his employment while actively employed, or breaches this
agreement following termination, the Company shall pay or provide to
the Executive only such benefits, if any, as may be provided to him
under the terms of any employee benefit plans or programs of the
Company in which the Executive may be, or may have been, a participant,
and shall be paid any balance of the Executive's earned but unpaid
Annual Base Salary and accrued but unpaid Paid Time Off through the
Date of Termination.
(d) INVOLUNTARY TERMINATION. In the event the Executive's employment is
involuntarily terminated by the Company under Section 6(d), the Company
shall pay or provide to the Executive, subject to the Executive signing
and delivering to the Company a release and separation agreement
reasonably acceptable to the Company:
i. Severance Pay - The Executive shall receive severance pay
equal to 24 months of Executive's then current base salary,
payable in regular installments on the Company's normal
payroll dates over a 12 month period;
ii. Bonus - The Executive shall receive one and one-half (1.5)
times the greater of: the full year annual bonus at 100%
target for the calendar year in which severance occurs, or the
average of last 2 annual bonuses paid to the Executive. Such
payment will be made at the same time that bonus consideration
and payments for other senior executives for the same
performance period are made;
iii. Medical & Dental - The Executive shall upon finalization of
the agreement and release, receive a lump-sum payment in the
amount of eighteen (18) times the then current monthly
premiums for the Executive's medical and dental insurance
coverage. All other welfare and insurance benefits shall cease
as of the Date of Termination; and
iv. Benefit Payment - The Executive shall upon finalization of the
agreement and release, receive a $4,000 payment to be applied
toward the purchase of individual disability, life or any
other insurances or coverages that terminated upon the
Executive's Date of Termination; and
v. Long-Term Incentive - The Executive shall continue to have
rights associated with any vested benefits as of the Date of
Termination. Following the Date of Termination, all non-vested
stock or stock options or other long-term incentives are
forfeited pursuant to and subject to the terms set forth in
the incentive plans.
vi. 401(k), Pension and Supplemental Benefits - The Executive
shall be paid or be provided such other benefits for which the
Executive is entitled under the terms of any employee benefit
plan or program of the Company in which the Executive may be,
or may have been, a participant including any earned but
unpaid Paid Time Off through the Date of Termination.
(e) CHANGE IN CONTROL. If, at anytime within one (1) year following the
date in which a Change in Control shall have occurred, the Company
terminates the Executive's employment for any reason whatsoever (except
in the case of commission of a felonious act); or the Executive
terminates his Term of employment for Qualifying Reasons as set forth
above, the Company shall pay or provide
6
Exhibit 10.36
the following to the Executive, subject to the Executive signing
a release and separation agreement reasonably acceptable to the
Company:
i. Severance Pay - The Executive shall receive a lump-sum
severance payment equal to 24 months the Executive's then
current base salary. Within 7 days of the Date of
Termination, the Company shall submit to the Executive a
release and separation agreement which is consistent with
the terms of this Agreement. The severance payment under
this subsection will be paid to Executive within 7 days
after the release and separation agreement become final
and binding; and
ii. Bonus - The Executive shall receive one and one-half
(1.5) times the greater of: the full year annual
performance bonus at 100% target for the calendar year in
which severance occurs, or the average of last 2
performance bonuses paid to the Executive. Such payment
will be made within 7 days after the release and
separation agreement become final and binding; and
iii. Medical & Dental - The Executive shall, upon finalization
of the agreement and release, receive a lump-sum payment
in the amount of eighteen (18) times the then current
monthly premiums for the Executive's medical and dental
insurance. All other welfare and insurance benefits shall
cease as of the Date of Termination; and
iv. Benefit Payment - The Executive shall, upon finalization
of the agreement and release, receive a lump-sum payment
of $4,000 to be applied toward the purchase of individual
disability, life or any other insurances or coverages that
terminated upon the Executive's Date of Termination; and
v. Long-Term Incentive - The Executive shall receive all
awards made to the Executive under long-term incentive
plans or programs, pursuant to and subject to the terms
set forth in the incentive plans; and
vi. 401(k) Pension and Supplemental Benefits - The Executive
shall be paid or be provided such other benefits for which
the Executive is entitled under the terms of any employee
benefit plan or program of the Company in which the
Executive may be, or may have been, a participant
including any earned but unpaid Paid Time Off through the
Date of Termination; and
vii. The Company shall reimburse the Executive for reasonable
attorney fees incurred by the Executive in connection with
the enforcement of this Section 7(e).
8. REDUCTION OF PAYMENTS.
Notwithstanding any other provision of this Agreement or of any other
agreement, understanding or compensation plan, the Company shall not
pay, and the Executive shall not receive, any payment which, taking
into account all payments, rights, and benefits whether or not under
this Agreement, would be deemed to be an "excess parachute payment"
under Section 280G of the Internal Revenue Code of 1986, as amended,
and the amount of payment hereunder shall be reduced to the extent
necessary to ensure that the Executive receives no "parachute payment"
in connection with such Change in Control if, as determined by the
Company, the reduction would be beneficial to the Executive.
7
Exhibit 10.36
9. SUCCESSORS AND ASSIGNS.
This Agreement shall not be terminated by voluntary or involuntary
dissolution of the Company or by the merger or consolidation where the
Company is not the surviving or resulting corporation. This Agreement
is binding upon and will be enforceable by the Company and by its
successors and by the assignees of all or substantially all of its
business, and by any other corporation into which the Company may be
merged or consolidated. Upon assignment of this Agreement by Company,
the provisions of this Agreement, including but not limited to the
provisions of Section 12, will be enforceable by the company receiving
the assignment.
10. NON-ASSIGNABILITY BY EXECUTIVE.
The obligations of the Executive hereunder may not be assigned or
transferred by the Executive in any manner whatsoever, nor are such
obligations subject to involuntary alienation, assignment or transfer.
11. RELATED COMPANIES.
Notwithstanding Section 9, above, the Company may assign the Executive
to perform services for other companies that are under common ownership
or control with the Company, and may assign this Agreement to other
companies that are under common ownership or control with the Company.
Such assignment may be made without the Executive's consent.
12. PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE SECRETS; COMPANY
BUSINESS ASSETS; NON COMPETE AND NON-SOLICITATION.
(a) CONFIDENTIAL INFORMATION AND TRADE SECRETS. The Executive
acknowledges that he or she will be working with or exposed to
confidential information and trade secrets, which are the
property of the Company and/or its affiliates. Such
information includes, but is not limited to: client lists and
information; medical data; financial data; sales data;
marketing data; policyholder data; claims data; personnel
information; business files; contracts; documents; business
strategies; business opportunities; any and all information
pertaining to potential or actual corporate acquisitions,
mergers, consolidations, conversions, joint ventures, or other
similar agreements; computer software, software codes, and
software documentation, and other documents or information
deemed confidential by the Company and so designated to the
Executive. During and after employment with the Company, the
Executive agrees not to share such information with any person
outside of the Company, except upon prior written
authorization from the Company following notice to and
approval by its Board.
(b) COMPANY BUSINESS ASSETS. The Parties agree that the business
assets of the Company include information regarding Company
clients, and relationships with Company clients, and
confidential information and trade secrets of the Company,
including those items listed in Section 12 (a) above. The
Executive also agrees that the work product of the Executive
produced in the course of employment with Company will be the
property of Company and/or its affiliates. The Executive
agrees that the Company and/or its affiliates shall own the
copyright, patent, and other property rights in such work
product, and that this work product will be work made for hire
for copyright purposes. Upon termination of employment, the
Executive shall deliver to the Company all work product, and
all confidential information and trade secrets, including but
not limited to the items listed in Section 12 (a), and the
Executive shall not retain any copies. If there is any breach
or threatened breach by the Executive of the provisions of
this Section or Section 12 (a), the Company shall be entitled
to injunctive relief against the Executive or those persons or
entities with whom the Executive is then affiliated, and to
reasonable damages, including reasonable attorneys' fees. Such
8
Exhibit 10.36
reasonable damages shall include at a minimum but not
exclusively the amount of any benefit that the Executive would
receive from disclosing or using the information.
(c) NON-SOLICITATION. The Executive agrees that for a period of
one (1) year after termination of employment with the Company,
the Executive will not directly or indirectly solicit business
from or sell any service or product to any clients of the
Company or clients of any subsidiary or affiliate of the
Company for any types of insurance or other services or
products which are offered by or through the Company or its
affiliates. Clients include current insureds and any persons
or entity insured or serviced for a fee by the Company or its
affiliates during the one-year period preceding termination of
the Executive's employment. The Executive also expressly
agrees that for a period of two (2) years after termination of
employment with the Company, the Executive will not directly
or indirectly induce, attempt to induce, or enable or support
the inducement of any employee to depart from or cease
employment with the Company or its affiliates, nor will the
Executive interfere with or disrupt the Company's or its
affiliates' relationships with other employees. If there is
any breach or threatened breach of this Section, the Company
and its affiliates shall be entitled to injunctive relief
against the Executive or those persons or entities with whom
the Executives is then affiliated, and reasonable damages,
including reasonable attorneys' fees.
(d) NON-COMPETE. Executive agrees that for a period of one (1)
year after termination of employment, Executive will not
directly or indirectly accept a position with or provide any
managerial or executive services to any business entity which
competes with Company or Company's affiliates in their core
lines of business, including but not limited to professional
liability insurance and worker's compensation insurance, in
any states where Company or its affiliates are doing business
in the United States at the time of termination. This
non-compete provision applies to providing services to a
competitor in any capacity, directly or indirectly, including
as an employee, consultant, owner, partner, shareholder (other
than a minority shareholder in a publicly traded corporation),
and also applies to aiding or assisting any other person or
entity in providing such services. Provided that, the Board or
CEO of ACAP may give prior written consent to the Executive
accepting a position which would otherwise be in violation of
this non-compete provision. If there is any breach or
threatened breach of this section, the Company and its
affiliates shall be entitled to injunctive relief against the
Executive and those entities with whom Executive is then
affiliated, and reasonable damages, including reasonable
attorneys' fees.
(e) RETURN OF COMPANY PROPERTY. Immediately upon the termination
of the Executive's employment with the Company and at any time
upon the Company's request, the Executive shall deliver to the
Company all the Company property in the Executive's
possession, custody or control including notebooks, reports,
manuals, programming data, listings and materials, engineering
or patent drawings, patent applications, any other documents,
files or materials which contain, mention or relate to
Confidential Information, and all copies and summaries of such
materials whether in written, mechanical, electromagnetic,
analog, digital or any other format or medium.
(f) CONSENT TO MODIFICATION BY THE COURTS. It is the express
intention of the parties to this Agreement that, if it should
appear that any of the terms or covenants of this section are
in conflict with any rule of law or statutory provision of the
State of Michigan or any other jurisdiction where this
Agreement is being enforced, which conflict would ordinarily
render such terms or covenants inoperative or null and void,
the parties request that the Courts of such state modify any
such term or covenant so that the intention of the parties
hereto is carried out to as great a degree and extent as the
Court deems reasonable in order to conform with any rule of
law or statutory provision regarding restrictive covenants of
the State of Michigan or of such other jurisdiction.
9
Exhibit 10.36
13. ARBITRATION OF DISPUTES.
The Executive and the Company agree that any controversy or claim
arising out of or relating to this Agreement, the breach thereof, or
the coverage of this arbitration provision shall be settled by
arbitration, rather than by litigation, administered by the American
Arbitration Association in accordance with the National Rules for the
Resolution of Employment Disputes in effect on the date of delivery of
demand for arbitration. The Executive waives the right to submit any
discrimination claims or other employment-related claims in a court
proceeding, and elects instead to submit any such claims to
arbitration. This Agreement to resolve disputes through arbitration is
not a waiver of any of the Executive's substantive rights or remedies
under law, and the arbitrator shall have the authority to grant any
remedy or relief that could be granted in a court proceeding. The
arbitration of such issues, including the determination of the amount
of any damages suffered by either party hereto by reason of the acts or
omissions of the other, shall be to the exclusion of any court. The
decision of the arbitrators shall be final and binding on the parties
and their respective heirs, executors, administrators, successors and
assignees. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction. There shall be three
arbitrators, one to be chosen directly by each party and the third
arbitrator to be selected by the two arbitrators so chosen. The
arbitration shall be conducted in Michigan or at such other location as
agreed by the parties. All decisions and awards shall be made by a
majority of the arbitrators. Each party shall pay the fees and expenses
of that party's arbitrator and any representatives, witnesses and all
other expenses related to the presentation of that party's case. The
cost of the third arbitrator, the record or any transcripts, any
administrative fees, and all other fees and costs shall be borne
equally by the parties. The arbitrators shall have the authority to
award reimbursement of reasonable attorneys' fees and other fees and
expenses as part of the remedy, in accordance with applicable law.
By agreeing to arbitration under this Section, the Company and the
Executive understand that they are each waiving any right to a trial by
jury and each party makes that waiver knowingly and voluntarily with
full consideration of the ramifications of such waiver.
Nothing contained herein shall be construed or interpreted to preclude
the Company prior to, or pending the resolution of, any matter subject
to arbitration from seeking injunctive relief in any court for any
breach or threatened breach of any of the Executive's obligations in
Section 12 hereof.
14. RESOLUTION OF DISPUTES.
The parties agree that this Agreement will be governed by and
interpreted in accordance with the laws of the State of Michigan,
without application of choice of law rules.
15. RIGHT TO INJUNCTIVE AND OTHER RELIEF; CONSENT TO JURISDICTION.
(a) The Executive acknowledges that the Company will suffer
irreparable harm, not readily susceptible of valuation in
monetary damages, if the Executive breaches any of his
obligations in Section 12 of this Agreement. Accordingly, the
Executive agrees that the Company shall be entitled to
injunctive relief against any breach or prospective breach by
the Executive of his obligations in Section 12 in any federal
or state court of competent jurisdiction, and the Executive
hereby submits to the jurisdiction of any such federal or
state court in the State of Michigan for the purposes of any
actions or proceedings instituted by the Company to obtain
such injunctive relief. Nothing herein
10
Exhibit 10.36
shall be construed as prohibiting the Company from pursuing
any other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from the
Executive,
(b) In addition to the rights set forth in subsection (a), above,
if Executive breaches any of his obligations under Section 12
the Company shall be entitled to cease making further payments
to the Executive pursuant to clauses (i) through (iv) of
Section 7 (d) or (e), as the case may be, as well as pursuant
to clause (v) of Section 7 (d); and to terminate Executive's
rights of participation under clause (v) of Section 7 (d) or
(e), as the case may be,
(c) This section shall survive the termination of the Executive's
Employment
16. ENTIRE AGREEMENT.
This written Agreement sets forth the entire Employment Agreement
between the parties, and it supersedes all prior negotiations,
employment interviews, communications, and understandings between the
Parties whether written or oral. There are no other Employment
Agreements between the Parties.
17. AMENDMENT. This Agreement may not be changed orally but only by a
written agreement that expressly references this Agreement, signed by
the Executive and the Company's Chief Executive Officer, and approved
by its Board of Directors.
18. SEVERABILITY.
The various Sections of this Agreement are severable. If any Section or
an identifiable part thereof is held to be invalid or unenforceable by
any court of competent jurisdiction, then such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining Sections or identifiable parts thereof in this Agreement. The
parties hereto agree that the portion so held invalid, unenforceable or
void shall, if possible, be deemed amended or reduced in scope, or
otherwise be stricken from this Agreement, to the extent required for
the purposes of the validity and enforcement hereof.
19. BENEFICIARIES.
The Executive may select (and change, to the extent permitted under any
applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable under this Agreement following the
Executive's death or disability, and may change such election by giving
the Company written notice thereof. In the event of the Executive's
death, Disability or a judicial determination of the Executive's
incompetence, all references in this Agreement to the Executive shall
be deemed, where appropriate, to refer to the Executive's named
beneficiary, estate or other legal representative.
20. NOTICES.
All notices which a party is required or may desire to give to the
other party under or in connection with this Agreement shall be
sufficient if given by hand delivery or by addressing same to the other
party as follows: (a) if to the Executive, to: the last known address
of record with the Company, or (b) if to the Company, to: Attn:
Secretary, American Physicians Assurance Corporation, 1301 North
Hagadorn Road, East Lansing, MI 48826-1471; or at such other place as
may be designated in writing by like notice. Any notice shall be deemed
to have been delivered when addressed as required herein and deposited
postage prepaid, in the United States Mail.
11
Exhibit 10.36
21. ACTION OF THE BOARD
Any reference in this Agreement to the Board shall include the Board,
the Compensation Committee thereof and any officers of the Company to
which the Board or the Compensation Committee thereof has by resolution
delegated any explicit authority or responsibilities with respect of
this Agreement.
22. TAX WITHHOLDINGS
All payments to the Executive hereunder shall be subject to such
withholding of federal, state and local income and excise taxes and to
such employment taxes as may be reasonably determined by the Company to
be required.
23. SURVIVAL AND CONTINUATION OF AGREEMENT PROVISIONS.
The termination of the Executive's employment for any reason whatsoever
shall not operate to terminate this Agreement or otherwise adversely
affect the respective continuing rights and obligations of the parties,
including but not limited to, those under Sections 5(b), 7, 8, 9, 12,
13, 15 and 20 of this Agreement, all of which shall survive the
effective date of such termination of employment in accordance with
their respective terms.
EXECUTIVE AMERICAN PHYSICIANS ASSURANCE CORPORATION
___________________________ ______________________________________________
President and Chief Executive Officer
12
Exhibit 10.36
SUPPLEMENTAL SCHEDULE
In 2003, the Company entered into new Executive Employment Agreements
with six (6) officers. The Executive Employment Agreement with Thomas Chase is
filed as Exhibit 10.32. Except as set forth below, the other five (5) Executive
Employment Agreements are substantially similar in all material respects to the
form of Executive Employment Agreement filed as Exhibit 10.36 and, therefore,
the specific Executive Employment Agreements for the each of the officers listed
below have been omitted.
Officer Title Salary Subject to the Direction of Date Signed
- ---------- ------------------------- -------- ------------------------------ -------------
R. Kevin President and Chief $350,000 President and Chief Executive June 30, 2003
Clinton Executive Officer Officer and the Board of
(American Physicians) Directors of APCapital
Margo R. Vice President of Human $180,000 President and Chief Executive June 10,2003
Runkle Resources and Legal Officer and the Board of
(APCapital) Directors of APCapital
Annette E. Chief Operating Officer $200,000 Chief Executive Officer of July 28, 2003
Flood (American Physicians) American Physicians, the
President and Chief Executive
Officer and the Board of
Directors of APCapital
Frank H. Executive Vice President, $300,000 President and Chief Executive June 30, 2003
Freund Treasurer and Chief Officer and the Board of
Financial Officer Directors of APCapital
(APCapital)
Laura A. Vice President, Marketing $170,000 Chief Executive Officer of June 12, 2003
Kline (American Physicians) American Physicians, the
President and Chief Executive
Officer and the Board of
Directors of APCapital
13