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EXHIBIT 10(4)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT entered into as of the 20th day of February, 1995,
by and between Capsure Holdings Corp. ("Capsure"), a Delaware corporation, and
Bruce A. Esselborn (the "Employee"), an individual.
W I T N E S S E T H:
WHEREAS, Capsure or various of its current subsidiaries have employed
the Employee since April 1, 1986 pursuant to Employment Agreements dated March
11, 1986 and February 20, 1990 (the "Prior Agreements"); and
WHEREAS, Capsure wishes to continue to employ the Employee for the
period provided in this Employment Agreement (the "New Agreement") and the
Employee is willing to continue to serve in the employ of Capsure and of any
direct or indirect subsidiary of it (collectively the "Companies");
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties agree as follows:
Article One: Prior Agreements
Capsure and the Employee mutually agree that the Prior Agreements have
terminated in accordance with their terms.
Article Two: Employment
A. Capsure will continue to employ the Employee for the period (the
"Employment Period") commencing on February 20, 1995 and ending February 19,
1997. The Employee accepts such employment and agrees to serve in the
capacities set forth in this New Agreement and to perform such services of a
chief executive officer nature commensurate with his position and offices and
agrees diligently and competently to devote his entire business time and
attention to such services, excepting disabilities, illness, vacation, paid
holidays given by the Companies, and reasonable activities having a charitable,
educational or other public interest purpose.
B. (1) During the Employment Period, the Employee shall serve as
President of Capsure, and Chairman of the Board of Directors, President, and
Chief Executive Officer of United Capitol Holding Company ("UCHC") and United
Capitol Insurance Company ("UCIC"). In that capacity, the Employee shall
perform such duties as are commensurate with such office and as are consistent
with past practice.
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C. During the Employment Period, the Employee's office shall be
customary to his position and shall be located in the principal executive
offices of UCHC and UCIC, which shall be located in northern DeKalb County,
Georgia. In connection with his employment by Capsure, the Employee shall not
be required to relocate or transfer his principal residence from its present
location in northern DeKalb County, Georgia, and the Employee shall not be
required to perform services which would make the continuance of either his
normal homelife or his principal residence in its existing location
unreasonably difficult or inconvenient for him. A violation of any of these
conditions shall be construed as an attempt by Capsure to terminate the
Employee's service without cause.
Article Three: Compensation During the Employment Period
A. The Companies will make available to the Employee, to the extent he
satisfies the eligibility requirements thereof and to the extent permitted by
law, any fringe or employee benefit program introduced generally to senior
corporate officers. These benefits include, but are not limited to, pension,
profit sharing, stock purchase, stock option, stock appreciation, savings,
deferred compensation, bonus, life insurance, disability insurance, health
insurance, major medical and hospitalization insurance, and other plans and
policies authorized now or in the future which in any event shall provide
benefits to the Employee at a level that, in the aggregate, are not
significantly less than those currently in effect with respect to the Employee.
B. During the Employment Period, Capsure shall pay to the Employee
and the Employee shall accept for his services a minimum annual aggregate
salary of $387,500, payable in accordance with the Companies' customary payroll
policy as in effect from time to time. At Capsure's option, the salary
described herein may be paid through one of the Companies. The Companies
reserve the right at any time and from time to time to increase the minimum
annual salary of the Employee and shall review at least each year such minimum
annual salary in relationship to the goals and performance of the Companies and
prevailing competitive conditions. To the extent that the Employee's minimum
annual salary is increased, the new amount will become known as his new minimum
annual salary and such new minimum annual salary shall not thereafter be
reduced.
The minimum or new minimum annual salary due the Employee excludes any
bonus or any other employee benefit or perquisite to which the Employee is
entitled and, when adjusting the Employee's salary, the Board of Directors or
any other body or group of persons responsible for setting the Employee's
salary shall not take into consideration any bonuses, employee benefits or
perquisites due the Employee.
C. The Employee shall be entitled to, but not obligated to take, the
number of paid vacation days in each calendar year determined by the Companies
from time to time for its senior executive officers, but not less than four
weeks in any calendar year. The Employee shall also be entitled to all paid
holidays given by the Companies to its senior executive officers.
D. The Companies' obligation to pay the Employee the minimum annual
salary
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during the Employment Period may be extinguished only upon a termination of the
Employee's employment pursuant to the provisions of Articles Eight and Nine.
E. The Employee shall be entitled to an annual bonus, which shall
range from 0 to $200,000. The amount of such bonus shall be determined and
paid in February of each year, and the amount of such bonus shall be mutually
agreed upon between the Employee and the Compensation Committee of Capsure.
F. In addition to any other benefits provided to the Employee, the
Companies shall provide the Employee with the following during the term of this
New Agreement:
(i) continuance of use on an exclusive basis of the luxury
automobile currently assigned to the Employee, and all related
insurance, operating and maintenance expenses. The Employee has the
right to continue this arrangement as long as he desires, however, the
Employee agrees that if and when he relinquishes this right, the
Companies are no longer obligated to furnish this benefit. In
consideration of the Employee relinquishing this right, the Companies
will increase the Employee's minimum or new minimum annual salary in an
amount approximating the annual dollar equivalent for the Employee to
obtain a similar benefit on his own;
(ii) the right to first class air travel and first class hotel
accommodations;
(iii) all reasonable club dues and membership fees for clubs and
other similar organizations which are important to the conduct of the
business of the Companies and which he uses for business purposes;
(iv) reasonable consultations with financial and tax advisors or
counselors;
(v) legal expenses in connection with the negotiation of this
New Agreement; and
(vi) an annual physical examination.
H. In addition to any other benefits to be provided to the Employee
by the Companies, the Companies shall pay the premiums on a term life insurance
policy of the Employee's choice, insuring the life of the Employee in the face
amount of not less than two million ($2,000,000.00) dollars during the term of
this New Agreement, unless the Employee's employment is terminated pursuant to
the provisions of Articles Eight and Nine, in which event the obligation
hereunder shall immediately terminate. The Employee shall be the owner of the
policy and shall have the right to designate the beneficiary thereunder and
upon termination of his employment, he shall retain all rights to said policy.
This policy shall be in addition to any group life policy provided by the
Companies to the Employee.
I. The Companies shall reimburse the Employee for all out-of-pocket
expenses
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incurred by him in connection with the performance of his duties hereunder,
including professional activities, upon the presentation of appropriate
documentation therefore in accordance with the then customary procedures of the
Companies.
Article Four: Deleted.
Article Five: Deleted.
Article Six: Deleted.
Article Seven: Notice of Breach
Capsure and the Employee agree that, prior to the termination of the
Employment Period by reason of any breach of any provisions of this New
Agreement, the injured party will give the party or parties in breach written
notice specifying such breach and permitting the party in breach to cure such
breach within the period of thirty (30) days after receipt of such notice.
Article Eight: Inability to Perform
If, during the Employment Period, the Employee shall be unable to
substantially perform the duties required of him pursuant to his employment due
to any disability preventing him from performing such services for a period of
six (6) cumulative months in a twelve consecutive month period, Capsure shall
have the right to terminate the Employee's employment pursuant to this New
Agreement on thirty (30) day's written notice, at the end of which time the
Employee's employment shall be terminated. As used in this New Agreement, the
term "disability" shall mean the substantial inability of the Employee to
perform his essential duties under this New Agreement as determined by an
independent physician selected by Capsure with the approval of the Employee.
Any disability of less than six consecutive months duration shall not be cause
for interruption, suspension or withholding of the salary due the Employee by
Capsure.
Article Nine: Termination
This New Agreement:
(i) may be terminated at any time by mutual agreement between the
Employee and Capsure;
(ii) shall terminate immediately upon the death of the Employee,
but the Employee's estate shall be entitled to receive the salary due
the Employee for a period of six (6) months following the day the death
of the Employee occurred. As a condition for the aforesaid payments,
Capsure shall have the right to require submission of proof of the
Employee's death;
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(iii) may be terminated due to the disability of the Employee pursuant
to Article Eight;
(iv) may be terminated upon a good faith determination by a majority
vote of the Board members of Capsure that the termination of this New Agreement
is necessary by reason of a determination by the insurance department of any
state having jurisdiction over Capsure or any subsidiary or affiliate, that the
Employee must be removed or disqualified from acting as an officer of Capsure
or any of its company subsidiaries; or
(v) may be terminated by the Capsure at any time for "cause" upon the
giving of thirty (30) days prior written notice to the Employee, setting forth
the basis of such termination. For the purpose of this New Agreement, the term
"cause" shall be limited to:
(a) the willful engaging of the Employee in conduct materially
injurious to the Companies;
(b) continued and willful inattention and neglect by the Employee
of the material duties to be performed by him, which inattention and
neglect is not the result of illness or disability by the Employee and
which inattention and neglect, after compliance with the provisions of
Article Seven hereof, does not cease within thirty (30) days after
written notice thereof specifying the details of such conduct is given
to the Employee; and
(c) the conviction of the Employee of a felony under state or
federal law, unless in any such case the Employee performed such act
in good faith and in a manner Capsure reasonably believed to be in or
not opposed to the best interests of the Companies.
Article Ten: Effective Termination
A. The Employee's obligation to render services hereunder may be
terminated by the Employee without any reduction of the amounts payable to him
hereunder if the Employee's circumstances of employment shall have changed (as
hereinafter defined). In such event the Employee shall specify by written
notice to Capsure the event relied on for such termination, and if such event
shall not have been cured within 30 days thereafter, the Employee's employment
hereunder shall be deemed terminated. In the event of any termination by the
Employee pursuant to this Article Ten, or in the event Capsure shall terminate
the Employee's employment, this New Agreement or the Employment Period, other
than pursuant to Articles Eight or Nine, the Employee shall continue to be
entitled to receive all payments and other benefits provided for in this New
Agreement.
B. The Employee's "circumstances of employment shall have changed"
shall mean
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and include any of the following:
(i) notice by Capsure to the Employee of termination of his
employment, this New Agreement or the Employment Period for any reason
whatsoever, other than pursuant to Articles Eight or Nine;
(ii) reduction in the minimum annual salary then being paid to the
Employee by Capsure, or reduction in his minimum or new minimum annual
salary, or withdrawal from him of substantial fringe benefits (including
participation in current or future stock option or stock appreciation
plans) available to other senior corporate officers of the Companies;
(iii) a change in the Employee's place of employment without his
written consent, other than to UCIC's or UCHC's executive offices at a
location in northern DeKalb County, Georgia, or requirements or demands
of the Employee to perform services which would make the continuance of
his principal residence and home life in DeKalb County, Georgia
unreasonably difficult or inconvenient for him; or
(iv) other substantial, material and adverse changes in the
Employee's conditions of employment imposed on him by the Companies or
any material breach by Capsure of the provisions of this New Agreement,
after compliance with the provisions of Article Seven hereof.
Article Eleven: Indemnification
Capsure will indemnify the Employee (and his legal representatives or
other successors) to the fullest extent permitted by the laws of their
respective states of their existing certificates of incorporation and by-laws,
and the Employee shall be entitled to the protection of any insurance policies
the Companies may elect to maintain generally for the benefit of their
directors and officers, against all costs, charges and expenses whatsoever
incurred or sustained by the Employee or his legal representatives in
connection with any action, suit or proceeding to which he (or his legal
representatives or other successors) may be made a party by reason of his being
or having been a director or officer of any of the Companies. If the existing
certificates of incorporation and by-laws of the Companies do not provide for
indemnity of the Employee to the fullest extent permitted by the laws of their
respective states of domicile, Capsure will use its diligent best efforts to
cause the amendment of such certificates of incorporation and/or by-laws so as
to provide maximum indemnification.
Article Twelve: Certain Additional Payments: No Duty to Mitigate
The parties agree that the Employee shall not be under any duty to
mitigate damages under this New Agreement. In furtherance thereof, it is
expressly agreed that if the Employee's
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employment is terminated pursuant to this New Agreement in a manner which
results in the Employee being entitled to additional payments or benefits
hereunder, such additional payments or benefits shall not be reduced by all or
any portion of any payments or benefits received from parties other than the
Companies.
Article Thirteen: Non-Solicitation
A. The Employee shall not at any time during the period of his
employment by the Companies or within five years after termination of his
employment by the Companies (regardless of the reason for termination),
directly or indirectly, solicit any employee of the Companies to leave its
employ or join the employ of another, then or at a later time, or solicit the
employment of, or permit any business of which he is an owner, partner,
substantial shareholder or principal executive to solicit the employment of,
any person who was employed by the Companies, within one year prior to the time
of such solicitation.
B. The Employee acknowledges that the provisions of this Article are
reasonable and necessary for the protection of the Companies, and that the
Companies will be materially damaged if such covenants are not specifically
enforced. Accordingly, the Employee agrees that the Companies will be entitled
to injunctive relief for the purpose of restraining the Employee from violating
such covenants in addition to any other relief to which the Companies may be
entitled under this New Agreement.
Article Fourteen: Jurisdiction and Venue
The parties hereby irrevocably consent to the personal jurisdiction of
and the propriety of venue in the courts of the State of Georgia and of any
federal court located in such state in connection with any action or proceeding
arising out of or relating to this New Agreement, any document or instrument
delivered pursuant to, in connection with, or simultaneously with this New
Agreement, or a breach of this New Agreement or any such document or
instrument.
Article Fifteen: Law
This New Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia.
Article Sixteen: Notices
All notices hereunder shall be in writing and shall be, (1) sent by
registered or certified mail, return receipt requested, or (2) served by
personal service. If intended for Capsure, such notice shall be addressed to
it, attention of its Chairman of the Board at Capsure's most current
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address for its executive offices, or at such other address of which Capsure
shall have given notice to the Employee in the manner herein provided; and if
intended for the Employee, shall be addressed to him at ____________________
_______________________________________________________________________
__________________________________________, or at such other address of which
the Employee shall have given notice to Capsure in the manner herein provided.
Personal service of notices may be substituted for mailing provided a written
receipt of such service is provided by the recipient party. For purposes of
this section, notice shall be deemed received upon actual receipt.
Article Seventeen: Entire Agreement
This New Agreement constitutes the entire understanding among the
parties with respect to the matters referred to herein and no waiver or
modification to the terms hereof shall be valid unless in writing signed by the
party to be charged and only to the extent therein set forth. All prior and
contemporaneous agreements and understandings between the parties with respect
to the subject matter of this New Agreement are superseded by this New
Agreement.
Article Eighteen: Counterparts
This New Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and each of which shall be
deemed an original.
Article Nineteen: Severability
If any provision in this New Agreement is invalid, illegal or
unenforceable, the balance of this New Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
Article Twenty: Binding Effect
This New Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and any successor of Capsure whether by merger,
liquidation, sale of assets, reorganization or otherwise and to the heirs,
administrators and personal representative of the Employee, excepting, however,
the elective rights of the Employee pursuant to Article Ten.
Article Twenty-One: Withholding
The Companies shall be entitled to withhold from amounts payable to the
Employee hereunder such amounts as may be required by applicable law.
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Article Twenty-Two: Assignment
Neither this New Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either of the parties hereto, other
than in accordance with the provisions hereof, without the prior written
consent of the other party.
Article Twenty-Three: Effect of Waiver
The waiver by either party of a breach of any provisions of this New
Agreement shall not operate as or be construed as a waiver of any subsequent
breach thereof.
Article Twenty-Four: Headings
The headings contained in this New Agreement are inserted for
convenience only and do not constitute a part of this New Agreement.
IN WITNESS WHEREOF, the parties have executed this New Agreement
effective February 20, 1995.
"Capsure" "The Employee"
Capsure Holdings Corp. Bruce A. Esselborn
By: Arthur A. Greenberg By: Bruce A. Esselborn
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Its: Vice President Bruce A. Esselborn
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