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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into effective as of
the 5th day of January, 2000 (the "Effective Date"), between HCC INSURANCE
HOLDINGS, INC. ("HCC" or "Company"), and FRANK J. BRAMANTI ("Executive"),
sometimes collectively referred to herein as the "Parties."
RECITALS:
WHEREAS, Executive is to be employed as Executive Vice President of
HCC, and as an integral part of its management who participates in the
decision-making process relative to short and long-term planning and policy for
the Company, will serve on the Company's Executive Management Committee;
WHEREAS, it is the desire to the Board of Directors of HCC (the
"Board") to (i) directly engage Executive as an officer of HCC and its
subsidiaries; and (ii) directly engage, if elected, the services of Executive as
a director of HCC and its subsidiaries;
WHEREAS, Executive is desirous of committing himself to serve HCC on
the terms herein provided; and
WHEREAS, Executive and HCC have previously entered into an Employment
Agreement effective as of January 1, 1998 (the "1998 Contract") which is to be
cancelled, terminated and of no further force or effect.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the Parties agree as follows:
1. TERMINATION OF 1998 CONTRACT AND TERM. Effective as of the Effective
Date, the 1998 Contract shall be cancelled, terminated and of no further force
or effect. The Company hereby agrees to employ Executive as an Executive Vice
President, and Executive hereby agrees to accept such employment, on the terms
and conditions set forth herein, for the period commencing on the Effective Date
and expiring as of 11:59 p.m. on December 31, 2002 (the "Basic Term") (unless
sooner terminated as hereinafter set forth).
2. DUTIES.
(a) DUTIES AS EMPLOYEE OF THE COMPANY. Executive shall, subject to
the supervision of the Chief Executive Officer, the President, and the Board,
have general management responsibilities in the ordinary course of HCC's
business with all such powers with respect to such management as may be
reasonably incident to such responsibilities. During normal business hours,
Executive shall devote his full time and attention to diligently attending to
the business of the Company during the Basic Term. During the Basic Term,
Executive shall not directly or indirectly render any services of a business,
commercial, or professional nature to any other person, firm, corporation, or
organization, whether for compensation or otherwise, without the prior written
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consent of the Chairman of the Board. However, Executive shall have the right to
engage in such activities as may be appropriate in order to manage his personal
investments so long as such activities do not interfere or conflict with the
performance of his duties to the Company hereunder. The conduct of such activity
shall not be deemed to materially interfere or conflict with Executive's
performance of his duties until Executive has been notified in writing thereof
and given a reasonable period in which to cure the same.
(b) OTHER DUTIES. At all times during the Basic Term, the Company
shall use its best efforts to cause Executive to be elected a director and to
serve on the Executive Committee and Senior Management Committee of HCC. Any
such failure to use its best efforts prior to a Change of Control shall be a
material breach of this Agreement for purposes of Paragraph (4)(a)(iv). If
elected, Executive agrees to serve as a director and on the Executive Committee
and Senior Management Committee of HCC and of any of its subsidiaries and in one
or more executive offices of any of HCC's subsidiaries, provided Executive is
indemnified for serving in any and all such capacities in a manner acceptable to
the Company and Executive. If elected, Executive agrees that he shall not be
entitled to receive any compensation for serving as a director of HCC or in any
capacities of HCC's subsidiaries other than the compensation to be paid to
Executive by the Company pursuant to this Agreement..
3. COMPENSATION AND RELATED MATTERS.
(a) BASE SALARY. Executive shall receive a base salary (the "Base
Salary") paid by the Company at the annual rate of $350,000, during the period
beginning on January 1, 2000, and ending December 31, 2000; $375,000 for the
period from January 1, 2001 through December 31, 2001; and $400,000 for the
period from January 1, 2002 through December 31, 2002, payable not less
frequently than in substantially equal monthly installments. Effective January
1, 2003, Executive's employment shall terminate with the Company and Executive
shall become a consultant to the Company for the period beginning on such date
and ending on December 31, 2005 (the "Consulting Period"). Executive shall
receive an annual consulting fee and be required to perform the hours of
consulting services (the "Consulting Services") as follows: during Year 1 of the
Consulting Period - $200,000 and 200 annual hours; during Year 2 of the
Consulting Period - $150,000 and 150 annual hours; and during Year 3 of the
Consulting Period - $100,000 and 100 annual hours. The Consulting Services to be
provided shall be commensurate with Executive's training, background, experience
and prior duties with the Company. Executive agrees to make himself reasonably
available to provide such Consulting Services during the Consulting Period;
provided, however, the Company agrees that it shall provide reasonable advance
notice to Executive of its expected consulting needs and any request for
Consulting Services hereunder shall not unreasonably interfere with Executive's
other business activities and personal affairs, as determined in good faith by
Executive. In addition, Executive shall not be required to perform any requested
Consulting Services which, in Executive's good faith opinion, would cause
Executive to breach any fiduciary duty or contractual obligation Executive may
have to another employer. Further, during the Consulting Period, Executive shall
not be subject to any non-competition provisions except for the two-year period
provided for in Paragraph 5(c). Executive's travel time shall constitute hours
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of Consulting Services for purposes of this Paragraph 3(a). The Parties
contemplate that, when appropriate, the Consulting Services shall be performed
at Executive's office, residence or at the Company's executive offices in
Houston, Texas and may be performed at such other locations only as they may
mutually agree upon. Executive shall be promptly reimbursed for all travel and
other expenses reasonably incurred by Executive in rendering the Consulting
Services. Executive's annual consulting fee shall be paid quarterly in advance.
In such event, Executive, acting as a consultant, shall be entitled to no
further benefits from the Company other than medical insurance as set forth
herein. At Executive's election, Executive may terminate his employment and
commence the Consulting Period at any earlier time than as set forth herein. In
such event, the Consulting Period shall commence on such date and shall
terminate on the third anniversary thereof.
(b) BONUS PAYMENTS. Executive shall be entitled to receive, in
addition to the Base Salary, an annual cash bonus payment in an amount, which
may be zero, to be determined at the sole discretion of the Compensation
Committee. If Executive elects to become a Consultant, he shall receive no
bonus.
(c) EXPENSES. During the Basic Term, Executive shall be entitled to
receive reimbursement for all reasonable expenses incurred by him in accordance
with the policies and procedures established by the Board for the Company's
senior executive officers in performing services hereunder, provided that
Executive properly accounts therefor in accordance with Company policy.
(d) OTHER BENEFITS. Except if Executive elects to become a
consultant, as set forth above, Executive shall be entitled to participate in or
receive benefits under any compensatory employee benefit plan or other
arrangement made available by the Company now or in the future to its senior
executive officers and key management employees, subject to and on a basis
consistent with the terms, conditions, and overall administration of such plan
or arrangement. Nothing paid to Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the Base Salary payable to Executive pursuant to Paragraph (a) of this
Section. The Company shall not make any changes in any employee benefit plans or
other arrangements in effect on the date hereof or subsequently in effect in
which Executive currently or in the future participates (including, without
limitation, each pension and retirement plan, supplemental pension and
retirement plan, savings and profit sharing plan, stock or unit ownership plan,
stock or unit purchase plan, stock or unit option plan, life insurance plan,
medical insurance plan, disability plan, dental plan, health and accident plan,
or any other similar plan or arrangement) that would adversely affect
Executive's rights or benefits thereunder, unless such change occurs pursuant to
a program applicable to substantially all executives of the Company and does not
result in a proportionately greater reduction in the rights of or benefits to
Executive as compared with any other executive of the Company.
(e) VACATIONS. (i) Executive shall be entitled to thirty (30) paid
vacation days per year during the Basic Term. There shall be no carryover of
unused vacation from year to year. For
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purposes of this Paragraph, weekends shall not count as vacation days, and
Executive shall also be entitled to all paid holidays and personal days given by
the Company to its senior executive officers.
(f) PERQUISITES. During Executive's employment, but not during the
Consulting Period, except as specifically set forth herein, Executive shall be
entitled to receive the perquisites and fringe benefits appertaining to an
executive officer of HCC in accordance with any practice established by the
Compensation Committee. Notwithstanding, and in addition to, any perquisites to
which Executive is entitled pursuant to the preceding sentence, Executive shall,
whether acting as an employee or as a consultant: (i) have use of a new Mercedes
500 SEL automobile, and the Company shall pay all expenses related to
Executive's use of such car, including gasoline, insurance, and maintenance,
such automobile to be granted to Executive, without cost, on an "as-is" basis at
the beginning of the Consulting Period; (ii) be allowed to travel on business
utilizing first class passage (whether domestic or international) (such
perquisite to be for the Basic Term and the Consulting Period); (iii) be
reimbursed for annual club dues for Lakeside Country Club, such membership to be
granted to Executive, without cost, at the beginning of the Consulting Period;
(iv) receive a total of $1,000,000 term life insurance (which shall be in
addition to the standard benefits provided to Executive under the Company's
group life insurance program that covers officers); (v) in addition to the other
benefits provided in this Agreement, Executive shall be entitled to receive
medical insurance as currently provided under the Company's group program, as
such group program may be changed from time-to-time in the future, and Executive
shall be entitled to continue to be covered by such group program or, if not
permitted under the terms of the group program, then the Company shall provide
Executive with a medical insurance policy providing substantially similar
benefits as to the group program, for the period ending on the date of the later
to die of Executive or, if Executive is married on the date of his death,
Executive's spouse or the date all of Executive's children complete college (as
defined in the Company's group program). Executive shall be entitled to receive
the medical benefits defined herein at no cost to the Executive. However,
Executive's rights pursuant to this subsection (v) shall be void if Executive is
terminated for Cause or if Executive voluntarily terminates his employment
except as provided for herein; and (vi) HCC shall pay for Executive's
preparation of estate planning and wealth preservation documents during the
course of Executive's employment with the Company. Such estate planning and
wealth preservation documents may be changed from time-to-time at the Company's
cost and expense, pursuant to Executive's change in circumstances.
(g) PRORATION. Any payments or benefits payable to Executive
hereunder in respect of any calendar year during which Executive is employed by
the Company for less than the entire year, unless otherwise provided in the
applicable plan or arrangement, shall be prorated in accordance with the number
of days in such calendar year during which he is so employed. Notwithstanding
the foregoing, any payments pursuant to Paragraphs 4(b)(4), 4(c) or 4(d) of this
Agreement shall not be subject to proration.
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4. TERMINATION.
(a) DEFINITIONS.
(1) "CAUSE" shall mean:
(i) Material dishonesty which is not the
result of an inadvertent or innocent mistake of Executive with respect
to the Company or any of its subsidiaries;
(ii) Willful misfeasance or nonfeasance of
duty by Executive intended to injure or having the effect of injuring
in some material fashion the reputation, business, or business
relationships of the Company or any of its subsidiaries or any of their
respective officers, directors, or employees;
(iii) Material violation by Executive of any
material term of this Agreement; or
(iv) Conviction of Executive of any felony,
any crime involving moral turpitude or any crime other than a vehicular
offense which could reflect in some material fashion unfavorably upon
the Company or any of its subsidiaries.
Executive may not be terminated for Cause unless and until there has been
delivered to Executive written notice from the Board supplying the particulars
of Executive's acts or omissions that the Board believes constitute Cause, a
reasonable period of time (not less than 30 days) has been given to Executive
after such notice to either cure the same or to meet with the Board, with his
attorney if so desired by Executive, and following which the Board by action of
not less than two-thirds of its members furnishes to Executive a written
resolution specifying in detail its findings that Executive has been terminated
for Cause as of the date set forth in the notice to Executive.
(2) A "CHANGE OF CONTROL" shall be deemed to
have occurred if:
(i) Any "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934) other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of 50% or more of the Company's then
outstanding voting common stock; or
(ii) At any time during the period of three
(3) consecutive years (not including any period prior to the date
hereof), individuals who at the beginning of such period constituted
the Board (and any new director whose election by the Board or whose
nomination for election by the Company's shareholders were approved by
a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of
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such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority thereof; or
(iii) The shareholders of the Company
approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation (a) in which a
majority of the directors of the surviving entity were directors of the
Company prior to such consolidation or merger, and (b) which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being changed into voting securities of the surviving entity)
more than 50% of the combined voting power of the voting securities of
the surviving entity outstanding immediately after such merger or
consolidation; or
(iv) The shareholders approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
(3) A "DISABILITY" shall mean the absence of
Executive from Executive's duties with the Company on a full-time basis for 180
consecutive days, or 180 days in a 365-day period, as a result of incapacity due
to mental or physical illness which results in the Executive being unable to
perform the essential functions of his position, with or without reasonable
accommodation.
(4) A "GOOD REASON" shall mean any of the
following (without Executive's express written consent):
(i) Following a Change of Control, a
material alteration in the nature or status of Executive's title,
duties or responsibilities, or the assignment of duties or
responsibilities inconsistent with Executive's status, title, duties
and responsibilities;
(ii) A failure by the Company to continue in
effect any employee benefit plan in which Executive was participating,
or the taking of any action by the Company that would adversely affect
Executive's participation in, or materially reduce Executive's benefits
under, any such employee benefit plan, unless such failure or such
taking of any action adversely affects the senior members of corporate
management of the Company generally to the same extent;
(iii) A relocation of the Company's
principal executive offices, or Executive's relocation to any place
other than the principal executive offices, exceeding a distance of
fifty (50) miles from the Company's current executive office located in
Houston, Texas, except for reasonably required travel by Executive on
the Company's business;
(iv) Any material breach by the Company of
any provision of this Agreement; or
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(v) Any failure by the Company to obtain the
assumption and performance of this Agreement by any successor (by
merger, consolidation, or otherwise) or assign of the Company.
However, Good Reason shall exist with respect to an above specified matter only
if such matter is not corrected by the Company within thirty (30) days of its
receipt of written notice of such matter from Executive, and in no event shall a
termination by Executive occurring more than one hundred eighty (180) days
following the date of the event described above be a termination for Good Reason
due to such event.
(5) "TERMINATION DATE" shall mean the date Executive
is terminated for any reason pursuant to this Agreement.
(b) TERMINATION WITHOUT CAUSE, OR TERMINATION FOR GOOD REASON:
BENEFITS. In the event there is a termination by the Company without Cause, or
if Executive terminates for Good Reason within one hundred eighty (180) days
after a Change of Control (a "Termination Event"), this Agreement shall
terminate and Executive shall be entitled to the following severance benefits:
(1) For a period of twelve (12) months after the
Termination Date (unless the remainder of the Basic Term is less than
twelve (12) months, in which case, for an amount of time equal to the
remainder of the Basic Term), Base Salary (as defined in Paragraph
3(a)), at the rate and payable quarterly unless such termination is by
the Company without Cause, in which event such amount of Base Salary
shall be paid in a lump sum within ten (10) days of the Termination
Event.
(2) If there is a Change of Control or a Termination
Event any stock options ("Stock Awards") which Executive has received
under this Agreement shall vest immediately, and if there is a
Termination Event, all such Stock Awards shall be exercisable for
thirty (30) days from the date of such Termination Event or the
remainder of their term, whichever is less.
(3) To the extent not theretofore paid or provided,
the Company shall timely pay or provide to Executive any other amounts
or benefits required to be paid or provided or which Executive is
eligible to receive under any plan, program, policy or practice, or
contract or agreement of the Company and its affiliated companies for
the period of time equal to the remainder of the Basic Term (such other
amounts and benefits shall be hereinafter referred to as the "Other
Benefits"). Without limiting the preceding sentence and without
limiting any other provision of this Agreement, through December 31,
2002 the Company, at its sole expense, shall continue to provide
(through its own plan and/or individual policies) Executive (and
Executive's dependents) with health benefits no less favorable than the
group health plan benefits provided during such period to any senior
executive officer of the Company or any affiliated company (to the
extent any such coverage
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or benefits are taxable to Executive by reason of being provided under
a self-insured health plan of the Company or an affiliate, the Company
shall make Executive "whole" for the same on an after-tax basis). In
any event, the Other Benefits provided for pursuant to this Paragraph
shall be secondary to any benefits and coverage Executive (or his
dependents) receive from another employer.
(4) If any such Termination occurs on or after
October 1 of any year, such cash and/or stock bonus that Executive
otherwise would have received if such Termination had not taken place.
(5) If Executive receives any payments whether or not
pursuant to this Agreement which are subject to an excise tax imposed
under Section 4999 of the Internal Revenue Code of 1986, as amended, or
any similar tax imposed under federal, state, or local law
(collectively, "Excise Taxes"), the Company shall pay to Executive (on
or before the date on which the Company is required to withhold such
Excise Taxes), 1) an additional amount equal to all Excise Taxes then
due and payable, and 2) the amount necessary to defray Executive's
increased (federal, state, and local) tax liability arising due to
payment of the amount specified in this Subsection (5) which shall
include any costs and expenses, including penalties and interest
incurred by Executive in connection with any audit, proceedings, etc.
related to the payment of such Excise Taxes or this payment. For
purposes of calculating the amount payable to Executive under this
Paragraph, the federal and state income tax rates used shall be the
highest marginal federal and state rates applicable to ordinary income
in Executive's state of residence, taking into account any federal
income tax deductions or credits available to Executive for state
income taxes. The Company shall cause its independent auditors to
calculate such amount and provide Executive a copy of such calculation
at least ten (10) days prior to the date specified above for payment of
such amount. It is the intent of the Parties that this Subsection (5)
shall place Executive in the same net after-tax position Executive
would have been in had no payment been subject to an Excise Tax and,
notwithstanding anything herein to the contrary, it shall be construed
to effectuate said result.
(6) All accrued compensation and unreimbursed
expenses through the Termination Date. Such amounts shall be paid to
Executive in a lump sum in cash within thirty (30) days after the
Termination Date; and
(7) Executive shall be free to accept other
employment during such period, and there shall be no offset of any
employment compensation earned by Executive in such other employment
during such period against payments due Executive under this Paragraph
(4), and there shall be no offset in any compensation received from
such other employment against the Base Salary set forth above.
(c) TERMINATION IN EVENT OF DEATH: BENEFITS. If Executive's
employment is terminated by reason of Executive's death during the Basic Term,
this Agreement shall terminate
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without further obligation to Executive's legal representatives under this
Agreement, other than for payment of all accrued compensation, unreimbursed
expenses, the timely payment or provision of Other Benefits through the date of
death, and, if such death occurs on or after October 1 of any year, such cash or
stock bonus as Executive would otherwise have been awarded in such year if
Executive's death had not occurred. Such amounts shall be paid to Executive's
estate or beneficiary, as applicable, in a lump sum in cash within ninety (90)
days after the date of death. With respect to the provision of Other Benefits,
the term Other Benefits as used in this Paragraph 4(c) shall include, without
limitation, and Executive's estate and/or beneficiaries shall be entitled to
receive, benefits at least equal to the most favorable benefits provided by the
Company to the estates and beneficiaries of other executive level employees of
the Company under such plans, programs, practices, and policies relating to
death benefits, if any, as in effect with respect to other executives and their
beneficiaries at any time during the 120-day period immediately preceding the
date of death. Additionally, all Stock Awards shall be vested immediately and
shall be exercisable for the greater of one year after the date of such vesting
or the remaining term of such option.
(d) TERMINATION IN EVENT OF DISABILITY: BENEFITS. If
Executive's employment is terminated by reason of Executive's Disability during
the Basic Term, this Agreement shall continue in full force for a period of one
(1) year following such Disability and if such Disability occurs on or after
October 1 of any year Executive shall be entitled to the same cash or stock
bonus in such year that Executive would have been awarded if such Disability had
not occurred. Following such one (1) year period, this Agreement shall continue
in full force except that (a) the Base Salary shall be reduced by 50% and (b)
Executive shall not be entitled to any subsequent cash or stock bonuses. In
addition, all outstanding Stock Awards shall vest immediately upon such
termination due to Disability. Additionally, all Stock Awards shall be vested
immediately and shall be exercisable for the greater of one year after the date
of such vesting or the remaining term of such option.
(e) VOLUNTARY TERMINATION BY EMPLOYEE AND TERMINATION FOR
CAUSE: BENEFITS. Executive may terminate his employment with the Company without
Good Reason by giving written notice of his intent and stating an effective
Termination Date at least ninety (90) days after the date of such notice;
provided, however, that the Company may accelerate such effective date by paying
Executive through the proposed Termination Date and also vesting awards that
would have vested but for this acceleration of the proposed Termination Date.
Upon such a termination by Executive, except as provided in Paragraph 3(a), or
upon termination for Cause by the Company, this Agreement shall terminate, and
the Company shall pay to Executive all accrued compensation, unreimbursed
expenses and the Other Benefits through the Termination Date. Such amounts shall
be paid to Executive in a lump sum in cash within thirty (30) days after the
date of termination. In addition, all unvested stock options shall terminate and
all vested options will terminate thirty (30) days after the Termination Date.
(f) DIRECTOR POSITIONS. Executive agrees that upon termination
of employment, for any reason, at the request of the Chairman of the Board,
Executive will immediately tender his resignation from any and all Board
positions held with the Company and/or any of its subsidiaries
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and affiliates. If Executive remains as a director, after such termination,
Executive shall be compensated as an outside director.
5. NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY. Executive
recognizes and agrees that the benefit of not being employed at-will, is
provided in consideration for, among other things, the agreements contained in
this Section as well as the Stock Awards granted to Executive pursuant to this
Agreement. The Company agrees that while employed pursuant to this Agreement,
Executive will be provided with confidential information of Company; specialized
training on how to perform his duties; and contact with the Company's customers
and potential customers. Furthermore, in the event Executive is terminated
without Cause, or terminates for Good Reason; and more than one (1) year remains
on the existing Basic Term, then Executive shall receive additional
consideration in an amount equal to the quotient of the Base Salary divided by
12, which shall thereupon be multiplied by the number of months remaining in the
Basic Term minus 12 months, and which shall be paid in one lump sum within ten
(10) days of such termination.
In consideration of all of the foregoing, Executive agrees as follows:
(a) NON-COMPETITION DURING EMPLOYMENT. Executive agrees during
the Basic Term and the Consulting Period he will not compete with the Company by
engaging in the conception, design, development, production, marketing, or
servicing of any product or service that is substantially similar to the
products or services which the Company provides, and that he will not work for,
in any capacity, assist, or become affiliated with as an owner, partner, etc.,
either directly or indirectly, any individual or business which offers or
performs services, or offers or provides products substantially similar to the
services and products provided by Company, provided, Executive shall not be
prevented from owning no more than 2% of any Company whose stock is publicly
traded.
(b) CONFLICTS OF INTEREST. Executive agrees that during the
Basic Term and the Consulting Period, he will not engage, either directly or
indirectly, in any activity (a "Conflict of Interest") which might adversely
affect the Company or its affiliates, including ownership of a material interest
in any supplier, contractor, distributor, subcontractor, customer or other
entity with which the Company does business or accepting any material payment,
service, loan, gift, trip, entertainment, or other favor from a supplier,
contractor, distributor, subcontractor, customer or other entity with which the
Company does business, and that Executive will promptly inform the Chairman of
the Company as to each offer received by Executive to engage in any such
activity. Executive further agrees to disclose to the Company any other facts of
which Executive becomes aware which might in Executive's good faith judgment
reasonably be expected to involve or give rise to a Conflict of Interest or
potential Conflict of Interest.
(c) NON-COMPETITION AFTER TERMINATION. Executive agrees that
Executive shall not, at any time during the period of two (2) years after the
termination of the later of the Basic Term or the Consulting Period for any
reason, within any of the markets in which the Company has sold products or
services or formulated a plan to sell products or services into a market during
the last
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twelve (12) months of Executive's employ or which the Company enters into within
three (3) months thereafter, engage in or contribute Executive's knowledge to
any work which is competitive with or similar to a product, process, apparatus,
service, or development on which Executive worked or with respect to which
Executive had access to Confidential Information while employed by the Company;
provided, however, this Paragraph (c) shall not operate to prevent Executive
from engaging in retail insurance or re-insurance activities during such
two-year period to the extent such activities do not compete or permit any other
person or entity to compete with any business the Company or any of its
subsidiaries or affiliated companies were engaged in at the time of such
termination or which the Company enters into within three (3) months thereafter.
Following the expiration of said two (2) year period, Executive shall continue
to be obligated under the Confidential Information Paragraph of this Agreement
not to use or to disclose Confidential Information of the Company so long as it
shall not be publicly available. It is understood that the geographical area set
forth in this covenant is divisible so that if this clause is invalid or
unenforceable in an included geographic area, that area is severable and the
clause remains in effect for the remaining included geographic areas in which
the clause is valid.
(d) NON-SOLICITATION OF CUSTOMERS. Executive further agrees
that for a period of two (2) years after the termination of the Basic Term, he
will not solicit or accept any business from any customer or client or
prospective customer or client with whom Executive dealt or solicited while
employed by Company during the last twelve (12) months of his employment.
(e) NON-SOLICITATION OF EMPLOYEES. Executive agrees that for
the duration of the Basic Term, and for a period of two (2) years after the
termination of the Basic Term, he will not either directly or indirectly, on his
own behalf or on behalf of others, solicit, attempt to hire, or hire any person
employed by Company to work for Executive or for another entity, firm,
corporation, or individual.
(f) CONFIDENTIAL INFORMATION. Executive further agrees that he
will not, except as the Company may otherwise consent or direct in writing,
reveal or disclose, sell, use, lecture upon, publish or otherwise disclose to
any third party any Confidential Information or proprietary information of the
Company, or authorize anyone else to do these things at any time either during
or subsequent to his employment with the Company. This Section shall continue in
full force and effect after termination of Executive's employment and after the
termination of this Agreement. Executive's obligations under this Paragraph with
respect to any specific Confidential Information and proprietary information
shall cease when that specific portion of the Confidential Information and
proprietary information becomes publicly known, in its entirety and without
combining portions of such information obtained separately. It is understood
that such Confidential Information and proprietary information of the Company
include matters that Executive conceives or develops, as well as matters
Executive learns from other employees of Company. Confidential Information is
defined to include information: (1) disclosed to or known by the Executive as a
consequence of or through his employment with the Company; (2) not generally
known outside the Company; and (3) which relates to any aspect of the Company or
its business, finances, operation plans, budgets, research, or strategic
development. "Confidential Information" includes, but is not limited to the
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Company's trade secrets, proprietary information, financial documents, long
range plans, customer lists, employer compensation, marketing strategy, data
bases, costing data, computer software developed by the Company, investments
made by the Company, and any information provided to the Company by a third
party under restrictions against disclosure or use by the Company or others.
(g) RETURN OF DOCUMENTS, EQUIPMENT, ETC. All writings,
records, and other documents and things comprising, containing, describing,
discussing, explaining, or evidencing any Confidential Information, and all
equipment, components, parts, tools, and the like in Executive's custody or
possession that have been obtained or prepared in the course of Executive's
employment with the Company shall be the exclusive property of the Company,
shall not be copied and/or removed from the premises of the Company, except in
pursuit of the business of the Company, and shall be delivered to the Company,
without Executive retaining any copies, upon notification of the termination of
Executive's employment or at any other time requested by the Company. The
Company shall have the right to retain, access, and inspect all property of
Executive of any kind in the office, work area, and on the premises of the
Company upon termination of Executive's employment and at any time during
employment by the Company to ensure compliance with the terms of this Agreement.
(h) REAFFIRM OBLIGATIONS. Upon termination of his employment
with the Company, Executive, if requested by Company, shall reaffirm in writing
Executive's recognition of the importance of maintaining the confidentiality of
the Company's Confidential Information and proprietary information, and reaffirm
any other obligations set forth in this Agreement.
(i) PRIOR DISCLOSURE. Executive represents and warrants that
he has not used or disclosed any Confidential Information he may have obtained
from Company prior to signing this Agreement, in any way inconsistent with the
provisions of this Agreement.
(j) CONFIDENTIAL INFORMATION OF PRIOR COMPANIES. Executive
will not disclose or use during the period of his employment with the Company
any proprietary or Confidential Information or Copyright Works which Executive
may have acquired because of employment with an employer other than the Company
or acquired from any other third party, whether such information is in
Executive's memory or embodied in a writing or other physical form.
(k) BREACH. Executive agrees that any breach of Paragraphs
5(a), (c), (d), (e) or (f) above cannot be remedied solely by money damages, and
that in addition to any other remedies Company may have, Company is entitled to
obtain injunctive relief against Executive. Nothing herein, however, shall be
construed as limiting Company's right to pursue any other available remedy at
law or in equity, including recovery of damages and termination of this
Agreement and/or any payments that may be due pursuant to this Agreement.
(l) RIGHT TO ENTER AGREEMENT. Executive represents and
covenants to Company that he has full power and authority to enter into this
Agreement and that the execution of this
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Agreement will not breach or constitute a default of any other agreement or
contract to which he is a party or by which he is bound.
(m) EXTENSION OF POST-EMPLOYMENT RESTRICTIONS. In the event
Executive breaches Paragraphs 5(b), (d), or (e) above, the restrictive time
periods contained in those provisions will be extended by the period of time
Executive was in violation of such provisions.
(n) ENFORCEABILITY. The agreements contained in Section 5 are
independent of the other agreements contained herein. Accordingly, failure of
the Company to comply with any of its obligations outside of this Paragraph do
not excuse Executive from complying with the agreements contained herein.
(o) SURVIVABILITY. The agreements contained in Paragraphs
5(c)-(g) shall survive the termination of this Agreement for any reason.
6. ASSIGNMENT. This Agreement cannot be assigned by Executive. The
Company may assign this Agreement only to a successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and assets of the Company provided such
successor expressly agrees in writing reasonably satisfactory to Executive to
assume and perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession and assignment
had taken place. Failure of the Company to obtain such written agreement prior
to the effectiveness of any such succession shall be a material breach of this
Agreement.
7. BINDING AGREEMENT. Executive understands that his obligations under
this Agreement are binding upon Executive's heirs, successors, personal
representatives, and legal representatives.
8. NOTICES. All notices pursuant to this Agreement shall be in writing
and sent certified mail, return receipt requested, addressed as set forth below,
or by delivering the same in person to such party, or by transmission by
facsimile to the number set forth below (which shall not constitute notice).
Notice deposited in the United States Mail, mailed in the manner described
hereinabove, shall be effective upon deposit. Notice given in any other manner
shall be effective only if and when received:
If to Executive: Frank J. Bramanti
13707 Cottrell Court
Houston, Texas 77077
Fax: (281) 558-5461
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If to Company: HCC Insurance Holdings, Inc.
13403 Northwest Freeway
Houston, Texas 77040
Fax: (713) 462-2401
with a copy (which shall Arthur S. Berner, Esq.
not constitute notice) to: Haynes and Boone, LLP
1000 Louisiana Street,
Suite 4300
Houston, Texas 77002-5012
Fax: (713) 236-5652
9. WAIVER. No waiver by either party to this Agreement of any right to
enforce any term or condition of this Agreement, or of any breach hereof, shall
be deemed a waiver of such right in the future or of any other right or remedy
available under this Agreement.
10. SEVERABILITY. If any provision of this Agreement is determined to
be void, invalid, unenforceable, or against public policy, such provisions shall
be deemed severable from the Agreement, and the remaining provisions of the
Agreement will remain unaffected and in full force and effect.
11. ARBITRATION. In the event any dispute arises out of Executive's
employment with or by the Company, or separation/termination therefrom, whether
as an employee or as a consultant which cannot be resolved by the Parties to
this Agreement, such dispute shall be submitted to final and binding
arbitration. The arbitration shall be conducted in accordance with the National
Rules for the resolution of Employment Disputes of the American Arbitration
Association ("AAA"). If the Parties cannot agree on an arbitrator, a list of
seven (7) arbitrators will be requested from AAA, and the arbitrator will be
selected using alternate strikes with Executive striking first. The cost of the
arbitration will be shared equally by Executive and Company; provided, however,
the Company shall promptly reimburse Executive for all costs and expenses
incurred in connection with any dispute in an amount up to, but not exceeding
twenty percent (20%) of Executive's Base Salary (or, if the dispute arises
during the Consulting Period, Executive's Base Salary as in effect immediately
prior to the beginning of the Consulting Period) unless such termination was for
Cause in which event Executive shall not be entitled to reimbursement unless and
until it is determined he was terminated other than for Cause. Arbitration of
such disputes is mandatory and in lieu of any and all civil causes of action and
lawsuits either party may have against the other arising out of Executive's
employment with Company, or separation therefrom. Such arbitration shall be held
in Houston, Texas.
12. ENTIRE AGREEMENT. The terms and provisions contained herein shall
constitute the entire agreement between the parties with respect to Executive's
employment with Company during the time period covered by this Agreement. This
Agreement replaces and supersedes any and all existing Agreements entered into
between Executive and the Company relating generally to the same
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subject matter, if any, and shall be binding upon Executive's heirs, executors,
administrators, or other legal representatives or assigns.
13. MODIFICATION OF AGREEMENT. This Agreement may not be changed or
modified or released or discharged or abandoned or otherwise terminated, in
whole or in part, except by an instrument in writing signed by the Executive and
an officer or other authorized executive of Company.
14. UNDERSTAND AGREEMENT. Executive represents and warrants that he has
read and understood each and every provision of this Agreement, and Executive
understands that he has the right to obtain advice from legal counsel of choice,
if necessary and desired, in order to interpret any and all provisions of this
Agreement, and that Executive has freely and voluntarily entered into this
Agreement.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
16. JURISDICTION AND VENUE. With respect to any litigation regarding
this Agreement, Executive agrees to venue in the state or federal courts in
Harris County, Texas, and agrees to waive and does hereby waive any defenses
and/or arguments based upon improper venue and/or lack of personal jurisdiction.
By entering into this Agreement, Executive agrees to personal jurisdiction in
the state and federal courts in Harris County, Texas.
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IN WITNESS WHEREOF, the Parties have executed this Agreement in
multiple copies, effective as of the date first written above.
EXECUTIVE COMPANY
HCC INSURANCE HOLDINGS, INC.
/s/ FRANK J. BRAMANTI By: /s/ STEPHEN L. WAY
- ----------------------------------- ---------------------------------
FRANK J. BRAMANTI STEPHEN L. WAY,
Chief Executive Officer and
Chairman of the Board
Dated: June 16, 2000 Dated: June 17, 2000
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[SIGNATURE PAGE OF BRAMANTI EMPLOYMENT AGREEMENT]