Exhibit 10 (iii)(b)
EMPLOYMENT AGREEMENT
AGREEMENT by and between HSB Group, Inc., a Connecticut corporation having
its principal executive offices in Hartford, Connecticut, (the "Company") Engine
Acquisition Corporation, a Delaware corporation, for itself and its corporate
parent, American International Group, Inc. ("Merger Sub") and Richard H. Booth
(the "Executive") dated as of the 1st day of September, 2000
The Company, Merger Sub and American International Group, Inc., a Delaware
corporation ("AIG") have determined that it is in the best interests of their
respective shareholders to assure that the Company will have the continued
dedication of the Executive pending the merger of the Company and Merger Sub,
(the "Merger") pursuant to the Agreement and Plan of Merger between AIG, Merger
Sub and the Company dated as of August 17, 2000 (the "Merger Agreement") and to
provide the successor entity after the Merger with continuity of management.
Therefore, in order to accomplish these objectives, the Executive, Merger Sub
and the Company desire to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date" shall mean the effective date of
the Merger, provided the Executive is employed by the Company on that date. As
of the Effective Date, the prior Employment/Severance Agreement effective
November 29, 1999 ("Former Employment Agreement") between the Executive and the
Company shall terminate and become null and void. Upon any termination of the
transactions contemplated by the Merger Agreement, this Agreement will be
inapplicable and, provided, further, that if Executive is not employed by Merger
Sub immediately after the Effective Date, this Agreement will be inapplicable.
2. Employment Period. The Company hereby agrees to continue to employ the
Executive for the period commencing on the Effective Date and ending on the
fourth anniversary of such date (the "Employment Period"), and the Executive
hereby agrees to continue in the employ of the Company subject to the terms and
conditions of this Agreement.
3. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the Executive shall serve
Merger Sub in the same capacity he is currently serving the Company
with the appropriate authority, duties and responsibilities attendant
to such position or in such other comparable positions as the board of
Merger Sub (the "Board") may reasonably request. Any references to
Merger Sub herein shall include reference to any successor thereto.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote substantially all of his attention and time
during normal business hours to the business and affairs of the
Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive's reasonable
best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) serve, with prior
approval of the Board, on corporate, civic or charitable boards or
committees and (B) manage personal investments, so long as such
activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in
accordance with this Agreement.
(b) Compensation.
(i) Annual Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary")
of at least $750,000. Such Annual Base Salary shall be subject to
periodic review by the Board for increases in its sole discretion.
(ii) Annual Bonus. During the Employment Period, the Executive
shall be paid an annual cash bonus in accordance with Merger Sub's
performance based bonus program ("Annual Bonus"); provided, however,
that the bonus award for 2001 as a percentage of Annual Base Salary
and the corresponding target levels shall be those utilized in the
annual incentive plan that was applicable to the Executive for the
year 2000 and the applicable performance targets shall be based on a
formula relating to the operating plan similar to the one established
for 2000 as agreed between the Executive and the Board. The Annual
Bonus shall be paid in accordance with Merger Sub's customary
practices.
(iii) Retention Bonus. If the Executive is employed with Merger
Sub on the first anniversary of the Effective Date, the Executive
shall be paid a retention bonus equal to the Annual Base Salary (the
"Retention Bonus"). The Retention Bonus shall be paid within one month
of such anniversary.
(iv) Other Employee Benefit Plans. During the Employment Period,
except as otherwise expressly provided herein, the Executive shall be
eligible to participate in all employee benefit, welfare and other
plans, practices, policies and programs and fringe benefits
(including, without limitation, stock options and other equity based
compensation plans) of Merger Sub (collectively, "Employee Benefit
Plans") on a basis no less favorable than that provided to other
senior executive officers of the Company and other similarly situated
executives of other AIG subsidiaries; provided, however, that nothing
shall require Executive's participation in any Employee Benefit Plans
in which the participation of any individual employee is
discretionary. Executive's prior service with the Company shall be
taken into account for all purposes except benefit accruals.
(v) Supplemental Pension Benefits. Merger Sub shall provide the
Executive, in addition to any retirement benefits which the Executive
would be entitled under any tax-qualified defined benefit pension
plan, or non-qualified supplemental or excess benefit plan relating
thereto, which is maintained by Merger Sub and designed to provide the
Executive with defined benefit type retirement benefits, other than
the Pre-Retirement Death Benefit and Supplemental Pension Agreement
between the Executive and the Company, dated November 29, 1999
(collectively, the "Pension Plans"), an additional retirement benefit
in respect to each such Pension Plan equal to the excess of (i) a
retirement benefit determined under such Pension Plan as if the
Executive were fully vested, had accumulated an additional ten (10)
years of "credited service" (as such term is defined in such Pension
Plan), and had "earnings" under such Pension Plan determined in
accordance with "Exhibit A" of the Former Employment Agreement
(notwithstanding the termination of such Former Employment Agreement),
over (ii) any vested retirement benefit which the Executive has
accrued pursuant to the provisions of such Pension Plan. The
Executive's additional retirement benefit determined in accordance
with the foregoing shall be in addition to any additional retirement
benefit or accumulation of credited service provided for under Section
5(a) of this Agreement and shall commence and be paid at the same time
and in the same form as the retirement benefits payable under the
Pension Plans.
4. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If
Merger Sub determines in good faith that the Disability of the Executive
has occurred during the Employment Period (pursuant to the definition of
Disability set forth below), it may give to the Executive written notice in
accordance with Section 11(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's
employment with Merger Sub shall terminate effective on the 30th day after
receipt of such notice by the Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Executive shall
not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with Merger Sub on a full-time basis
for 180 business days during any consecutive twelve month period as a
result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by Merger Sub or its
insurers and acceptable to the Executive or the Executive's legal
representative.
(b) Cause. Merger Sub may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:
(i) the engaging by the Executive in gross misconduct which is
materially and demonstrably injurious to Merger Sub or illegal
conduct,
(ii) the conviction of a felony or a guilty or nolo contendere
plea to a felony by the Executive, or
(iii) the continued failure by the Executive to substantially
perform the Executive's duties with Merger Sub after written demand
for substantial performance is delivered to the Executive by the
Board, which demand states a reasonable period of time within which
the Executive must correct such failure.
Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer (while the Executive does not serve as such) or based upon the advice of
counsel for Merger Sub shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of Merger Sub
and shall under no circumstances constitute misconduct. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than 75% of the entire membership of
the Board (excluding the Executive) at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i), (ii) or (iii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean in the absence of a written consent of the Executive:
(i) the assignment to the Executive of any duties materially
inconsistent with the Executive's position, authority, duties or
responsibilities as contemplated by this Agreement, or any other
action by Merger Sub which results in a material diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an action not taken in bad faith and which is remedied by
Merger Sub promptly after receipt of notice thereof given by the
Executive and further excluding for this purpose the fact that Merger
Sub will be a non-publicly traded subsidiary of AIG after the
Effective Date;
(ii) any failure by Merger Sub to comply with the provisions of
Section 3 (b) of this Agreement, other than a failure not occurring in
bad faith and which is remedied by Merger Sub promptly after receipt
of notice thereof given by the Executive;
(iii) any purported termination by Merger Sub of the Executive's
employment otherwise than as expressly permitted by this Agreement;
(iv) any failure by Merger Sub to comply with and satisfy Section
10(c) of this Agreement; or
(v) any requirement that the Executive (A) be based anywhere more
than fifty (50) miles from the office where the Executive is currently
located or (B) travel on Company business to an extent substantially
greater than the Executive's current travel obligations.
(d) Notice of Termination. Any termination by Merger Sub or by the
Executive shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 11(b) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written
notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated and (iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of such
notice). The failure by the Executive or Merger Sub to set forth in the
Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive
or Merger Sub, respectively, hereunder or preclude the Executive or Merger
Sub, respectively, from asserting such fact or circumstance in enforcing
the Executive's or Merger Sub's rights hereunder.
(e) Date of Termination. "Date of Termination" means if the
Executive's employment is terminated by Merger Sub other than for
Disability, or by the Executive, the date of receipt of the Notice of
Termination or any later date specified therein within 30 days of such
notice, and if the Executive's employment is terminated by reason of death
or Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
5. Obligations of the Company upon Termination.
(a) Any Reason. If, during the Employment Period, the Executive's
employment is terminated for any reason, Merger Sub shall (i) pay to the
Executive the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid and any other bonus payments
for a prior bonus year that have been earned but not yet paid and (ii) to
the extent not theretofore paid or provided, pay or provide to the
Executive any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive under any plan, program, policy
or practice or contract or agreement of Merger Sub and its affiliated
companies through the Date of Termination and Executive's other normal
post-termination compensation and benefits (including payments under
retirement and retiree medical programs), if any, as such payments become
due; provided that, for purposes of any retiree medical benefits insurance
program then in effect, Executive shall be deemed to have satisfied any
years of service and retirement status requirements as of the Date of
Termination in order to be eligible to receive benefits under such program,
which benefits shall commence immediately following the Date of Termination
or, if applicable, the expiration of the period of benefit continuation
pursuant to Section 5(b)(ii). In addition, notwithstanding the fact that
the Former Employment Agreement has been terminated, the Executive shall be
entitled to receive from Merger Sub the benefits set forth in Section 5.5
of such Former Employment Agreement as if such Former Employment Agreement
were still in effect. The payments and benefits provided under Sections 5
(b), 7 and 8 below are in addition to the payments required under this
Section 5(a).
(b) Good Reason; Other Than for Cause. If, during the Employment
Period, Merger Sub shall terminate the Executive's employment other than
for Cause, or the Executive shall terminate employment for Good Reason:
(i) Merger Sub shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination an amount equal to the
product of (x) the sum of the Executive's Annual Base Salary and the
average Annual Bonus paid to the Executive (including as paid for this
purpose any compensation earned but deferred, whether or not at the
election of the Executive and whether or not vested) for the three
years prior to the Date of Termination or such shorter number of full
or partial fiscal years during which the Executive was employed by the
Company and/or Merger Sub prior to the Date of Termination (the
"Average Annual Bonus") and (y) 3.0 (if the Date of Termination is on
or before the second anniversary of the Effective Date), 2.0 (if the
Date of Termination is after the second anniversary but on or before
the third anniversary of the Effective Date) or 1.0 (if the Date of
Termination is after the third anniversary but on or before the fourth
anniversary of the Effective Date), provided that any such amount
shall be decreased by the amount of any Retention Bonus paid to the
Executive.
(ii) for the remainder of the Employment Period, Merger Sub shall
continue to provide insurance, medical, dental and other welfare
benefits to the Executive, his spouse and eligible dependents on the
same basis as such benefits are then currently provided to its
employees ("Welfare Benefits"); provided that any payments received
with respect to such Welfare Benefits shall be secondary to any
payments made pursuant to other coverage obtained by the Executive.
(c) Death. If, during the Employment Period, the Executive shall
terminate employment due to death, notwithstanding the fact that the Former
Employment Agreement has been terminated, Executive's spouse shall be
entitled to receive from Merger Sub the benefits set forth in Section 5.6
of such Former Employment Agreement as if such Former Employment Agreement
were still in effect.
6. Non-exclusivity of Rights. Except as specifically provided and subject
to Section 11, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 11(f), shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement; provided that the Executive shall not be eligible
for severance benefits under any other program or policy of the Company.
7. No Mitigation. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement, and such
amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay, to the fullest extent permitted, all
reasonable legal fees and expenses which the Executive may reasonably incur as a
result of any contest pursued or defended against in good faith by the Executive
regarding the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement). Such payments shall be made within 10 business days of the delivery
of Executive's written request for payment accompanied by such evidence of the
fees and expenses incurred by Executive as Merger Sub may reasonably request.
8. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any
payment or distribution by Merger Sub to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined without regard
to any additional payments required under this Section 8) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive
of all taxes (including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income and employment taxes
(and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 8(c), all determinations
required to be made under this Section 8, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be
made by Merger Sub's independent auditors or such other certified public
accounting firm reasonably acceptable to the Executive as may be designated
by Merger Sub (the "Accounting Firm") which shall provide detailed
supporting calculations both to Merger Sub and the Executive within 15
business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by Merger Sub;
provided, however, that for purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state and locality of
the Executive's residence on the Date of Termination, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes. All fees and expenses of the Accounting Firm
shall be borne solely by Merger Sub. Any Gross-Up Payment, as determined
pursuant to this Section 8, shall be paid by Merger Sub to the Executive
within five days of the later of (i) the due date for the payment of any
Excise Tax, and (ii) the receipt of the Accounting Firm's determination.
Any determination by the Accounting Firm shall be binding upon Merger Sub
and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by Merger Sub should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the
event that Merger Sub exhausts its remedies pursuant to Section 8(c) and
the Executive thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by Merger Sub to
or for the benefit of the Executive.
(c) The Executive shall notify Merger Sub in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment
by Merger Sub of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprize Merger Sub of the
nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to Merger
Sub (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If Merger Sub notifies the Executive in
writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give Merger Sub any information reasonably requested by
Merger Sub relating to such claim,
(ii) take such action in connection with contesting such claim as
Merger Sub shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by Merger
Sub,
(iii) cooperate with Merger Sub in good faith in order
effectively to contest such claim, and
(iv) permit Merger Sub to participate in any proceedings relating
to such claim;
provided, however, that Merger Sub shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income or employment tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 8(c), Merger Sub shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as
Merger Sub shall determine; provided, however, that if Merger Sub directs the
Executive to pay such claim and sue for a refund, Merger Sub shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, Merger Sub's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
Merger Sub pursuant to Section 8(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall promptly
pay to Merger Sub the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by Merger Sub pursuant to
Section 8(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and Merger Sub does not
notify the Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then
such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
9. Covenants Not to Solicit Company Employees; Confidential Information.
(a) During the term of this Agreement and for a period of one year
after the Date of Termination by the Company or the Executive for any
reason, the Executive further agrees that the Executive shall not, in any
manner, directly or indirectly, solicit any person who is an employee of
the Company to apply for or accept employment with any competing business.
The term "solicit" as used in this Agreement means any communication of any
kind whatsoever, regardless of by whom initiated, inviting, encouraging or
requesting any person or entity to take or refrain from taking any action.
(b) Executive agrees that, during the term of this Agreement and at
all times thereafter, he shall continue to hold in a fiduciary capacity for
the benefit of the Company, all secret or confidential information,
knowledge or data relating to the Company and any other business or entity
in which, at any relevant time, the Company holds an equity (voting or
non-voting) interest equal to or greater than 10% (an "Affiliate") that
shall have been obtained by Executive during his employment by or
affiliation with the Company or its Affiliates, and that shall not be
public knowledge other than by acts of Executive and his representative
("Confidential Material"). Executive shall not, without the prior written
consent of the Chief Executive Officer of the Company, communicate or
divulge any Confidential Material to anyone other than the Company and
those designated by it.
(c) Executive acknowledges that any material violation of the
foregoing covenants in Section 9 could cause the Company irreparable harm
and he agrees that the Company shall be entitled to injunctive relief
restraining Executive from actual or threatened breach of such covenants,
and that if a bond is required to be posted in order for the Company to
secure such relief, said bond need only be in a nominal amount. Subject to
Section 9(d) below, the right of the Company to seek injunctive relief
shall be in addition to any other remedies available to the Company with
respect to an alleged or threatened breach.
(d) Nothing in Section 9 hereof shall be construed to adversely affect
the rights that the Company would possess in the absence of the provisions
of such sections.
(e) The provision by the Company of the compensation and benefits
described under this agreement, as applicable, hereunder are conditioned
upon Executive's compliance with the terms described under this Agreement
and the execution, non-revocation and honoring of a release of claims and
covenant not to sue in favor of the Company with respect to the obligations
of the Company under the Former Employment Agreement, which release shall
be in the form generally used by the Company for such purposes.
(f) The terms and provisions of this Section 9 are intended to be
separate and divisible provisions and if, for any reason, any one or more
of them is held to be invalid or unenforceable, neither the validity nor
the enforceability of any other provision of this Agreement shall thereby
be affected. The parties hereto acknowledge that the potential restrictions
on the Executive's future employment imposed by this Section 9 are
reasonable in both duration and geographic scope and in all other respects.
If for any reason any court of competent jurisdiction shall find any
provisions of this Section 9 unreasonable in duration or geographic scope
or otherwise, the Executive and the Company agree that the restrictions and
prohibitions contained herein shall be effective to the fullest extent
allowed under applicable law in such jurisdiction.
(g) The parties acknowledge that this Agreement would not have been
entered into and the benefits described in Sections 3 or 5 would not have
been promised in the absence of the Executive's promises under this Section
9.
(h) Use of the term Company in this Section 9 shall also include
Merger Sub, AIG and their subsidiaries.
10. Successors.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to 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 had taken place. As used in this Agreement, "Company" shall mean
the Company and/or Merger Sub as hereinbefore defined and any successor to
its business and/or assets as aforesaid.
11. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive, at the address written below Executive's name on
the signature page of this Agreement
If to the Company:
American International Group, Inc.
70 Pine Street
New York, New York
Telecopy Number: 212-425-2175
Attention: Ernest Patrikis, Esq.
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for
Good Reason pursuant to Section 4(c)(i)-(v) of this Agreement, shall not be
deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
(f) From and after the Effective Date this Agreement shall supersede
any other employment agreement between the parties with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
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Richard H. Booth
144 Hollister Way South
Glastonbury, Connecticut 06033
HSB GROUP, INC.
By
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Title:
MERGER SUB, INC.
By
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Title: