EXHIBIT 99.2
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made and entered into by and
between ProAssurance Corporation, a Delaware corporation ("ProAssurance") and A.
Derrill Crowe, an individual ("Crowe") effective as of July 1, 2007 (the
"Commencement Date").
RECITALS:
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Crowe has served as the chief executive officer of ProAssurance and its
predecessors and subsidiaries, Medical Assurance, Inc. ("MAI") and The Medical
Assurance Company, Inc. ("TMAC") since their respective dates of organization.
During this period, the terms of Crowe's employment have been set forth in that
certain employment Agreement dated as of January 1, 1982, between Crowe and TMAC
(then known as Mutual Assurance Society of Alabama) (the "Prior Employment
Agreement"), and the terms of the Prior Employment Agreement have been amended
and continued in effect through the date hereof.
Effective June 29, 2007, Crowe has resigned as chief executive officer of
ProAssurance and its subsidiaries. Crowe will continue as an employee of
ProAssurance (or a subsidiary) in a non-executive capacity, but he will continue
as a director of ProAssurance and will serve as the non-executive Chairman of
the Board of ProAssurance's Board of Directors. ProAssurance and Crowe desire to
terminate the Prior Employment Agreement as of the date of his resignation as
chief executive officer and to enter into this agreement to set forth the terms
and conditions of Crowe's employment with ProAssurance from and after his
resignation.
NOW, THEREFORE, THESE PREMISES CONSIDERED, Crowe and ProAssurance hereby
agree as follows:
1. Resignation and Termination of Prior Employment Agreement. Crowe hereby
resigns as Chief Executive Officer of ProAssurance and as an officer and
director of each of the direct and indirect subsidiaries of ProAssurance
effective June 29, 2007 (the "Effective Date"). Crowe agrees that the Prior
Employment Agreement shall terminate and be of no further force and effect on
and as of the Effective Date, and that neither Crowe, ProAssurance nor TMAC
shall have any further rights under said Prior Employment Agreement except for
accrued and unpaid base salary through and including the Effective Date.
2. Employment Term. ProAssurance hereby employs Crowe, and Crowe accepts
employment, upon the terms and conditions of this Agreement for the term running
from the Commencement Date to and including December 31, 2009 (the "Term"). At
the expiration of the Term, Crowe's employment with ProAssurance may continue on
such terms as may be agreed upon by Crowe and the Chief Executive Officer of
ProAssurance, subject to approval by the Board of Directors of ProAssurance.
3. Offices; Directorship; Other Activities.
3.1 Office and Duties.
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(a) From and after the Commencement Date, Crowe shall serve as Chairman of
the Board of ProAssurance. Crowe shall have the duties and authority as are
prescribed by the bylaws of ProAssurance for such office on the date of this
Agreement, and other duties and responsibilities as may be assigned to him by
ProAssurance's Board of Directors (the "Board"), provided that such assignments
by the Board are customary and appropriate for the non-executive serving as
Chairman of the Board of ProAssurance. Crowe shall be given such authority as is
appropriate to carry out his duties.
(b) At the request of the Chief Executive Officer of ProAssurance, Crowe
shall assist the Chief Executive Officer by performing such duties consistent
with the office of non-executive Chairman, including appearance at industry
conferences and assistance with merger and acquisition activities.
(c) Crowe shall devote such attention and time to the business and affairs
of ProAssurance as may be reasonably required to discharge his duties under this
Agreement.
3.2 Other Activities. Crowe may directly or indirectly participate in other
business ventures, investments or charitable organizations, and may also deliver
lectures, fulfill speaking engagements or teach at educational institutions and
may manage personal investments, so long as such activities do not materially
interfere with Crowe's responsibilities to ProAssurance; provided that Crowe may
not invest in any business that does business with, or competes with,
ProAssurance except for investment in a business where Crowe's percentage of
ownership is insignificant; and provided further that Crowe shall remain subject
to the restrictions set forth in the ProAssurance Code of Ethics and Conduct.
4. Compensation and Benefits.
4.1 Base Salary. Crowe will continue his current base salary at the
annualized rate of $715,000 through December 31, 2007. For calendar years 2008
and 2009, ProAssurance will pay to Crowe a base salary at the rate of $500,000
per annum ("Base Salary"). Base Salary will be payable in periodic installments
in accordance with ProAssurance's customary practices. Amounts payable will be
reduced by standard withholding and other authorized deductions.
4.2 Other Incentive Compensation. ProAssurance will pay Crowe the annual
incentive compensation previously awarded to Crowe for the calendar year ending
December 31, 2007, if and to the extent that the incentive compensation is
earned in accordance with the 2007 Incentive Award Guidelines as adopted by the
Board on March 7, 2007; provided that the amount of the earned annual incentive
compensation payable to Crowe shall be subject to proration reflecting Crowe's
six months of service as Chief Executive Officer such that Crowe shall receive
50% of the annual incentive compensation that would have been awarded for the
full calendar year 2007. The annual incentive compensation will be paid at such
time and manner as the annual incentive compensation is paid to ProAssurance's
senior executive officers consistent with past practice but not later than March
15, 2008.
4.3 Outstanding Equity Compensation. During the Term, Crowe shall continue
as a participant under the 1995 Incentive Compensation Stock Plan, as amended
(the "1995 Plan") and the 2004 Equity Incentive Plan, as amended (the "2004
Plan"). All grant agreements for stock options granted under the 1995 Plan and
the 2004 Plan and performance share agreements for performance shares granted
under the 2004 Plan in effect on the Effective Date shall continue and remain in
effect in accordance with their respective terms.
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4.4 Other Savings and Retirement Plans. During the Term, Crowe shall be
entitled to participate in all savings and retirement plans, practices, policies
and programs applicable generally to other employees of ProAssurance. The
current savings and retirement plans, all of which may be terminated or amended
by the Board, include the Equity Plan, the Executive Non-Qualified Excess Plan
and Trust, the Amended and Restated ProAssurance Corporation Stock Ownership
Plan, and the ProAssurance Group Savings and Retirement Plan.
4.5 Welfare Benefit Plans. During the Term, Crowe shall be eligible for
participation in and shall receive all benefits under welfare benefit plans
(including group health, disability and life insurance plans and programs) as
shall be in effect from time to time, to the extent applicable to other
employees of ProAssurance.
4.6 Personal Use of Airplane. During such time that ProAssurance owns or
regularly leases corporate aircraft for business purposes during the Term, Crowe
shall be entitled to personal use of corporate aircraft owned or leased by
ProAssurance, if any, in accordance with policies and procedures established by
the Board; provided that the policies and procedures shall allow Crowe an annual
allowance of up to 50 hours of personal use on an owned or leased corporate
aircraft in each year during the Term. For purposes of calendar year 2007, the
personal use of the airplane shall include Crowe's hours of personal use before
and after the Effective Date.
4.7 Reimbursement of Expenses. Crowe shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by Crowe in accordance with
the policies, practices and procedures generally applicable to senior Executive
officers of ProAssurance.
4.8 Office and Support Staff. ProAssurance shall provide Crowe an office
and clerical support.
4.9 Vacations and Leave.
(a) Crowe shall be entitled to vacation and sick leave (without loss of
pay) in accordance with ProAssurance's policies in effect from time to time, and
other personal and family leave as may be provided by law.
(b) During the Term, at such reasonable times as the Board shall permit,
Crowe shall be entitled, without loss of pay, to be absent from the performance
of his duties under this Agreement.
4.10 Conflict. In the event of any conflict between this Agreement and the
terms of any benefit, severance, deferred compensation, incentive or similar
plan or agreement in which Crowe is or becomes a participant during the Term
(other than a stockholder-approved plan or ERISA plan), the provisions of this
Agreement shall apply unless Crowe makes specific written election otherwise,
but Crowe shall not be entitled to duplicative payments or benefits.
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5. Termination of Employment.
5.1 Death, Disability or Retirement. Crowe's employment shall terminate
upon Crowe's death, Disability or Retirement during the Term.
(a) For purposes of this Agreement, "Disability" means a serious injury or
illness that requires Crowe to be under regular care of a licensed medical
physician and renders Crowe incapable of performing the essential function of
Crowe's position for twelve (12) consecutive months as determined by the Board
in good faith and upon receipt of and in reliance on competent medical advice
from one or more individuals selected by the Board, who are qualified to give
professional medical advice. Crowe will submit to such medical or psychiatric
examinations and tests as such medical professional deems necessary to make any
determination of Crowe's Disability and consent to such medical professional
sharing the results of such examination with a representative of the Board.
(b) For purposes of this Agreement, "Retirement" means voluntary retirement
by Crowe when eligible to receive retirement benefits under a retirement plan
then in effect for ProAssurance, Crowe having reached the age of mandatory
retirement (if such requirement then exists for ProAssurance's senior Executive
officers) or any other retirement by Crowe with the consent of the Board.
ProAssurance acknowledges that Crowe is eligible for retirement at his election.
5.2 Termination by ProAssurance with Cause. ProAssurance may terminate
Crowe's employment during the Term for Cause. For purposes of this Agreement,
the term "Cause" means: (i) Crowe has been convicted in a federal or state court
of a crime classified as a felony; (ii) action or inaction by Crowe (A) that
constitutes embezzlement, theft, misappropriation or conversion of assets of
ProAssurance or its subsidiaries which alone or together with related actions or
inactions involve assets of more than a de minimus amount or that constitutes
intentional fraud, gross malfeasance of duty, or conduct grossly inappropriate
to Crowe's office, and (B) such action or inaction has adversely affected or is
likely to adversely affect the business of ProAssurance or its subsidiaries,
taken as a whole, or has resulted or is intended to result in a direct or
indirect gain or personal enrichment of Crowe to the detriment of ProAssurance;
or (iii) Crowe has been grossly inattentive to, or in a grossly negligent manner
failed to competently perform, Crowe's job duties and the failure was not cured
within 45 days after written notice from ProAssurance. Any termination of
Crowe's employment by ProAssurance for Cause shall be communicated by a Notice
of Termination (as defined in Section 5.4 below) to Crowe, which Notice of
Termination shall be in writing and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Crowe's
employment under this provision. Crowe shall not be deemed to have been
terminated for Cause unless and until (x) he receives a Notice of Termination
from ProAssurance; (y) he is given the opportunity to be heard before the Board;
and (z) the Board finds in its good faith opinion, Crowe was guilty of the
conduct set forth in the Notice of Termination.
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5.3 Termination by Crowe for Good Reason. Crowe may terminate his
employment with ProAssurance for Good Reason. For purposes of this Agreement,
"Good Reason" shall constitute any of the following circumstances if they occur
without Crowe's express written consent during the Term: (i) a material
reduction in Crowe's Base Salary as set forth in Section 4.1 hereof; or (ii) a
breach by ProAssurance of any provision of this Agreement in any material
respect; or (iii) the occurrence of a Change of Control (as herein defined).
Except with respect to a Change of Control, Crowe must provide ProAssurance with
a Notice of Termination no later than 45 calendar days after Crowe knows or
should have known that Good Reason has occurred. Following delivery of Crowe's
Notice of Termination, ProAssurance shall have 45 calendar days to rectify the
circumstances causing the Good Reason. If ProAssurance fails to rectify the
events causing Good Reason within said 45 day period, or if ProAssurance
delivers to Crowe written notice stating that the circumstances cannot or shall
not be rectified, Crowe shall be entitled to assert Good Reason and terminate
employment as of the expiration of the 45 day period after delivery of Crowe's
Notice of Termination. Should Crowe fail to provide the required Notice of
Termination in a timely manner, Good Reason shall not be deemed to have occurred
as a result of the event. The Term shall not be deemed to have expired during
the notice period, however, as long as Crowe has provided Notice of Termination
within the Term.
For purposes of this Agreement, the following terms have the meanings set
forth below:
(a) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(b) "Person" is used as such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act.
(c) "Beneficial Ownership" is used as such term is used within the meaning
of Rule 13d-3 promulgated under the Exchange Act.
(d) "Change of Control" shall mean the occurrence during the Term of any
one of the following events:
(i) an acquisition of the voting securities of ProAssurance by any
Person, immediately after which such Person has Beneficial Ownership of more
than 50.1% of the combined voting power of ProAssurance's then outstanding
voting securities;
(ii) a merger, consolidation or reorganization involving ProAssurance in
which an entity other than ProAssurance is the surviving entity or in which
ProAssurance is the surviving entity and the stockholders of ProAssurance
immediately preceding such transaction will own less than 50.1% of the
outstanding voting securities of the surviving entity; or
(iii) the sale or other disposition of substantially all of the assets
of ProAssurance (as defined in the regulations under Section 409A of the Code)
and ProAssurance ceases to function on a going forward basis as an insurance
holding company system that provides medical professional liability insurance.
The transactions as described in (i), (ii) and (iii) shall be referred to
as "Change of Control Transactions." In no event shall a Change of Control be
deemed to have occurred, with respect to Crowe, if Crowe is part of a purchasing
group which consummates a Change of Control Transaction. Crowe shall be deemed
"part of a purchasing group" for purposes of the preceding sentence if Crowe is
an equity participant or has agreed to become an equity participant in the
purchasing company or group (except for passive ownership of less than 5% of the
stock of the purchasing company or ownership of equity participation in the
purchasing company or group as a result of the conversion or exchange of
ProAssurance's common stock beneficially owned by Crowe.
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5.4 Notice and Date of Termination. Any termination by ProAssurance, or by
Crowe, shall be communicated by Notice of Termination to the other party given
in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice
of Termination" is a written notice which indicates the specific termination
provision in this Agreement relied upon and sets forth such additional
information as may be required in Section 5.2 or Section 5.3 hereof, to the
extent applicable. The "Date of Termination" means (i) if Crowe's employment is
terminated by ProAssurance for Cause, the Date of Termination shall be as of the
date of Crowe's receipt of ProAssurance's Notice of Termination; (ii) if Crowe's
employment is terminated by Crowe for Good Reason, the Date of Termination shall
be the last day of the 45 day period after delivery of Crowe's Notice of
Termination; (iii) if Crowe's employment is terminated due to a Change of
Control, the Date of Termination shall be the date of closing of the Change of
Control Transaction; (iv) if Crowe's employment is terminated by reason of death
of Crowe, the date of death shall be the Date of Termination; or (v) if Crowe's
employment is terminated by reason of Disability, the Date of Termination shall
be the date of determination of Disability by the Board; (vi) if Crowe's
employment is terminated by reason of Retirement, the Date of Termination shall
be the last day of employment of Crowe; (vii) if Crowe's employment is
terminated by ProAssurance other than for Cause, death, Disability or
Retirement, the Date of Termination shall be the date of receipt of the Notice
of Termination by Crowe.
6. Certain Benefits Upon Termination.
6.1 Accrued Salary and Benefits. Crowe shall be entitled to receive the
following upon any termination of employment: (i) accrued and unpaid Base Salary
as of the Date of Termination; (ii) if the termination occurs during 2007,
unpaid annual incentive compensation payable under Section 3.2(a) hereof; (iii)
accrued vacation and sick leave, if any, on Date of Termination in accordance
with the then current policy of ProAssurance with respect to terminated
employees generally; and (iv) benefits under ProAssurance's employee benefit
plans in which Crowe was a participant on the Date of Termination, which
benefits shall be vested, paid or provided in accordance with the terms of said
employee benefit plans.
6.2 Severance Benefits.
(a) If at any time prior to December 31, 2009, ProAssurance terminates the
employment of Crowe for any reason other than Cause, death, Disability or
Retirement, or if Crowe terminates his employment with ProAssurance for Good
Reason, and Crowe, within sixty (60) days after the Date of Termination, signs
the release form that is attached to this Agreement as Exhibit A (the
"Release"), Crowe shall receive an amount equal to a sum of the amounts payable
as Base Salary from the Date of Termination at the then current rate to December
31, 2009 (the "Severance Benefits"). Subject to the delivery of the executed
Release by Crowe, the Severance Benefits shall be paid in cash or good funds in
equal monthly installments during the Restricted Period (as defined in Section
7.1 hereof) on the first day of the calendar month that occurs not less than
seven (7) days after the execution of the Release and ending of the first day of
the last full calendar month in the Restricted Period; provided that the
obligation of ProAssurance to pay such Severance Benefits to Crowe shall be
subject to termination under provisions of Section 7.2 hereof in the event Crowe
should violate the covenant set forth therein; and provided further that the
payment of such Severance Benefits shall be payable in lump sum by ProAssurance
on termination of this Agreement by Crowe for Good Reason as a result of a
Change of Control. ProAssurance shall withhold from any amounts payable under
this Agreement all federal, state, city or other income and employment taxes
that shall be required. Notwithstanding the foregoing, if Crowe is a "specified
employee" within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue
Code of 1986, as amended, the payment schedule for Severance Benefits shall be
modified or adjusted to provide that no payments shall be made until the
expiration of six (6) months following the Date of Termination. In the event
payments are so delayed, a lump sum payment of the accumulated unpaid amounts
attributable to the six (6) month period shall be made to Crowe on the first day
of the seventh month following the Date of Termination. This six month delay
shall not apply to any Severance Benefits which are not subject to the
requirements of Code Section 409A by reason of their being separation pay upon
an involuntary separation from service and their meeting the requirements and
imitations of the regulations under the above referenced Code section. In no
event shall the aggregate amount of the Severance Benefits be reduced as a
result of such modification or adjustment.
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(b) After termination of employment, ProAssurance agrees that Crowe and his
family (as herein defined) shall be entitled to participate, at Crowe's election
and expense, in the medical welfare benefit plan maintained for employees of
ProAssurance and its subsidiaries, as the same may be modified or replaced from
time to time, (the "Medical Plan") if and to the extent ProAssurance can legally
allow such participation in the Medical Plan. Crowe's family shall include his
spouse and their four (4) minor children (each a "Child" and together the
"Children"). Crowe and his spouse shall be eligible to participate in the
Medical Plan as herein provided until none of the Children are eligible to
participate in the Medical Plan. Each Child shall be eligible to participate in
the Medical Plan as herein provided until the Child reaches 21 years of age,
except that a Child who is enrolled as a full time student at a college or
graduate school shall be eligible to participate in the Medical Plan so long as
such Child remains a full time student until the Child reaches 25 years of age.
The obligation of ProAssurance to allow Crowe's family to participate in the
Medical Plan shall survive Crowe's death.
(c) Crowe shall be under no duty or obligation to seek or accept other
employment and shall not be required to mitigate the amount of severance
benefits provided under this Agreement by seeking employment or otherwise.
6.3 Parachute Payment Tax Reimbursement.
(a) If any payment or benefit within the meaning of Section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the "Code"), to Crowe for his
benefit paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise in connection with, or arising out of, his
employment with ProAssurance or a Change of Control (as defined in Section
5.3(d) hereof) (a "Payment" or "Payments"), will be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
Crowe with respect to such excise tax (such excise tax, together with such
interest and penalties are collectively referred to as the "Excise Tax"), then
Crowe will be entitled to receive an additional payment (a "Gross Up Payment").
The amount of the Gross Up Payment will be such that after payment by Crowe of
all taxes (including any interest or penalties, other than interest and
penalties imposed by reason of Crowe's failure to file a timely tax return or
pay taxes shown due on his return, imposed with respect to such taxes and the
Excise Tax), including any Excise Tax imposed upon the Gross Up Payment, Crowe
retains an amount of the Gross Up Payment equal to the Excise Tax imposed upon
the Payments.
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(b) An initial determination as to whether a Gross Up Payment is required
pursuant to this Agreement and the amount of such Gross Up Payment shall be made
by the income tax accountants of ProAssurance. The tax accountants shall provide
their determination ("Determination") together with detailed supporting
calculations and documentation to ProAssurance and Crowe within a reasonable
time after the Date of Termination and if the tax accountants determine that no
Excise Tax is payable by Crowe with respect to a Payment or Payments, it shall
furnish Crowe with an opinion reasonably acceptable to Crowe that no Excise Tax
will be imposed with respect to any Payment or Payments. Within ten days of the
delivery of the Determination to Crowe, Crowe shall have the right to dispute
the Determination. The Gross Up Payment, if any, as determined pursuant to this
Section 6.3(b) shall be paid by ProAssurance to Crowe within 30 days of the
receipt of the Determination. The existence of the Dispute shall not in any way
affect Crowe's right to receive Gross Up Payments in accordance with the
Determination. Upon the final resolution of a Dispute, ProAssurance shall
promptly pay Crowe any additional amount required by such resolution. If there
is no Dispute, the Determination shall be binding, final and conclusive upon
ProAssurance and Crowe.
7. Non-Competition.
7.1 Non-Competition; Nonsolicitation of Employee. Crowe will not during the
Restricted Period (herein defined):
(a) become Employed by a Competitor Company that offers, sells or markets
medical professional liability insurance in the primary market area of the
Companies, except that Crowe may be employed with a Competitor Company so long
as and on the condition that Crowe does not participate in the medical
professional liability insurance business of the Competitor Company; or
(b) solicit or induce any employees of the Companies to leave such
employment or accept employment with any other person or entity, or solicit or
induce any insurance agent of the Companies to offer, sell or market medical
professional liability insurance for a competitor company in the primary market
area of the Companies;
"Companies" means any direct or indirect subsidiary of ProAssurance that,
now or in the future, offers medical professional liability insurance or
non-risk bearing products and services related to underwriting, claims or risk
management, or indemnification for medical professional liability, and any other
company that has succeeded to the business of any of the Companies.
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"Competitor Company" means an insurance company, insurance agency,
business, for profit or not for profit organization (other than the Companies)
that provides, or offers to provide medical professional liability insurance to
health care providers.
"Employed" includes activities as an owner, proprietor, employee, agent,
solicitor, partner, member, manager, principal, shareholder (owning more than 1%
of the outstanding stock), consultant, officer, director or independent
contractor.
"Health care providers" means physicians, dentists, podiatrists, physician
assistants, nurse practitioners, other individual health care providers and
hospital and other institutional health care providers.
"Medical professional liability insurance" means medical malpractice
insurance and reinsurance, and equivalent self-insured services such as
administration of self-insured trusts, claims management services and risk
management services for health care providers. "Medical professional liability
insurance" does not include services provided as an employee of a health care
provider if such services are rendered solely for the purpose of servicing
medical professional liability risk of the employer or that of its employees.
"Primary market area" means any state in which any one or more of the
Companies derived more than $15 million in revenues from the sale of medical
professional liability insurance and non-risk bearing medical professional
liability services or products to health care providers in the most recent
complete fiscal year prior to the Date of Termination.
"Restricted Period" means a period of 24 months from the Date of
Termination.
7.2 Remedies for Breach. If Crowe is deemed to have materially breached the
non-competition covenants set forth in Section 7.1 of this Agreement,
ProAssurance may, in addition to seeking an injunction or any other remedy they
may have, withhold or cancel any remaining payments of Severance Benefits due to
Crowe pursuant to Section 6.2 of this Agreement. ProAssurance shall give prior
or contemporaneous written notice of such withholding or cancellation of
payments in accordance with Section 6.2 hereof. If Crowe violates any of these
restrictions, the Companies shall be further entitled to an immediate
preliminary and permanent injunctive relief, without bond, in addition to any
other remedy which may be available to ProAssurance.
7.3 Reasonableness of Restrictions. ProAssurance and Crowe agree that the
restrictions in this Agreement are fair and reasonable in all respects,
including the geographic and temporal restrictions, and that the benefits
described in this Agreement, to the extent any separate or special consideration
is necessary, are fully sufficient consideration for Crowe's obligations under
this Agreement.
7.4 Confidentiality. Crowe will remain obligated under any confidentiality
or nondisclosure agreement with the Companies (or any of them) that is currently
in effect or to which Crowe may in the future be bound. In the event that Crowe
is at any time not the subject of a separate confidentiality or nondisclosure
agreement with the Companies (or any of them), Crowe expressly agrees that Crowe
shall not use for Crowe's personal benefit, or disclose, communicate or divulge
to, or use for the direct or indirect benefit of any person, firm, association
or company any confidential or competitive material or information of the
Companies or their subsidiaries, including without limitation, any information
regarding insureds or other customers, actual or prospective, and the contents
of their files; marketing, underwriting or financial plans or analyses which is
not a matter of public record; claims practices or analyses which are not
matters of public record; pending or past litigation in which the Companies have
been involved and which is not a matter of public record; and all other
strategic plans, analyses of operations, computer programs, personnel
information and other proprietary information with respect to the Companies
which are not matters of public record. Crowe shall return to the Companies
promptly, and in no event later than the Date of Termination, all items,
documents, lists and other materials belonging to the Companies or their
subsidiaries, including but not limited to, credit, debit or service cards, all
documents, computer tapes, or other business records or information, keys and
all other items in Crowe's possession or control.
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8. Indemnification. In addition to any indemnification required by law,
under the Certificate of Incorporation or Bylaws of ProAssurance or any of the
Companies (as defined in Section 6.1 hereof), or under a policy of insurance
owned by ProAssurance or the Companies, ProAssurance shall provide Crowe
indemnification under the terms and conditions of his current Indemnification
Agreement with ProAssurance.
9. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or commercial courier or
mailed by certified or registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses as set forth below or to such
other address as one party may have furnished to the other in writing in
accordance herewith.
Notice to Crowe:
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A. Derrill Crowe
[Privacy]
Birmingham, Alabama [Privacy]
Notice to the Companies:
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ProAssurance Corporation
Mailing Address:
P. O. Box 590009
Birmingham, Alabama 35259-0009
Street Address:
100 Brookwood Place
Birmingham, Alabama 35209
Attention: Corporate Secretary
10. Arbitration. ProAssurance and Crowe agree that final and binding
arbitration shall be the sole recourse to settle any claim or controversy
arising out of or relating to a breach or the interpretation of this Agreement,
except as either party may be seeking injunctive relief. Either party may file a
demand for arbitration. The arbitration shall be held at a mutually agreeable
location, and shall be subject to and in accordance with the Employment
Arbitration Rules of the American Arbitration Association then in effect;
provided that if the location cannot be agreed upon the arbitration shall be
held in Birmingham, Alabama. The arbitrator may award any and all remedies
allowable by the cause of action subject to the arbitration, but the
arbitrator's sole authority shall be to interpret and apply the provisions of
this Agreement. In reaching its decision the arbitrator shall have no authority
to change or modify any provision of this Agreement or other written agreement
between the parties. The arbitrator shall have the power to compel the
attendance of witnesses at the hearing. Any court having jurisdiction may enter
a judgment based upon such arbitration. All decisions of the arbitrator shall be
final and binding on the parties without appeal to any court. Upon execution of
this Agreement, Crowe shall be deemed to have waived any right to commence
litigation proceedings regarding this Agreement outside of arbitration or
injunctive relief without the express consent of ProAssurance. ProAssurance
shall pay all arbitration fees and the arbitrator's compensation. If Crowe
prevails in the arbitration proceeding, ProAssurance shall reimburse to Crowe
the reasonable fees and expenses of Crowe's personal counsel for his or her
professional services rendered to Crowe in connection with the enforcement of
this Agreement.
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11. Miscellaneous.
(a) Except insofar as this provision may be contrary to applicable law, no
sale, transfer, alienation, assignment, pledge, collateralization or attachment
of any benefits under this Agreement shall be valid or recognized by
ProAssurance.
(b) This Agreement sets forth the entire agreement between the parties with
respect to the matters set forth herein. This Agreement may not be modified or
amended except by written agreement intended as such and signed by all parties.
(c) This Agreement shall benefit and be binding upon the parties and their
respective directors, officers, employees, representatives, agents, heirs,
successors, assigns, devisees, and legal or personal representatives.
(d) ProAssurance, from time to time, shall provide government agencies with
such reports concerning this Agreement and copies thereof as may be required by
law, and shall provide Crowe with such disclosure concerning this Agreement as
may be required by law or as ProAssurance may deem appropriate.
(e) Crowe and ProAssurance respectively acknowledge that each of them has
read and understand this Agreement, that they have each had adequate time to
consider this Agreement and discuss it with each of their attorneys and
advisors, that each of them understands the consequences of entering into this
Agreement, that each of them is knowingly and voluntarily entering into this
Agreement, and that they are each competent to enter into this Agreement.
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(f) If any provision of this Agreement is determined to be unenforceable,
at the discretion of ProAssurance the remainder of this Agreement shall not be
affected but each remaining provision shall continue to be valid and effective
and shall be modified so that it is enforceable to the fullest extent permitted
by law.
(g) This Agreement will be interpreted as a whole according to its fair
terms. It will not be construed strictly for or against either party.
(h) Except to the extent that federal law controls, this Agreement is to be
construed according to Delaware law.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
November 5, 2007 to be effective as of the Commencement Date
CROWE:
/s/ A. Derrill Crowe
--------------------
A. Derrill Crowe
PROASSURANCE CORPORATION
By: /s/ Victor T. Adamo
-------------------
Victor T. Adamo, President
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EXHIBIT A
---------
RELEASE IN CONJUNCTION WITH SEVERANCE COMPENSATION
--------------------------------------------------
This Release of Claims ("Release") is between ProAssurance Corporation
("ProAssurance"), and any successor company that has assumed the Agreement to
which this Release was an attachment (all such organizations being referred to
in this Release as the "Companies") and A. Derrill Crowe ("Crowe").
The Companies and Crowe have agreed to terminate their employment
relationship. To effect an orderly termination, Crowe, and the Companies are
entering into this Release.
1. For the purposes of this Release, "Date of Termination" is the effective
date of Crowe's termination of employment from Companies. Crowe hereby waives
any and all rights Crowe may otherwise have to continued employment with or
re-employment by the Companies or any parent, subsidiary or affiliate of
Companies.
2. Effective with the Date of Termination, Crowe is relieved of all duties
and obligations to the Companies, except as provided in this Release or any
applicable provisions of the Employment Agreement between Companies and Crowe,
effective as of July 1, 2007 ("Agreement"), which survive termination of the
employment relationship.
3. Crowe agrees that this Release and its terms are confidential and shall
not be disclosed or published directly or indirectly to third persons, except as
necessary to enforce its terms, by Crowe or to Crowe's immediate family upon
their agreement not to disclose the fact or terms of this Release, or to Crowe's
attorney, financial consultant or accountant, except that Crowe may disclose, as
necessary, the fact that Crowe has terminated Crowe's employment with the
Companies.
4. Any fringe benefits that Crowe has received or currently is receiving
from the Companies or its affiliates shall cease effective with the Date of
Termination, except as otherwise provided for in this Release, in the Agreement
or by law.
5. The parties agree that the terms contained and payments provided for in
the Agreement are compensation for and in full consideration of Employee's
release of claims under this Release, and Crowe's confidentiality, non-compete,
non-solicitation and non-disclosure agreements contained in the Agreement.
6. Crowe shall be under no duty or obligation to seek or accept other
employment and shall not be required to mitigate the amount of the Severance
Benefits (as defined and provided under the Agreement) by seeking employment or
otherwise, provided, however, that Crowe shall be required to notify the
Companies if Crowe becomes covered by a health or dental care program providing
substantially similar coverage, at which time health or dental care continuation
coverage provided under the Agreement shall cease.
7. Crowe waives, releases, and forever discharges the Companies and each of
their direct or indirect parents, subsidiaries, affiliates, and any
partnerships, joint ventures or other entities involving or related to any of
the Companies, their parents, subsidiaries or affiliates, and all present or
former employees, officers, agents, directors, successors, assigns and attorneys
of any of these corporations, persons or entities (all collectively referred to
in this Release as the "Released") from any and all claims, charges, suits,
causes of action, demands, expenses and compensation whatsoever, known or
unknown, direct or indirect, on account of or growing out of Crowe's employment
with and termination from the Companies, or relationship or termination of such
relationship with any of the Released, or arising out of related events
occurring through the date on which this Release is executed. This includes, but
is not limited to, claims for breach of any employment contract; handbook or
manual; any express or implied contract; any tort; continued employment; loss of
wages or benefits; attorney fees; employment discrimination arising under any
federal, state, or local civil rights or anti-discrimination statute, including
specifically any claims Crowe may have under the federal Age Discrimination in
Employment Act, as amended, 29 USC ss.ss. 621, et seq.; emotional distress;
harassment; defamation; slander; and all other types of claims or causes of
action whatsoever arising under any other state or federal statute or common law
of the United States.
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8. Crowe does not waive or release any rights or claims that may arise
under the federal Age Discrimination in Employment Act, as amended, after the
date on which this Release is executed by Crowe.
9. Crowe acknowledges and agrees that Crowe has been advised in writing by
this Release, and otherwise, to CONSULT WITH AN ATTORNEY before Crowe executes
this Release.
10. Crowe agrees that Crowe received a copy of this Release prior to
executing the Agreement, that this Release incorporates the Companies' FINAL
OFFER; that Crowe has been given a period of at least twenty-two (22) calendar
days within which to consider this Release and its terms and to consult with an
attorney should Crowe so elect.
11. Crowe shall have seven (7) calendar days following Crowe's execution of
this Release to revoke this Release. Any revocation of this Release shall be
made in writing by Crowe and shall be received on or before the time of close of
business on the seventh calendar day following the date of the Employee's
execution of this Release at ProAssurance's address at 100 Brookwood Place, P.
O. Box 590009, Birmingham, Alabama 35259-0009, Attention: Chairman, or such
other place as the Companies may notify Crowe in writing. This Release shall not
become effective or enforceable until the eighth (8th) calendar day following
Crowe's execution of this Release.
12. Crowe and the Companies acknowledge that they have read and understand
this Release, that they have had adequate time to consider this Release and
discuss it with their attorneys and advisors, that they understand the
consequences of entering into this Release, that they are knowingly and
voluntarily entering into this Release, and that they are competent to enter
into this Release.
13. This Release shall benefit and be binding upon the parties and their
respective directors, officers, employees, agents, heirs, successors, assigns,
devisees and legal or personal representatives.
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14. This Release, along with the attached Agreement, sets forth the entire
agreement between the parties at the time and date these documents are executed,
and fully supersedes any and all prior agreements or understandings between them
pertaining to the subject matter in this Release. This Release may not be
modified or amended except by a written agreement intended as such, and signed
by all parties.
15. Except to the extent that federal law controls, this Release is to be
construed according to the law of the state of Delaware.
16. If any provision of this Release is determined to be unenforceable, at
the discretion of ProAssurance the remainder of this Release shall not be
affected but each remaining provision or portion shall continue to be valid and
effective and shall be modified so that it is enforceable to the fullest extent
permitted by law.
17. To signify their agreement to the terms of this Release, the parties
have executed it on the date set forth opposite their signatures, or those of
their authorized agents, which follow.
CROWE
Dated:
------------------- -------------------------------------
A. Derrill Crowe
PROASSURANCE CORPORATION
Dated: By:
------------------- ----------------------------------
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