This Agreement is entered into as of the 7th day
of April 2008 and made effective May 1, 2008 (the
“Effective Date”) by and between NYMAGIC, INC., a New
York corporation (together with its successors and assigns, the
“Company”), and Glenn R. Yanoff (the
“Executive”).
WHEREAS, the Company desires to employ the
Executive pursuant to an agreement embodying the terms of such
employment (this “Agreement”) and the Executive desires
to enter into this Agreement and to accept such employment, subject
to the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises
and mutual covenants contained herein and for other good and
valuable consideration, the receipt of which is mutually
acknowledged, the Company and the Executive (individually a
“Party” and together the “Parties”) agree
as follows:
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A.
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(a) The term of the
Executive’s employment under this Agreement shall commence on
the Effective Date and end on December 31, 2010 (the
“Original Term of Employment”), unless terminated
earlier in accordance herewith. The Original Term of Employment
shall be automatically renewed for a one-year term (the
“Renewal Term”), provided that MMO Agencies, Inc.
produces Gross Written Premiums of $40,000,000 in 2010. Thereafter,
this Agreement may be extended with the consent of the Company and
the Executive. “Term of Employment” shall mean the
Original Term of Employment and all Renewal Terms.
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(b) For
purposes of this Agreement, “Gross Written Premiums”
shall mean all premiums written by MMO Agencies, Inc., less returns
and cancellations.
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2.
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Position, Duties and
Responsibilities .
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(a) Generally . The Executive shall
serve as President of MMO Agencies, Inc., a wholly owned subsidiary
of the Company, and for so long as he is an employee of the Company
the Executive agrees to serve as a member of the board of directors
of such subsidiaries of the Company as the Company shall request.
The Executive shall perform such duties and responsibilities as are
assigned to him from time to time by the Company’s President
and Chief Executive Officer, to whom he shall report, it being
understood and agreed that the Executive’s primary role will
be to develop MMO Agencies, Inc. as an underwriting department of
the Company dedicated to producing business through the appointment
of agents to represent
the Company,
with such agents having the authority to bind, and issue insurance
on behalf of, the Company. In furtherance of such role, the
Executive shall devote substantially all of his business time and
attention (except for periods of vacation or absence due to
illness), and his best efforts, abilities, experience, and talent
to the position of President of MMO Agencies, Inc. In the event of
termination of the Executive’s employment under this
Agreement, the Executive’s membership on any of the boards of
directors of any of the Company’s subsidiaries and any
committees thereof shall also be terminated effective on the date
of termination of the Executive’s employment.
(b) Place of Employment . The
Executive’s principal place of employment shall be Del Ray
Beach, Florida.
(c) In addition to his position as
President of MMO Agencies, Inc., the Executive shall be elected to
the position of Executive Vice President of the Company.
The Executive shall be paid an annualized
salary, payable in accordance with the regular payroll practices of
the Company, of not less than $400,000 per year (“Base
Salary”), which amount, $1,200,000 in the aggregate, shall be
guaranteed through April 30, 2011, it being understood that in
the event that this Agreement is not renewed by the Company for the
2011 year, the Company will nonetheless pay the Executive
through April 30, 2011. The Company further acknowledges that
the Executive is accepting this position in reliance upon the
Company guaranteeing the aforesaid Base Salary in the aggregate and
the Annual Incentive Awards contemplated in
Section 4(b).
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4.
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Annual Incentive Awards
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(a) The Executive shall participate in the
Company’s annual incentive compensation plan with a bonus
range in the amount of $0 to $300,000, and a target of $150,000
based on MMO Agencies, Inc. producing the amount of Gross Written
Premiums indicated for the year identified:
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Gross Written Premiums
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Year
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$10,000,000
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2008
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$25,000,000
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2009
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$40,000,000
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2010
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$60,000,000
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2011
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(b) Notwithstanding the provisions of
Section 4(a), the Executive shall be guaranteed an Annual
Incentive Award of $150,000 in 2008; $100,000 in 2009; and, $75,000
in 2010; provided, however, that the guaranteed Annual Incentive
Award for 2008 shall be reduced pro rata if the launch of MMO
Agencies, Inc. is delayed beyond May 1, 2008. Payment of the
Executive’s Annual Incentive Award shall be made within three
(3) months of the Company’s fiscal year-end.
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5.
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Long-Term Incentive Plan
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Contemporaneously with the execution of this
Agreement the Company and the Executive will also enter into an
Award Agreement under the NYMAGIC, INC. Amended and Restated 2004
Long-Term Incentive Plan (the “LTIP”), which shall
provide the Executive with the following grants of Restricted Share
Units and Performance Units under the LTIP:
(a) Grant of Restricted Shares . On
the Effective date the Executive shall be granted as a signing
bonus 2,500 Restricted Share Units, which shall be awarded in
accordance with the terms of the Company’s Equity
Compensation Awards Policy, and which shall vest on March 1,
2009, contingent upon the Executive’s continued employment
with the Company on that date; and,
(b) Grant of Performance Compensation
Units. On the Effective Date the Executive shall be granted a
Performance Compensation Award in the amount of 200 Performance
Units for each $1 million of Gross Written Premiums produced
by MMO Agencies, Inc. in each of 2008, 2009, 2010 and, if
applicable, 2011, which Performance Compensation Award shall be
subject to the achievement of certain performance criteria set
forth in the Performance Compensation Award Agreement and the terms
of the LTIP (the “Performance Compensation
Award”).
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6.
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Employee Benefit Programs
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(a) General Benefits . During the
Term of Employment the Executive shall be entitled to participate
in such employee benefit plans and programs of the Company as are
made available to the Company’s senior level executives or to
its employees generally, as such plans or programs may be in effect
from time to time, including, without limitation, health, medical,
dental, long-term disability, profit sharing and travel accident
and life insurance plans.
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7.
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Reimbursement of Business and Other
Expenses: Perquisites .
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(a) The Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities
under this Agreement, and the Company shall promptly reimburse him
on a monthly basis for all such business expenses incurred in
connection therewith in the prior month, subject to documentation
in accordance with the Company’s policy.
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8.
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Termination of Employment
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(a) Termination Due to Death or
Disability . The Term of Employment shall be terminated
immediately upon the death or disability (as such term is defined
under the Company’s Long-Term Disability Plan) of the
Executive. In the event the Executive’s employment with the
Company is terminated due to his death or disability, the
Executive, his estate or his beneficiaries, as the case may be,
shall be entitled to and their sole remedies under this Agreement
shall be:
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(i)
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Base Salary through the date of
death or the commencement date of his eligibility for the
Company’s long-term disability benefits (the
“Commencement Date”) as the case may be, which shall be
paid in a single lump sum 15 days following the
Executive’s death or the Commencement Date, as the case may
be;
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(ii)
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pro
rata guaranteed Annual Incentive Award for the year in which the
Executive’s death, or the Commencement Date, as the case may
be, occurs, which shall be payable in a lump sum 30 days after
his death or on the first day following the six-month anniversary
of the Executive’s termination of employment by reason of
disability;
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(iii)
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elimination of all restrictions on
any Restricted Share Unit Grants outstanding at the time of his
death, or the Commencement Date, as the case may be;
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(iv)
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immediate vesting of all outstanding
stock options and the right to exercise such stock options as is
provided in any stock option award agreement to which the Executive
is a party;
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(v)
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immediate vesting of all outstanding
Performance Compensation Awards for which target performance has
been achieved through the date of death or the Commencement Date,
as the case may be, payable in a lump sum in cash or stock
30 days after his death or on the first day following the
six-month anniversary of the Executive’s termination of
employment by reason of disability, as the case may be;
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(vi)
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the
balance of any Annual Incentive Awards earned as of
December 31 of the prior year (but not yet paid), which shall
be paid in a single lump sum and in accordance with the terms of
such awards;
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(vii)
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a
Performance Compensation Award for the year in which the Executive
dies or becomes disabled, based upon the pro rata production of
Gross Written Premiums by MMO Agencies, Inc. from January 1 of such
year through the date of the Executive’s death, or the
Commencement Date, and otherwise subject to the terms of the
Performance Compensation Award;
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(viii)
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settlement of all deferred
compensation arrangements in accordance with the Executive’s
duly executed Deferral Election Forms; and
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(ix)
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other or additional benefits then
due or earned, payable in accordance with applicable plans and
programs of the Company.
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(b)
Termination by the Company for Cause .
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(i)
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The
Term of Employment may be terminated by the Company for Cause.
“Cause” shall mean:
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(A)
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The
Executive’s willful and material breach of Sections 9,
10 or 11;
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(B)
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The
Executive is convicted of a felony or pleads guilty or nolo
contendre to an offense that is a felony in the jurisdiction where
committed;
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(C)
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The
Executive engages in conduct that constitutes willful gross neglect
or willful gross misconduct in carrying out his duties under this
Agreement, resulting, in either case, in material harm to the
financial condition or reputation of the Company;
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(D)
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The
Executive’s failure to cooperate, if requested by the
Company’s Board of Directors (the “Board”), with
any investigation or inquiry into his or the Company’s
business practices, whether internal or external, including, but
not limited to the Executive’s refusal to be deposed or to
provide testimony at any trial or inquiry;
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(E)
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The
Executive’s substantial and continued refusal to perform his
duties; and,
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(F)
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The
Executive’s violation of a material Company
Policy.
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For purposes of
this Agreement, an act or failure to act on the Executive’s
part shall be considered “willful” if it was done or
omitted to be done by him not in good faith, and shall not include
any act or failure to act resulting from any incapacity of the
Executive.
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(ii)
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A
termination for Cause shall not take effect unless the provisions
of this subsection (ii) are complied with. The Executive shall
be given written notice by the Company of its intention to
terminate him for Cause, such notice (A) to state in detail
the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause
is based and (B) to be given within thirty (30) days of
the
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Company’s learning of such act
or acts or failure or failures to act. The Executive shall have
20 days after the date that such written notice has been given
to him in which to cure such conduct, to the extent such cure is
possible. If he fails to cure such conduct, the Executive shall
then be entitled to a hearing before the Board at which the
Executive is entitled to appear. Such hearing shall be held within
25 days of such notice to the Executive, provided he requests
such hearing within 10 days of the written notice from the
Company of the intention to terminate him for Cause. If, within
five days following such hearing, the Executive is furnished
written notice by the Board confirming that, in its judgment,
grounds for Cause on the basis of the original notice exist, he
shall thereupon be terminated for Cause.
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(iii)
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In
the event the Company terminates the Executive’s employment
for Cause, he shall be entitled to and his sole remedies under this
Agreement shall be:
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(A)
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Base Salary through the date of the
termination of his employment for Cause, which shall be paid in a
single lump sum 15 days following the Executive’s
termination of employment;
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(B)
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any
Annual Incentive Awards earned as of December 31 of the prior
year (but not yet paid), which shall be paid in a single lump and
in accordance with the terms of such awards; and
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(C)
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other or additional benefits then
due or earned, payable in accordance with applicable plans or
programs of the Company.
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(c) Termination Without Cause . In
the event the Executive’s employment with the Company is
terminated without Cause (which termination shall be effective as
of the date specified by the Company in a written notice to the
Executive), other than due to death or disability, the Executive
shall be entitled to and his sole remedies under this Agreement
shall be:
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(i)
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Base Salary through the date of
termination of the Executive’s employment, which shall be
paid in a single lump sum 15 days following the Executive’s
termination of employment;
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(ii)
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Unpaid Base Salary, which for the
avoidance of doubt was $1,200,00 upon the Effective Date, and
Annual Incentive Awards guaranteed in accordance with
Sections 3 and 4, respectively;
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(iii)
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elimination of all restrictions on
any Restricted Share Unit Grants outstanding at the time of
termination of employment;
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(iv)
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immediate
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