Exhibit 10.7
EMPLOYMENT AGREEMENT
AGREEMENT,
made and entered into as of this 29th day of May, 2008, by and
between, Security Capital Assurance Ltd, a Bermuda corporation (the
“ Company ”), and David P. Shea (the “
Executive ”) to amend and restate an agreement between
the parties dated as of January, 23, 2007 (the “ Prior
Agreement ”).
WHEREAS,
the Executive had been employed by XL Capital Ltd as an Executive
Vice President, Chief Financial Officer of the Financial Products
& Services operations, which has included the business of the
Company;
WHEREAS,
the Executive and the Company desired that the Executive cease to
be an employee of XL Capital Ltd and become the Chief Financial
Officer of the Company on the terms and subject to the conditions
set forth herein, effective upon the consummation of the initial
public offering of the common stock of the Company (the “
IPO ”);
WHEREAS,
the Executive and the Company now wish to amend the Prior Agreement
to bring it into compliance with the requirements of Section 409A
of the Internal Revenue Code and the treasury regulations and other
official guidance promulgated thereunder;
NOW,
THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the
Company, and the Executive (the “ Parties ”)
agree as follows:
1.
EMPLOYMENT .
The
Company hereby employs the Executive, and the Executive hereby
accepts employment with the Company, for the term of this Agreement
as set forth in Section 2, below, in the position and with duties
and responsibilities set forth in Section 3, below, and upon such
other terms and conditions as are hereinafter stated.
2.
TERM OF EMPLOYMENT .
The
stated term of employment under this Agreement commenced on August
2, 2006 (the “ Date of the Agreement ”) and
shall continue through the close of business on the third
anniversary of the Date of the Agreement, subject to earlier
termination as provided in Section 8, below, and extension as
provided in the next succeeding sentence. On the third anniversary
of the Date of the Agreement and on each anniversary thereafter,
the stated term of employment shall be automatically extended for
an additional one year unless the Company gives notice in writing
to the Executive or the Executive gives notice
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in writing to the Company at
least three months prior to such anniversary that the term is not
to be so extended.
3.
POSITIONS, DUTIES AND RESPONSIBILITIES .
(a)
General . The Executive shall be employed as Chief Financial
Officer of the Company. In such position, the Executive shall have
the duties, responsibilities and authority normally associated with
the office, position and titles of such an officer of a financial
guaranty company, or holding company, whose shares are publicly
traded in the United States. In carrying out his duties and
responsibilities, the Executive shall report to the Chief Executive
Officer of the Company. During the term of this Agreement, the
Executive shall devote his full business time to the business and
affairs of the Company and its subsidiaries, and shall use his best
efforts, skills and abilities to promote the interests of the
Company and its subsidiaries.
(b)
Performance of Services . The Executive’s services
under this Agreement, which are global in nature, shall be
performed either in the greater New York City metropolitan area, as
reasonably requested by the Company, in accordance with the
guidelines established by the Company from time to time for the
location of the performance of services on behalf of the Company
and its subsidiaries. The Executive acknowledges that the Company
may require the Executive to travel to the extent such travel is
reasonably necessary to perform the services hereunder and that
such travel may be extensive. To the extent reasonably requested by
the Company, the Executive shall allocate greater business time to
a location other than his principal business location, if
necessary.
4.
BASE SALARY .
The
Executive shall be paid a Base Salary by the Company not less than
US$385,000.00, payable in accordance with the Company’s
regular pay practices. Such Base Salary shall be subject to annual
review in accordance with the Company’s practices for
executives as in effect from time to time and may be increased at
the discretion of the Compensation Committee of the Board of
Directors of the Company (the “ Compensation Committee
”).
5.
BONUSES .
In
addition to the Base Salary provided for in Section 4, above, the
Executive shall be eligible for an annual cash bonus under the
Company’s Annual Incentive Compensation Plan as in effect
from time to time, with an annual target bonus equal to 150% of the
Executive’s Base Salary. The Executive may be awarded such
annual bonuses thereunder as may be approved by the Compensation
Committee based on corporate, individual and business unit
performance measures, as appropriate, established or approved from
time to time, by the Compensation Committee. Any annual bonus
shall
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be paid in cash in a lump sum no
later than March 15 following the year for which the annual bonus
is paid, unless deferred at the Executive’s option in
accordance with the provisions of any applicable deferred
compensation plan of the Company or it subsidiaries in effect from
time to time. Nothing in this Section 5 shall confer upon the
Executive any right to a minimum annual bonus.
6.
EMPLOYEE BENEFIT PROGRAMS .
During
the term of the Executive’s employment under this Agreement,
the Executive shall be entitled to participate in all employee
retirement, pension, welfare and benefit programs of the Company as
are in effect from time to time and in which similarly situated
senior executives of the Company are eligible to
participate.
7.
BUSINESS EXPENSE REIMBURSEMENT AND FRINGE BENEFITS
.
During
the term of the Executive’s employment under this Agreement,
the Executive shall be entitled to participate in the
Company’s travel and entertainment expense reimbursement
programs and its executive fringe benefit plans and arrangements,
all in accordance with the terms and conditions of such programs,
plans and arrangements as in effect from time to time as applied to
the Company’s similarly situated executives.
8.
TERMINATION OF EMPLOYMENT .
(a)
Termination due to Death . In the event the Executive dies
during the term of employment hereunder, the Executive’s
spouse, if the spouse survives the Executive, (or, if the
Executive’s spouse does not survive him, the estate or other
legal representative of the Executive) shall be entitled to receive
the Base Salary as provided in Section 4, above, at the rate in
effect at the time of Executive’s death, to be paid in
accordance with the Company’s regular payroll practices (as
in effect at the time of death), through the end of the sixth month
after the month in which the Executive dies. In addition to the
above, the estate or other legal representative of the Executive
shall be entitled to:
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(i)
any annual bonus awarded in accordance with the Company’s
bonus program but not yet paid under Section 5, above, to be paid
at the time such bonus would otherwise be due under Section 5
above, and reimbursement of business expenses incurred prior to
death in accordance with Section 7 above,
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(ii)
within 45 days after the date of death, a pro rata bonus for the
year of death in an amount determined by the Compensation
Committee, but in no event less than a pro rata portion of the
Executive’s average annual bonus for the immediately
preceding three years (or the period of the Executive’s
employment with the Company, if less),
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(iii)
the rights under any options to purchase equity securities of the
Company or other rights with respect to equity securities of the
Company, including any restricted stock or other securities, held
by the Executive determined in accordance with the terms
thereof,
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(iv)
for a period of six months following the Executive’s death,
continued medical benefit plan coverage (including dental and
vision benefits if provided under the applicable plans) for the
Executive’s dependents, if any, under the Company’s
medical benefit plans upon substantially the same terms and
conditions (including cost of coverage to the dependents) as is
then in existence for other executives during the coverage period;
provided , that, if the Executive’s dependents cannot
continue to participate in the Company plans providing such
benefits, the Company shall otherwise provide such benefits on
substantially the same after-tax basis as if continued
participation had been permitted, and
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(v)
the vested accrued benefits, if any, under the employee benefit
programs of the Company, as provided in Section 6, above,
determined in accordance with the applicable terms and provisions
of such programs.
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(b)
Termination due to Disability . In the event the
Executive’s employment hereunder is terminated due to his
disability, as determined under the Company’s long-term
disability plan and within the meaning of Code Section 409A, the
Executive shall be entitled to the following amounts:
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(i)
a cash lump sum payment made, within sixty (60) days after the date
of termination in an amount equal to the Base Salary as provided in
Section 4, above, that would have been paid to the Executive had he
remained employed through the end of the sixth month after the
month in which the Executive’s employment terminates due to
disability,
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(ii)
any annual bonus awarded in accordance with the Company’s
bonus program but not yet paid under Section 5 above, to be paid at
the time such bonus would otherwise be due under Section 5 above
and reimbursement of business expenses incurred prior to
termination of employment in accordance with Section 7
above,
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(iii)
within 60 days after the date of termination, a pro rata bonus for
the year of termination in an amount determined by the Compensation
Committee, but in no event less than a pro rata portion of the
Executive’s average annual bonus for the immediately
preceding three years (or the period of the Executive’s
employment with the Company, if less),
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(iv)
the rights under any options to purchase equity securities of the
Company or other rights with respect to equity securities of the
Company,
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including any restricted stock or
other securities, held by the Executive, determined in accordance
with the terms thereof,
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(v)
for a period of six months following the termination of the
Executive’s employment, continued medical benefit plan
coverage (including dental and vision benefits if provided under
the applicable plans) for the Executive (and the Executive’s
dependents, if any) under the Company’s medical benefit plans
upon substantially the same terms and conditions (including cost of
coverage to the Executive) as is then in existence for other
executives during the coverage period; provided , that, if
the Executive cannot continue to participate in the Company plans
providing such benefits, the Company shall otherwise provide such
benefits on substantially the same after-tax basis as if continued
participation had been permitted; provided further ,
however , that, in the event the Executive becomes
re-employed with another employer and becomes eligible to receive
medical benefits from such employer, the medical benefits described
herein shall immediately cease, and
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(vi)
the vested accrued benefits, if any, under the employee benefit
programs of the Company, as provided in Section 6 above, determined
in accordance with the applicable terms and provisions of such
programs.
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(c)
TERMINATION FOR CAUSE .
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(i)
The employment of the Executive under this Agreement may be
terminated by the Company for Cause, such termination to be
effective upon the Company giving the Executive written notice of
termination in accordance with the provisions of this Agreement.
For this purpose, “ Cause ” shall
mean:
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(A)
conviction of the Executive of a felony involving moral turpitude,
dishonesty or laws to which the Company or its Affiliates are
subject in connection with the conduct of its or their
business;
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(B)
the Executive, in carrying out his duties for the Company under
this Agreement, has been guilty of ( 1 ) willful
misconduct or ( 2 ) substantial and continual refusal
by the Executive to perform the duties assigned to the Executive
pursuant to the terms hereof; provided , however ,
that any act or failure to act by the Executive shall not
constitute Cause for purposes of this Section 8(c)(i)(B) if such
act or failure to act was committed, or omitted, by the Executive
in good faith and in a manner he reasonably believed to be in the
overall best interests of the Company, as the case may be. The
determination of whether the Executive acted in good faith and that
he reasonably believed his action to be in the Company’s
overall best interest, as the case may be, will be in
the
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reasonable and good faith
judgment of the Compensation Committee and/or the Audit Committee;
or
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(C)
the Executive’s continued willful refusal to obey any lawful
policy or requirement duly adopted by the Company’s Board of
Directors and the continuance of such refusal after receipt of
written notice.
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(ii)
In the event of a termination for Cause under Section 8(c)(i),
above, the Executive shall be entitled only to:
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(A)
Base Salary as provided in Section 4, above, at the rate in effect
at the time of his termination of employment for Cause, through the
date on which termination for Cause occurs, to be paid in
accordance with the Company’s regular payroll
practices,
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(B)
the rights under any options to purchase equity securities of the
Company or other rights with respect to equity securities of the
Company, including any restricted stock or other securities, held
by the Executive, determined in accordance with the terms thereof,
and
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(C)
the vested accrued benefits, if any, under employee benefit
programs of the Company, as provided in Section 6, above, and
re-imbursement of properly incurred unreimbursed business expenses
under the business expense reimbursement program as described in
Section 7, above, determined in accordance with the applicable
terms and provisions of such employee benefit and expense
reimbursement programs; provided that the Executive shall
not be entitled to any such benefits unless the terms and
provisions of such programs expressly state that the Executive
shall be entitled thereto in the event his employment is terminated
for Cause (as defined in this Agreement or otherwise).
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(d)
TERMINATION WITHOUT CAUSE .
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(i)
Anything in this Agreement to the contrary notwithstanding, the
Executive’s employment may be terminated by the Company
without Cause as provided in this Section 8(d). A termination due
to death or disability, as described in Section 8(a) or (b), above,
or a termination for Cause, as described in Section 8(c), above,
shall not be deemed a termination without Cause under this Section
8(d). For the avoidance of doubt, if a notice of non-renewal of
this Agreement pursuant to Section 2 is issued by the Company and,
within three (3) months thereafter, a written notice is issued
( x ) by the Company to the Executive of its intention
to terminate the employment relationship with Executive at the end
of the Term or ( y ) by the Executive to the Company of
Executive’s intention to terminate the employment
relationship with the Company
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at the end of the Term, the
termination of the Executive’s employment at the end of the
Term shall be considered a termination by the Company without Cause
hereunder.
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(ii)
In the event the Executive’s employment is terminated by the
Company without Cause ( x ) prior to a Change in
Control or ( y ) following the Post-Change Period (as
hereinafter defined), the Executive shall be entitled
to:
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(A)
Base Salary as provided in Section 4, above, at the rate in effect
at the time of his termination of employment without Cause, through
the date on which termination without Cause occurs, to be paid in
accordance with the Company’s regular payroll
practices,
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(B)
provided the Executive executes on or before the date that is the
later of (x) 90 days following the date of his termination of
employment or (y) the last day of the Executive’s taxable
year in which the termination of employment occurs, a general
release of employment liability claims against the Company and its
affiliates in substantially the form of Exhibit C attached hereto,
and does not revoke such release prior to the end of the seven day
statutory revocation period, a cash lump sum payment made within 60
days after such statutory revocation period equal to ( x
) two times the Executive’s annual Base Salary, at the
annual rate in effect in accordance with Section 4, above,
immediately prior to such termination and ( y ) one
times the higher of the targeted annual bonus for the year of such
termination, if any, or the average of the Executive’s annual
bonus payable by the Company or its subsidiaries for the three
years immediately preceding the year of termination (or such
shorter period during which the Executive has been employed by any
of such entities),
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(C)
any annual bonus awarded in accordance with the Company’s
bonus program but not yet paid under Section 5 above, to be paid at
the time such bonus would otherwise be due under Section 5 above
and reimbursement of business expenses incurred prior to
termination of employment in accordance with Section 7
above,
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(D)
the rights under any options to purchase equity securities of the
Company or other rights with respect to equity securities of the
Company, including any restricted stock or other securities or
other long-term cash incentives, held by the Executive, determined
in accordance with the terms thereof,
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(E)
for a period of twenty-four months following the termination of the
Executive’s employment, continued medical benefit
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plan coverage (including dental
and vision benefits if provided under the applicable plans) for the
Executive (and the Executive’s dependents, if any) under the
Company’s medical benefit plans upon substantially the same
terms and conditions (including cost of coverage to the Executive)
as is then in existence for other executives during the coverage
period; provided , that, if the Executive cannot continue to
participate in the Company plans providing such benefits, the
Company shall otherwise provide such benefits on substantially the
same after-tax basis as if continued participation had been
permitted; provided , however , that, in the event
the Executive becomes reemployed with another employer and becomes
eligible to receive medical benefits from such employer, the
medical benefits described herein shall immediately cease,
and
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(F)
the vested accrued benefits, if any, under the employee benefit
programs of the Company, as provided in Section 6 above, determined
in accordance with the applicable terms and provisions of such
programs.
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(iii)
In the event the Executive’s employment is terminated by (
x ) the Company without Cause within the twenty-four
month period following a Change in Control (as defined in
Exhibit A hereto) (the “ Post-Change Period
”) or ( y ) the Executive terminates his
employment for “ Good Reason ” (as defined in
Exhibit B hereto) during the Post-Change Period, the
Executive shall be entitled to the following, paid in the case of
amounts set forth in (A), (B), (C), (D) and where applicable, (G)
below within 60 days after termination of employment:
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(A)
Base Salary as provided in Section 4, above, at the rate in effect
at the time of his termination of employment, through the date on
which termination occurs,
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(B)
a cash lump sum payment equal to two times the Executive’s
annual Base Salary, at the rate in effect in accordance with
Section 4, above, or immediately prior to such termination or
Change in Control, whichever is greater,
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(C)
a cash lump sum payment equal to two times the higher of ( i
) the average annual bonus awarded to the Executive by the
Company or its subsidiaries in the three years prior to the year in
which the Change in Control occurs (or shorter period during which
the Executive had been employed by any of such entities), or (
ii ) the Executive’s target annual bonus, if any,
for the year of such termination,
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(D)
a cash lump sum equal to ( i ) the higher of ( x
) the bonus actually awarded to the Executive by the Company
for the year
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immediately preceding the year in
which the Change in Control occurs or ( y ) the
targeted amount of bonus, if any, that would have been awarded to
the Executive in respect of the year in which the termination of
employment occurs, multiplied by ( ii ) a fraction, the
numerator of which is the number of months or fraction thereof in
which the Executive was employed by the Company in the year of
termination of employment, and the denominator of which is
12,
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(E)
options to purchase equity securities of the Company or other
rights with respect to equity securities of the Company held by the
Executive shall immediately vest in full and shall continue to be
exercisable for three years from the date of termination of
employment, notwithstanding the Executive’s termination of
employment, or the original full term of the option or other right,
if shorter,
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(F)
for a period of twenty-four months following the termination of the
Executive’s employment, continued medical benefit plan
coverage (including dental and vision benefits if provided under
the applicable plans) for the Executive (and the Executive’s
dependents, if any) under the Company’s medical benefit plans
upon substantially the same terms and conditions (including cost of
coverage to the Executive) as is then in existence for other
executives during the coverage period; provided , that, if
the Executive cannot continue to participate in the Company plans
providing such benefits, the Company shall otherwise provide such
benefits on substantially the same after-tax basis as if continued
participation had been permitted; provided , however
, that, in the event the Executive becomes reemployed with another
employer and becomes eligible to receive medical benefits from such
employer, the medical benefits described herein shall immediately
cease, and
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(G)
full and immediate vesting as of the date of termination under the
Company’s retirement plans that are not qualified under Code
Section 401(a), and, with regard to those retirement plans that are
qualified under Code Section 401(a) (other than those where any
unvested benefit is paid through a plan that is not subject to Code
Section 401(a), an economically equivalent benefit as if the
unvested benefit under any plan qualified under Code Section 401(a)
fully and immediately vested shall be paid in a cash lump sum to
the Executive within 60 days after termination of
employment.
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Anything
in this Agreement to the contrary notwithstanding, the Executive
shall be entitled to the benefits described in (A)-(G) above,
subject to the proviso below, if the Executive’s employment
with the Company is terminated by the Company (other than for
Cause) within one year prior to the date on which a Change in
Control occurs, and it is
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reasonably demonstrated that such
termination ( i ) was at the request of a third party
who has taken steps reasonably calculated or intended to effect the
Change in Control or ( ii ) otherwise arose in
connection with or anticipation of the Change in Control;
provided , however , that in such event, ( x )
the Executive shall be entitled to the benefits and payments
provided under Section 8(d)(ii) in the form and at the times
provided there under, and ( y ) the Executive shall also be
entitled to the benefits and payments provided under Section
8(d)(iii) in the form and at the times provided under Section
8(d)(iii) payable on a Change in Control, but solely to the extent
that the benefits and payments under Section 8(d)(iii) exceed the
benefits and payments under Section 8(d)(ii).
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(iv)
If, in situations where Section 8(d)(iii) does not apply, at any
time during the term of the Executive’s employment hereunder,
( x ) duties are assigned to the Executive that
constitute a material diminution in his duties as described under
Section 3 hereof, or ( y ) the Company does not cure
any other material breach by it of any provision of Sections 3
through 7, 14 and 17 of this Agreement within 30 calendar days
following written notice of same by the Executive (which written
notice must be given within 30 calendar days after such breach),
the Executive shall have the right to terminate his employment
within 30 calendar days of the Company’s failure to rescind
such assignment or of such failure to cure a breach, as the case
may be, in both cases in accordance with the proviso below and such
termination shall be deemed a termination by the Company without
Cause under Section 8(d)(ii), above, provided , in the event
of ( x ) or ( y ) above, the Executive shall have
given the Company written notice of his decision within 30 calendar
days of such occurrence and shall not, within 30 calendar days
thereafter, have had the assignment of such duties rescinded or the
material breach cured.
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(e)
VOLUNTARY TERMINATION BY THE EXECUTIVE . The Executive may
voluntarily terminate his employment prior to the expiration of the
term of this Agreement upon at least 30 days prior written notice
to the Company (or if the Board deems a longer period necessary to
effect an orderly transition, the Board may, by prompt written
notice to the Executive, extend the termination date up to an
additional 60 days, but in no event beyond the date falling 90 days
after the date on which the Executive gave his notice of
termination) ,provided such termination shall constitute a
voluntary termination and, except as provided in Section 8(d)(iii)
or Section 8(d)(iv), above, in such event the Executive shall be
limited to the same rights and benefits as applicable to a
termination by the Company for Cause as provided in Section 8(c),
above. A voluntary termination in accordance with this Section 8(e)
shall not be deemed a breach of this Agreement. A termination of
the Executive’s employment due to disability or death as
described in Section 8(b) or 8(a), above, a termination by the
Executive which the Executive is entitled to treat as a termination
by the Company pursuant to Section 8(d), above, or a termination by
the Executive under Section 8(d)(iv), above, shall not be deemed a
voluntary termination within the meaning of this Section 8(e). For
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avoidance of doubt, a notice of
non-renewal of the Agreement pursuant to Section 2 above issued by
the Executive shall not be considered a voluntary termination
within the meaning of this Section 8(e).
9.
EXCISE TAX PAYMENTS .
(a)
Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that ( i ) any payment or
distribution made, or benefit provided (including, without
limitation, the acceleration of any payment, distribution or
benefit or accelerated vesting or exercisability of any award) by
the Company 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 9) (a “
Payment ”) would be subject to the excise tax imposed
by Section 4999 of the Code (or any successor provision or similar
excise tax), 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 ”),
( ii ) the aggregate amount of the Executive’s
Parachute Payments (as defined in Section 280G(b)(2)(A) of the
Code) is less than 3.25 times the Executive’s Base Amount (as
defined in Section 280G(b)(3)(A) of the Code), and ( iii
) no such Payment would be subject to the Excise Tax if the
payments set forth in Section 8(d)(iii)(B) and (C) hereof were
each reduced by up to 20 percent, then the payments set forth in
Section 8(d)(iii)(B) and (C) will each be reduced to the
smallest extent possible (and in no event by more than 20 percent
in the aggregate) such that no Payment is subject to the Excise
Tax.
(b)
Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that ( i ) the aggregate
amount of the Executive’s Parachute Payments equals or
exceeds 3.25 times the Executive’s Base Amount, ( ii
) the aggregate amount of the Executive’s Parachute
Payments is less than 3.25 times the Base Amount but one or more
Payments would be subject to the Excise Tax even if the payments
set forth in Section 8(d)(iii)(B) and (C) hereof were each
reduced by 20 percent, or ( iii ) notwithstanding a
reduction in payments pursuant to Section 9(a) above, an Excise Tax
is payable by the Executive on one or more Payments, then, in any
such case, Payments shall not be reduced and 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 income or Excise Tax) imposed
upon the Gross-Up Payment and any interest or penalties imposed
with respect to such taxes, the Executive retains from the Gross-Up
Payment an amount equal to the Excise Tax imposed upon the
Payments.
(c)
Subject to the provisions of Section 9(d), all determinations
required to be made under this Section 9, including determination
of whether a Gross-Up Payment is required and of the amount of any
such Gross-Up Payment, shall be made by a nationally recognized
public accounting firm selected by the Company (the “
Accounting Firm ”)
11
which shall provide detailed
supporting calculations both to the Company and the Executive
within 15 business days of the date of termination of the
Executive’s employment, if applicable, or such earlier time
as is reasonably requested. The initial Gross-Up Payment, if any,
as determined pursuant to this Section 9(c), shall be paid to the
Executive within five business days of the receipt of the
Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall
furnish the Executive with a written opinion that he has
substantial authority not to report any Excise Tax on his Federal
income tax return. Any determination by the Accounting Firm meeting
the requirements of this Section 9(c) shall be binding upon the
Company and the Executive, subject only to payments pursuant to the
following sentence based on a determination that additional
Gross-Up Payments should have been made, consistent with the
calculations required to be made hereunder (the amount of such
additional payments are referred to herein as the “
Gross-Up Underpayment ”). In the event that the
Company exhausts its remedies pursuant to Section 9(d) and the
Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Gross-Up
Underpayment that has occurred and any such Gross-Up Underpayment
shall be promptly paid by the Company to or for the benefit of the
Executive. The fees and disbursements of the Accounting Firm shall
be paid by the Company.
(d)
The Executive shall notify the Company in writing of any claim by
the United States Internal Revenue Service that, if successful,
would require the payment by the Executive of any Excise Tax and,
therefore, the payment by the Company of a Gross-Up Payment. Such
notification shall be given as soon as practicable but not later
than 30 business days after the Executive receives written notice
of such claim
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