Confidential
treatment has been requested for portions of this document. This
copy of the document filed as an exhibit omits the confidential
information subject to the confidential treatment request.
Omissions are designated by three asterisks (***). A complete
version of this document is being filed with the Securities and
Exchange Commission.
EMPLOYMENT AND NONCOMPETE
AGREEMENT
This EMPLOYMENT
AND NONCOMPETE AGREEMENT (this “ Agreement
”), made and entered into as of the 22nd day of May, 2003, is
by and between SAMUEL H. FLEET , an individual resident of
Rhode Island (“ Executive ”), and National
Employee Benefit Companies, Inc. (the “ Company
”), a Rhode Island corporation. For purposes of this
Agreement “ Affiliates ” includes American
Wholesale Insurance Holding Company LLC and American Wholesale
Insurance Group, Inc., the owner of all the outstanding shares of
capital stock of the Company (“ Parent
”).
IN
CONSIDERATION of the promises and the mutual covenants
contained herein, the parties hereto agree as follows:
1.
Employment . Subject to the terms and conditions
stated herein, and in consideration of Executive’s
obligations and covenants, including without limitation, those
obligations and covenants set forth in Sections 6, 7
and 8 , the Company agrees to employ Executive on an active
and full-time basis, and Executive accepts such employment, subject
to the terms hereof.
2.
Duties . Executive shall serve the Company as its
President and will manage the day-to-day operations of the Company
and perform all duties customary to the role of President.
Executive shall be based at the Company’s offices in Warwick,
Rhode Island and shall report to the Chief Executive Officer of the
Company. Executive shall devote Executive’s full business
time, attention, skill and best efforts to the business of the
Company and faithfully perform such executive, administrative and
supervisory duties as may be consistent with his role as President
and prescribed by the Company’s Board of Directors or the
Chief Executive Officer of the Company. Executive shall act at all
times in compliance, in all material respects, with all written
policies and rules adopted from time to time by the Company’s
Board of Directors.
3.
Term of Employment . The term of Executive’s
employment shall commence as of July 1, 2003 and shall end on
June 30, 2006 (the “ Term of Employment ”).
After June 30, 2006, the Term of Employment shall be
automatically extended each July 1 st for successive periods of one (1) year,
unless (a) either party shall provide the other not less than
30 days written notice of non-renewal or (ii) this
Agreement is terminated by either Executive or the Company pursuant
to Section 5 .
(a)
Base Salary and Bonus . The base annual salary set forth on
Schedule A attached hereto shall be paid to Executive
for the services to be rendered hereunder throughout the Term of
Employment (the “ Base Salary ”), in accordance
with the Company’s normal payroll practices, subject to
applicable federal and state income and social security tax
withholding requirements. Such Base Salary shall be increased on
January 1 st
of each calendar year as set forth
on Schedule A ; provided that commencing on
January 1, 2006, such Base Salary shall be increased by mutual
consent of Executive and the Company; provided, further, that if
such
parties shall
not agree on such increase, the increase for each year shall be
equal to at least 5% of the then-current Base Salary. Additionally,
Executive shall be entitled to receive incentive bonus compensation
pursuant to the provisions set forth on Schedule A
attached hereto throughout the Term of Employment (the “
Bonus ”).
(b)
Executive Benefit Plans . In addition to the Base Salary and
Bonus, the Company shall provide Executive with the opportunity to
participate in the life insurance, medical, disability and other
executive benefit plans set forth on Schedule A
attached hereto (collectively, “ Executive Benefit
Plans ”), subject to the terms and conditions of such
benefit plans. Executive shall also be entitled to four weeks of
vacation in each year and spending allowances as set forth on
Schedule A attached hereto. Notwithstanding the
foregoing, nothing contained in this Agreement shall require the
Company to establish, maintain or continue any of the Executive
Benefit Plans already in existence or hereafter adopted for the
executive employees of the Company, or restrict the right of the
Company to amend, modify or terminate such Executive Benefit Plans
in a manner that does not discriminate against Executive as
compared to other executive employees of the Company.
(c)
Equity Compensation . In the event that the Company or the
Parent adopt an equity, incentive, stock option or similar plan (a
“Plan”) under which all or substantially all of the
Company’s or the Parent’s employees or management
participate on a formula basis, the Executive shall be entitled to
participate in such Plan on substantially the same terms as other
similarly situated executive officers of the Company or its
Affiliates.
(d)
Change of Control . If the Company or the Parent consummates
a Change of Control transaction during the Term of Employment and
if upon such Change of Control this Agreement is not assumed by the
acquiring or surviving entity or if during the one-year period
following the consummation of such Change of Control,
Executive’s employment is terminated by the Company (other
than for Cause or by reason of death or Permanent Disability) or by
Executive for Good Reason, in satisfaction of all obligations of
the Company to Executive hereunder as a result of such termination,
the Company shall pay to the Executive an amount equal to Base
Salary (at the then-current rate) for the greater of the balance of
the Term of Employment or one (1) year (the “ Minimum
Term ”), which payment shall be made in cash in a lump
sum payment at the time of such termination. For purposes of this
Section 4(d) , a Change of Control” shall mean
the sale of all or substantially all of the assets or capital stock
of the Company or the Parent, as the case may be, or the merger or
consolidation of the Company or the Parent with another entity
where the Company or the Parent, as the case may be, is not the
surviving entity or the stockholders of such Company or the Parent,
as the case may be, immediately prior to such Change of Control
transaction are not the owners of at least 51% of the outstanding
stock of the Company or the Parent, as the case may be, after such
Change of Control transaction.
(a)
Termination by the Company . The Company may terminate
Executive’s employment hereunder at any time and for any
reason whatsoever, with or without Cause. Any
such
termination shall be effective from the date on which the Company
delivers to Executive notice of Executive’s
termination.
(b)
Termination by Executive . Executive may terminate
Executive’s employment hereunder at any time and for any
reason whatsoever. Any such termination shall be effective from the
date Executive delivers to Company notice of Executive’s
termination.
(c)
Termination Payments .
(i) In the event Executive terminates Executive’s
employment with the Company voluntarily and without Good Reason, or
the Company terminates Executive’s employment for Cause or by
reason of Executive’s death or Permanent Disability, the
Company shall not be liable to Executive or Executive’s
family or estate for the payment of salary, benefits or payments of
any kind, except for the Base Salary payable under this Agreement
attributable to services performed by Executive prior to the
termination of Executive’s employment or except as provided
in the terms of the Executive Benefit Plans in which Executive may
be a participant. Notwithstanding the foregoing, in the event that
the Company terminates Executive’s employment as a result of
the Executive’s death or Permanent Disability, the Company
shall pay to the Executive or his family or estate a Bonus in an
amount equal to the product of (A) the Bonus that Executive
would have been entitled to receive had he remained employed for
the entire calendar year in which his employment was terminated,
multiplied by (B) a fraction, the numerator of which is the
number of calendar days in such year prior to the termination of
Executive’s employment and the denominator of which is 365.
Such Bonus amount shall be paid at the time the Company customarily
makes such bonus payments.
(ii) In the event the Company terminates Executive’s
employment without Cause or the Executive terminates his employment
for Good Reason, the Company shall continue to pay the Base Salary
to Executive for a period equal to the greater of the balance of
the Term of Employment or one year, conditional upon
Executive’s execution of a release of claims against the
Company. This release shall be in a form reasonably satisfactory to
the Company and shall be a general release of all claims.
Additionally, the Company shall pay to the Executive a Bonus in an
amount equal to the product of (A) the Bonus that Executive
would have been entitled to receive had he remained employed for
the entire calendar year in which his employment was terminated,
multiplied by (B) a fraction, the numerator of which is the
number of calendar days in such year prior to the termination of
Executive’s employment and the denominator of which is 365.
The Base Salary and Bonus payments shall be paid in accordance with
the regular payroll practices of the Company, but shall not
commence until the execution of such release by Executive and the
satisfaction of all waiting and revocation periods required by law.
All such amounts (the “ Severance ”) shall be
subject to and reduced by any applicable federal and state
withholding taxes.
(d)
Definition of “Cause” . For purposes of this
Agreement, “ Cause ” means (i) the commission by
Executive of an act constituting financial dishonesty against the
Company or any of its Affiliates; (ii) the conviction of, or
pleading of guilty or nolo contendre to, a felony by Executive
(other than a traffic-related infraction); (iii) the
commission of an act by Executive involving moral turpitude that
brings the Company or any of its Affiliates into public
disrepute
