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Exhibit 10.3
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
.
4.
Compensation .
(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.
5. Termination
.
(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 involvi
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