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Employment Agreement

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 This Employment Agreement involves

UNITED INSURANCE HOLDINGS CORP. | UNITED INSURANCE HOLDINGS CORP

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Title: Employment Agreement
Governing Law: Florida     Date: 8/15/2016
Industry: Insurance (Prop. and Casualty)     Sector: Financial

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Exhibit 10.1

UNITED INSURANCE HOLDINGS CORP.

A Delaware Corporation

 

Employment Agreement

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 10th day of August, 2016 (“Effective Date”) by and between UNITED INSURANCE HOLDINGS CORP., a Delaware Corporation, and any of its parent or subsidiary companies (collectively, the “Company”), and Paul DiFrancesco, (the “Executive”).

 

Recitals

 

1.

The Executive will be the Chief Underwriting Officer (“CUO”) of the Company and has the requisite experience to serve as such.

 

2.

The Executive, in his duties, will come to possess intimate knowledge of the business and affairs of the Company and its Subsidiaries, their policies, methods and personnel.

 

3.

The Board of Directors (the “Board”) of the Company recognizes that the Executive’s contribution, as CUO of the Company, to the growth and success of the Company and its Subsidiaries will be substantial and desires to assure the Company of the Executive’s employment in an executive capacity and to compensate him therefor.

 

4.

The Board has determined that this Agreement will reinforce and encourage the Executive’s continued attention and dedication to the Company and its Subsidiaries.

 

5.

The Executive is willing to make his services available to the Company and its Subsidiaries on the terms and conditions hereinafter set forth.

Agreement

 

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the parties hereby agree as follows:

 

1.

Term and Duties

 

1. Term.   The Company shall employ the Executive and the Executive shall continue to serve the Company and its Subsidiaries on conditions set forth herein for a term that begins on the Effective Date and continues through the first anniversary of the Effective Date (“Initial Term”). This Agreement shall automatically renew for additional (1) one year terms (“Renewal Term”) at the expiration of the Initial Term or any subsequent Renewal Term unless either of the parties provide at least thirty (30) days’ written notice of their intent to non-renew the Agreement, or unless this Agreement is otherwise terminated in accordance with Section 4.1, 4.2, or 4.3 hereof.

 

2. Duties of Executive . During Executive’s employment, the Executive shall serve as CCO and shall perform the duties of an executive commensurate with such position, shall diligently perform all services as may be reasonably designated by the CEO and the Board; and shall exercise such power and authority as is necessary and customary to the performance of such duties and services. The Executive shall devote his/her services on a fulltime basis to the business and affairs of the Company and the Subsidiaries. However, to the extent it does not interfere or conflict with the proper performance of the Executive’s duties hereunder, the Executive may be involved with non-profit organizations or other outside business endeavors, with prior written permission from the CEO.

 

2.

Compensation .

 

1. Base Salary . The Executive shall receive a Base Salary at the annual rate of $250,000.00. The Base Salary shall be payable in substantially equal installments consistent with the Company’s normal payroll schedule, subject to applicable withholding and other taxes. Base Salary may be increased during the Employment Term but may not be decreased, and the Company shall consider, on an annual basis, the nature, extent and advisability, if any, of an increase in the Executive’s Base Salary.

 

 

 


 

 

2. Additional Cash Compensation . During Executive’s employment, Executive shall be eligible to receive annual bonuses which, in the discretion of the Board, are payable to executive management. Annual bonuses will be based on the Board’s evaluation of achievement against goals established for the senior executive officer group including Executive.

 

3. Restricted Stock Agreement . During Executive's employment, the Company may negotiate and enter into a Restricted Stock Agreement ("RSA") with Executive to issue shares of restricted common stock. Any grants under such RSA's are purely discretionary and will be based on the Board's evaluation of achievement against goals established for the senior executive officer group by the Board. The number of shares issued under the RSA will be at the discretion of the Company. The restricted stock shall vest according to the terms of the RSA.

 

4. Equity Incentive Compensation . In addition to any compensation payable under Section 2.1, 2.2 and 2.3, the Executive shall also be eligible to participate in any future equity incentive compensation plans or directed share programs designed for members of the Company’s senior management team approved by the CEO and Board of Directors so long as this agreement remains in effect.

 

3.

Other Benefits.

 

1. Expense Reimbursement . During Executive’s employment, the Company, upon the submission of supporting documentation by the Executive, and in accordance with Company policies for its executives, shall reimburse the Executive for all expenses actually paid or incurred by the Executive in the course of and pursuant to the business of the Company and the Subsidiaries, including expenses for travel and entertainment, for which the Executive shall follow expense guidelines as set by the CEO or Board from time to time. Expenses incurred by the Executive in connection with maintaining professional licenses and relevant technical job knowledge including, but not limited to, continuing education, professional fees, dues and subscriptions, shall be fully reimbursed without limitation.

 

2. Other Benefits . During Executive’s employment, Executive will be eligible to participate, on terms which are generally available to the other senior executives of the Company and subject to the eligibility requirements of the applicable Company plans as in effect from time to time, in the Company’s deferred compensation, medical, dental, vacation, life insurance and disability programs, and other benefits generally available to the Company’s senior executives from time to time.

 

3. Working Facilities . During Executive’s employment, the Company shall furnish the Executive with an office, and such other facilities and services suitable to his position and adequate for the performance of his duties hereunder.

 

4. Vacation . During Executive’s employment, Executive shall be entitled to reasonable vacations during each year of the Term, the time and duration thereof to be determined by mutual agreement between Executive and the Company. Reasonable vacations shall be no less than four (4) weeks or twenty (20) business days, excluding holidays, each calendar year.

 

4.

Termination.

 

1. Termination for Cause . Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be terminated at any time by the Company for Cause. As used in this Agreement “Cause” shall only mean (i) any action or omission of the Executive which constitutes a material breach of this Agreement, (ii) willful failure to perform the duties assigned to the Executive by the CEO or the Board, from time to time; (iii) fraud, breach of fiduciary duty, embezzlement or misappropriation as against the Company, or (iv) the conviction (from which no appeal can be taken) of Executive for any criminal act which is a felony.   For purposes of this Paragraph 4.1, an act or failure to act shall be considered “willful” only if done or omitted to be done without a good faith reasonable belief that such act or failure to act was in the best interests of the Company. Any termination for Cause pursuant to this Paragraph 4.1 shall be made in writing to Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such termination. Upon any termination pursuant to this Paragraph 4.1, the Company shall pay to the Executive any unpaid Base Salary accrued through the Effective Date of termination specified in such notice. In addition, the Company shall pay any benefits, if any, owed to Executive under any plan provided for Executive under Paragraph 3 hereof in accordance with the terms of such plan as in effect on the date of termination of employment under this Paragraph 4.1 .  Except as provided above, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of Paragraph 3.1 hereof).

 

 

 


 

 

2. Termination Due to Death or Disability . In the event of the Executive’s death, Executive’s employment shall automatically cease and terminate as of the date of death. If Executive becomes Disabled, the Company may terminate Executive’s employment upon thirty (30) days’ written notice to Executive. For purposes of this Agreement, the terms “Disabled” or “Disability” means Executive’s inability, because of physical or mental illness or injury, substantially to perform his duties hereunder as a result of physical or mental incapacity for a continuous period of at least six (6) months, to be determined no earlier than at the end of the six (6) month period. In the event of any dispute as to the Executive’s incapacitation, the Board shall select a physician and Executive shall select a physician. If the two physicians are unable to agree on whether Executive is Disabled for purposes of this Agreement, those two physicians shall select a third physician, whose determination shall be final and binding upon both the Executive and the Company. In the event of the termination of employment due to Executive’s death or Disability, Executive or his estate or legal representatives shall be entitled to receive:

i.payment for all accrued but unpaid Base Salary as of the date of termination of employment;

 

ii.reimbursement for expenses incurred by the Executive pursuant to. Paragraph 3.1 hereof up to and including the date of termination of employment;

 

iii.any earned benefits to which the Executive may be entitled as of the date of termination of employment pursuant to the terms of any compensation or benefit plans to the extent permitted by such plans (with the payments described in subsections (i) through (iii) above collectively called the “Accrued Payments”);

 

iv.any annual incentive bonuses earned but not yet paid for any completed full fiscal year immediately preceding the employment termination date;

 

v.if employment termination occurs prior to the end of any fiscal year, a pro rata annual incentive bonus for such fiscal year in which employment termination occurs (based on actual business days in such fiscal year prior to such employment termination, divided by the total annual business days) determined and paid based on actual performance achieved for that fiscal year against the performance goals for that fiscal year;

 

vi.in the case of death of Executive, the Company shall continue in force all medical and dental benefits applicable to Executive’s family for six (6) months.

 

vii.Any payments under this paragraph shall be made on or before March 15 th of the year following Executive’s death or Disability (with the exception of Base Salary and reimbursement of expenses, which shall be paid no later than the pay period immediately following termination of employment).

 

3. Termination Without Cause . Either party may terminate Executive’s employment hereunder without Cause at any time.

 

(i.)

In the event of the termination of Executive’s employment under this Paragraph 4.3 without Cause by the Company, then Executive shall be entitled to:

 

a. payment of Accrued Payments in full within the next normal payroll period following termination;

b. payment of severance in the amount of Base Salary beginning the day after termination through the later of either: (i) the last day of the Initial Term or the last day of the Renewal Term (if applicable); OR (ii) 180 days after termination(the “Severance Period”). Severance is payable in normal payroll periods through the term of the Severance Period.

c. any annual incentive bonuses earned but not yet paid for any completed full fiscal year immediately preceding the employment termination date, to be paid in full within the next normal payroll period following termination;

d. if employment termination occurs prior to the end of any fiscal year, the pro rata annual incentive bonus for such fiscal year in which employment termination occurs for which Executive would have been entitled if employed at the conclusion of the fiscal year determined and paid based on actual performance achieved for the portion of such fiscal year when Executive was employed by the Company. Any such bonus under this section is to be paid in full within ninety days following completion of the fiscal year;

 

 


 

 

e. the Company shall arrange for the Executive to continue to participate (through COBRA or otherwise), on substantially the same terms and conditions as in effect for the Executive (including any required contribution) immediately prior to such termination, in the medical, dental, disability and life insurance programs provided to the Executive hereof until the earlier of (a) a one-hundred twenty (120) day period from the termination date; or (b) such time as the Executive is eligible to be covered by comparable benefit(s) of a subsequent employer (determined on a benefit-by-benefit and coverage-by-coverage basis). The foregoing is referred to as “Benefits Continuation”. The Executive agrees to notify the Company promptly if and when he begins employment with another employer and if and when he becomes eligible to participate in any benefit or other welfare plans, programs or arrangements of another employer.

(ii.)

In the event of the termination of Executive’s employment under this Paragraph 4.3 without Cause by the Executive, then Executive shall be entitled to only (a) and (b) above. The Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of Paragraph 3.1 hereof).

 

4. Specified Employee.   Notwithstanding anything to the contrary in this Agreement, if at the time of Executive’s termination of employment Executive is a “specified employee,” as defined below, any and all amounts payable to Executive on account of such separation from service that would be nonqualified deferred compensation and would (but for this provision) be payable within six (6) months following the date of termination, shall instead be paid in a single sum on the next regular payday following the expiration of such six (6) month period or, if earlier, the date of Executive’s death; except (A) to the extent of amounts that do not constitute a deferral of compensation within the meaning of Treasury regulation Section 1.409A-1(b), as determined by the Company in its discretion; (B) benefits which qualify as excepted welfare benefits pursuant to Treasury regulation Section 1.409A-1(a)(5); or (C) other amounts or benefits that are not subject to the requirements of Section 409A, shall not be subject to any such acceleration.

 

5. Separation from Service.   For purposes of this Agreement, all references to “Termination Date,” “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Section 1.409A-1 (h) of the Treasury regulations after giving effect to the presumptions contained therein), and the term “specified employee” means an individual determined by the Company to be a specified employee under Treasury regulation Section 1.409A-1(i).

 

6. 409A Compliance.   Payments under this Agreement are intended either to be exempt from the rules of Section 409A or to satisfy those rules, and the Agreement shall be construed accordingly.

 

7. Release of Claims as Condition . The Company’s obligation to pay to the Executive the benefits described in paragraphs 4.2(v), 4.3(i)b, 4.3(i)c, 4.3(i)d, 4.3(i)e and 4.3(ii) of this Agreement shall be conditioned upon the Executive, or his legal representative as appropria


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