AGREEMENT, is made
effective May 21, 2008 (the “Effective Date’) and
entered into as of the 8th day of July 2008 by and
between NYMAGIC, INC., a New York corporation (together with its
successors and assigns, the “Company”), and Robert G.
Simses (the “Chairman”).
WHEREAS, the
Company desires to engage the Chairman pursuant to an agreement
embodying the terms of such engagement (this
“Agreement”) and the Chairman desires to enter into
this Agreement and to accept such engagement, 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 Chairman
(individually a “Party” and together the
“Parties”) agree as follows:
(a) The
term of the Chairman’s engagement under this Agreement shall
commence on the Effective Date and end on May 21, 2011 (the
“Term of Engagement”), unless terminated earlier in
accordance herewith.
(d) Notwithstanding
anything in this Agreement to the contrary, prior to the first
anniversary of the Effective Date of this Agreement the Parties
shall meet to discuss this Agreement and may agree in writing to
modify any of the terms of this Agreement.
2.
Position, Duties and Responsibilities .
(a)
Generally . The Chairman shall serve as a member, and as the
non-executive Chairman, of the Board of Directors of the Company
(the “Board”). For so long as he is serving on the
Board, the Chairman agrees to serve as a member of any committee of
the Board to which he is elected. In any and all such capacities,
the Chairman shall report only to the Board. The Chairman shall
have and perform such duties, responsibilities, and authorities as
are customary for non-executive chairmen of corporations of similar
size and businesses as the Company as they may exist from time to
time and as are consistent with such positions and status. The
Chairman shall devote reasonably sufficient time and attention, and
his best efforts, abilities, experience, and talent to the position
of non-executive Chairman.
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(b)
Other Activities . Anything herein to the contrary
notwithstanding, nothing in this Agreement shall preclude the
Chairman from (i) engaging in the pursuit of full time
employment, (ii) serving as the president and chief operating
officer of The William H. Pitt Foundation Inc., (iii) serving
on the boards of directors of a reasonable number of other
corporations or the boards of a reasonable number of trade
associations and/or charitable organizations and (iv) engaging
in charitable activities and community affairs.
The
Chairman shall be paid an annualized retainer, payable quarterly,
beginning on August 21, 2008, of not less than $150,000,
subject to review for increase at the discretion of the
Compensation Committee (the “Committee”) of the Board
(“Retainer”).
4.
Long-Term Incentive Programs .
(a)
Grant of Restricted Shares . As of the Effective Date the
Chairman shall be granted 30,000 Restricted Share Units pursuant to
an award agreement made under the Company’s Amended and
Restated 2004 Long-Term Incentive Plan (the “LTIP”),
which shall vest ratably beginning on May 21, 2009 (the
“Restricted Share Unit Grants”).
(b)
Deferral of Compensation . The Chairman shall be permitted
to elect to defer receipt, pursuant to written deferral election
terms and forms (the “Deferral Election Forms”)
consistent with Section 409A of the Code, as hereinafter
defined, of all or a specified portion of his long term incentive
compensation under Section 4(a).
The
Company and the Chairman agree that compensation deferred pursuant
to this Section 6(b) shall be fully vested and nonforfeitable;
however, the Chairman acknowledges that his rights to the deferred
compensation provided for in this Section 4 shall be no
greater than those of a general unsecured creditor of the Company,
and that such rights may not be pledged, collateralized,
encumbered, hypothecated, or liable for or subject to any lien,
obligation, or liability of the Chairman, or be assignable or
transferable by the Chairman, otherwise than by will or the laws of
descent and distribution, provided that the Chairman may designate
one or more beneficiaries to receive any payment of such amounts in
the event of his death.
5.
Reimbursement of Business and Other Expenses: Perquisites
.
(a) The
Chairman 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 policies.
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6.
Termination of Engagement .
(a)
Termination Due to Death or Disability . The Term of
Engagement shall be terminated immediately upon the death or
disability (as such term is defined under the Company’s
Long-Term Disability Plan) of the Chairman. In the event the
Chairman’s engagement with the Company is terminated due to
his death or disability, the Chairman, 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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Retainer through the date of death
or the commencement date of the disability (the “Commencement
Date”), as the case may be, which shall be paid in a single
lump sum 15 days following the Chairman’s death or the
Commencement Date, as the case may be;
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(ii)
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elimination of all restrictions on
any Restricted Share Unit Grants or deferred stock awards
outstanding at the time of his death, or the Commencement Date, as
the case may be;
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(iii)
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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 Chairman
is a party;
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(iv)
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settlement of all deferred
compensation arrangements in accordance with the Chairman’s
duly executed Deferral Election Forms; and,
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(v)
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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 Engagement may be terminated by the Company for Cause.
“Cause” shall mean:
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(A)
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The
Chairman’s willful and material breach of Sections 7, 8
or 9 of this Agreement;
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(B)
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The
Chairman 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
Chairman engages in conduct that constitutes willful gross neglect
or willful gross misconduct in carrying out his duties under this
Agreement, resulting, in either case,
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in
material harm to the financial condition or reputation of the
Company;
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(D)
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The
Chairman’s failure to cooperate, if requested by 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 Chairman’s refusal to be deposed or to
provide testimony at any trial or inquiry;
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(E)
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The
Chairman’s substantial and continued refusal to perform his
duties;
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(F)
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The
Chairman’s violation of a material Company Policy;
and,
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(G)
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The
Chairman engages in any act or series of acts that constitute
misconduct requiring a restatement of the Company’s financial
statements pursuant to the Sarbanes-Oxley Act of 2002.
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For purposes of
this Agreement, an act or failure to act on the Chairman’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
Chairman.
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(ii)
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A
termination for Cause shall not take effect unless the provisions
of this paragraph (ii) are complied with. The Chairman 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 90 days of the
Company’s learning of such act or acts or failure or failures
to act. The Chairman 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 Chairman shall then be entitled to a hearing
before the Board at which the Chairman is entitled to appear. Such
hearing shall be held within 25 days of such notice to the
Chairman, 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
Chairman is furnished written notice by the Board confirming that,
in its judgment, grounds for Termination 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 Chairman’s engagement
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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Retainer through the date of the
termination of his engagement for Cause, which shall be paid in a
single lump sum 15 days following the termination of the
Chairman’s engagement;
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(B)
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settlement of all deferred
compensation arrangements in accordance with the Chairman’s
duly executed Deferral Election Forms; and
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(D)
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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, Constructive Termination Without
Cause, or Termination Upon a Change in Control . In the event
the Chairman’s engagement 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 Chairman),
other than due to death, or disability, or in the event there is a
Constructive Termination Without Cause, or a Termination Upon a
Change in Control (as defined below), the Chairman shall be
entitled to and his sole remedies under this Agreement shall
be:
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(i)
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Retainer through the date of
termination of the Chairman’s engagement, which shall be paid
in a single lump sum 15 days following the termination of the
Chairman’s engagement;
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(ii)
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Retainer, at the annualized rate in
effect on the date of termination of the Chairman’s
engagement (or in the event a reduction in the Retainer is a basis
for a Constructive Termination Without Cause, then the Retainer in
effect immediately prior to such reduction), through the Term of
Engagement, which shall be paid in a single lump sum 15 days
following the termination of the Chairman’s
engagement;
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(iii)
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elimination of all restrictions on
any Restricted Share Unit Grants or deferred stock awards
outstanding at the time of termination of engagement;
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(iv)
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any
outstanding stock options, which are unvested, shall vest and the
Chairman shall have the right to exercise any vested stock options
as provided in any stock option award agreement to which the
Chairman is a party;
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(vi)
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settlement of all deferred
compensation arrangements in accordance with the Chairman’s
duly executed Deferral Election Forms;
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(vii)
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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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A
termination without “Cause” shall mean the
Chairman’s engagement is terminated by the Company for any
reason other than Cause (as defined in Section 6(b)) or due to
death or disability.
“Constructive
Termination Without Cause” shall mean a termination of the
Chairman’s engagement at his initiative as provided in this
Section 6(c) following the occurrence, without the Chairman’s
written consent, of one or more of the following events (except as
a result of a prior termination):
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(A)
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(i) a material diminution or
change, adverse to the Chairman, in the Chairman’s position,
(ii) the Board’s removal of the Chairman from the Board,
except for Cause, (iii) the Board’s failure to nominate
the Chairman as a member of the Board, or (iv) the
Board’s failure to elect or re-elect the Chairman as chairman
of the Board;
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(B)
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an
assignment of any duties to the Chairman which are inconsistent
with his status as Chairman;
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(C)
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a
decrease in annual Retainer;
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(D)
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any
other failure by the Company to perform any material obligation
under, or breach by the Company of any material provision of, this
Agreement that is not cured within 30 days after receipt by
the Company of written notice thereof from the Chairman.
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The Term of
Engagement shall be terminated immediately upon a Change of Control
(as defined below), which shall be a “Termination Upon a
Change in Control.”
A “Change
in Control” shall be deemed to have occurred if:
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(i)
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any
Person (other than the Company, any trustee or other fiduciary
holding securities under any employee benefit plan of the Company,
or any company owned, directly or indirectly, by the stockholders
of the Company immediately prior to the occurrence with respect to
which the evaluation is being made) becomes the Beneficial Owner
(except that a Person shall be deemed to be the Beneficial Owner of
all shares that any such
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Person has the right to acquire
pursuant to any agreement or arrangement or upon exercise of
conversion rights, warrants or options or otherwise, without regard
to the sixty day period referred to in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
or any Significant Subsidiary (as defined below), representing 50%
or more of the combined voting power of the Company’s or such
subsidiary’s then outstanding securities;
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(ii)
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during any period of two consecutive
years, individuals who at the beginning of such period constitute
the Board, and any new director (other than a director designated
by a person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii), or
(iv) of this paragraph) whose election by the Board or
nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was
previously so approved but excluding for this purpose any such new
director whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of an individual, corporation,
partnership, group, associate or other entity or Person other than
the Board, cease for any reason to constitute at least a majority
of the Board;
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(iii)
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the
consummation of a merger or consolidation of the Company or any
subsidiary owning directly or indirectly all or substantially all
of the consolidated assets of the Company (a “Significant
Subsidiary”) with any other entity, other than a merger or
consolidation which would result in the voting securities of the
Company or a Significant Subsidiary outstanding immediately prior
thereto continuing to repr
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