Exhibit 10.53
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment
Agreement (the “Agreement”) is made and entered into as
of the 23 rd day of April,
2008, by and between Triad Guaranty Inc., a Delaware corporation
(the “Company”), and Mark K. Tonnesen
(“Employee”).
WITNESSETH:
WHEREAS , the Company and
Employee previously entered into an Employment Agreement, dated
September 9, 2005 (the “Original Agreement”);
and
WHEREAS , the Original
Agreement was supplemented by a Letter Agreement dated
September 9, 2005 (the “Letter Agreement”) as well
as an Amendment to Letter Agreement between Mark K. Tonnesen and
Triad Guaranty Inc. dated December 26, 2006 (the
“Amendment to Letter Agreement”) (the Original
Agreement, as amended by the Letter Agreement and the Amendment to
Letter Agreement being referred to as the “Prior
Agreement”); and
WHEREAS , Section 14(f) of
the Prior Agreement provides that the parties may amend the Prior
Agreement if such amendment is made in writing and is signed by the
parties; and
WHEREAS , the parties desire
to amend and restate the terms and conditions of Employee’s
employment with Company as set forth hereinafter; and
WHEREAS , the Company and
Employee intend for this Agreement to supersede and replace the
terms of the Prior Agreement;
NOW, THEREFORE , in
consideration of the mutual covenants and obligations hereinafter
set forth, the parties hereto agree as follows:
1. Employment and Term .
The Company hereby employs Employee and Employee accepts employment
with the Company as President and Chief Executive Officer of the
Company, on the terms and conditions herein set forth, for a period
commencing on the date of the signing of this Agreement and
expiring on December 31, 2008, unless sooner terminated
pursuant to Section 7. Employee shall have such duties,
responsibilities and authority as are commensurate with his
position, and shall report to the Chairman of the Company’s
Board of Directors (the “Board”). Employee shall also
perform such other or additional duties on behalf of the Company
and its subsidiaries and affiliates as may be reasonably assigned
to him by the Board from time to time.
2. Extent of Services .
During the term hereof, Employee shall devote his entire attention
and energy to the business and affairs of the Company on a
full-time basis and shall not be engaged in any other business
activity, regardless of whether such business activity is pursued
for gain, profit or other pecuniary advantage, unless the Company
otherwise consents; but this shall not be construed as preventing
Employee from investing his assets in such form or manner as will
not require any services on the part of Employee in the operation
of the affairs of the companies in which such investments are made
and will not otherwise conflict with the
provisions of this Agreement. Full-time, as used above, shall mean
a forty (40) hour work week, or such longer work week as the
Board shall from time to time adopt. The foregoing shall not be
deemed to prevent Employee from participating in any charitable or
not-for-profit organization to a reasonable extent, provided
however that Employee does not receive any salary or other
remuneration from such charity or not-for-profit organization.
Employee will be subject to and shall comply with all codes of
conduct, personnel policies and procedures applicable to senior
executives of the Company including, without limitation, policies
regarding sexual harassment, conflicts of interest and insider
trading, of which he shall have received in writing.
3. Compensation .
(a) Salary . During the term
of this Agreement, the Company shall pay Employee an annual salary
of $495,000.00 (“Annual Salary”), payable in accordance
with the Company’s regular payroll procedures. For any period
of Voluntary Retirement Extension (as defined in Section 7(e)), the
Company shall pay Employee an annual salary of $990,000, payable in
accordance with the Company’s regular payroll
procedures.
(b) Bonus . In addition to his
Annual Salary, Employee shall receive: (i) retention bonuses
equal to (A) $150,000, payable on the first regular pay period
following July 1, 2008, provided that Employee is employed on
July 1, 2008 and (B) $300,000, payable on the first regular
pay period following December 31, 2008, provided that Employee
is employed on December 31, 2008; and (ii) a severance
bonus equal to $225,000, payable on the first regular pay period
following December 31, 2008, provided that Employee is
employed on December 31, 2008. Notwithstanding the foregoing,
the bonus payments under (i) and (ii) shall be paid earlier
(if applicable) on the first regular pay period following the
effective date of Employee’s Retirement, Involuntary
Termination Without Cause or Good Reason Termination.
(c) Restricted Stock Grant;
Existing Awards. Employee shall receive a grant of restricted
stock under the terms of the Triad Guaranty Inc. 2006 Long-Term
Stock Incentive Plan (as amended and restated on January 1,
2008) (the “Plan”) for 40,500 shares (the
“Award”). The shares subject to the Award shall vest in
a lump sum three (3) years from the date of grant or two
(2) years from the date of Retirement (as defined in
Section 7(e)), if earlier. The terms of the Award and the
terms of all other options, restricted stock awards, phantom stock
awards or other equity awards granted to Employee prior to and
remaining outstanding on the date hereof shall be governed in all
respects by the terms of the Plan and the respective award
agreements under which they were originally granted.
4. Benefits . Employee
shall be entitled to participate in all medical and other employee
plans of the Company, if any, on the same basis as other executives
of the Company, subject in all cases to the respective terms of
such plans.
5. PTO . Employee shall
be entitled to paid time off (“PTO”) in accordance with
the Company’s PTO policy in effect at the time the PTO is
taken as if Employee had at least ten (10) years of service
with the Company. In the event that the full PTO is not taken by
Employee, no
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PTO
time shall accrue for use in future years, except in accordance
with the Company’s then-existing policy for the carry forward
of accrued PTO.
6. Expenses . Employee
shall be entitled to prompt reimbursement for all reasonable
expenses incurred by him in furtherance of the business of the
Company in connection with his performance of his duties hereunder,
in accordance with the policies and procedures established for
executive officers of the Company, and provided Employee properly
accounts for such expenses. In addition, Employee shall be entitled
to prompt reimbursement for up to $5,000.00 of legal fees and
expenses incurred by Employee in the negotiation of this Agreement.
All reimbursements must be made no later than the end of the
calendar year following the calendar year in which the expense was
incurred. The expenses eligible for reimbursement under this
Section 6 in any calendar year shall not affect any expenses
eligible for reimbursement or in-kind benefits to be provided to
Employee in any other calendar year. Employee’s rights under
this Section 6 shall not be subject to liquidation or exchange
for any other benefit.
7. Termination .
(a) Death . This Agreement and
Employee’s employment hereunder shall terminate immediately
upon Employee’s death. In such event, the Company shall be
obligated to pay only (i) Employee’s salary to the end
of the month in which he dies; and (ii) a lump sum death
benefit to Employee’s estate equal to Employee’s Annual
Salary at the time of his death.
(b) Incapacity . To the extent
permitted by law, if Employee is absent from his employment for
reasons of illness or other physical or mental incapacity which
renders him unable to perform the essential functions of his
position, with or without reasonable accommodation, for more than
an aggregate of ninety (90) days, whether or not consecutive,
in any period of twelve (12) consecutive months, then upon at
least sixty (60) days’ prior written notice to Employee,
if such is consistent with applicable law, the Company may
terminate this Agreement and Employee’s employment hereunder,
unless, within that notice period, Employee shall have resumed
performance of the essential functions of his positions, with or
without reasonable accommodation. In the event of a termination of
employment under this Section 7(b), the Company shall be
obligated to pay Employee his salary from the date of such
termination until the earlier of (i) the date on which
coverage commences under the long-term disability insurance policy
maintained by the Company for the benefit of Employee, if any, or
(ii) the date two (2) months after the date of such
termination.
(c) Termination by the Company
.
(i) The Company may terminate this
Agreement and Employee’s employment hereunder at any time for
Cause. As used herein, “Cause” shall mean:
(A) a material breach by Employee of
his duties and obligations hereunder, including but not limited to
gross negligence in the performance of his duties and
responsibilities or the willful failure to
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follow the
Board’s directions; provided, however, that Cause shall not
exist unless the Company has provided Employee with written notice
setting forth the existence of the non-performance, failure or
breach and Employee shall not have cured same within thirty
(30) days after receiving such notice;
(B) willful misconduct by Employee
which in the reasonable determination of the Board has caused or is
likely to cause material injury to the reputation or business of
the Company;
(C) any act of fraud, material
misappropriation or other dishonesty by Employee; or
(D) Employee’s conviction of a
felony.
In the event of
termination for Cause, the Company shall pay Employee his salary up
to the date that is thirty (30) days after the delivery to him
of the notice of termination, which date shall be for all purposes
of this Section 7(c)(i) the date of termination of his
employment, unless there has been a cure under
Section 7(c)(i)(A). In the event of termination for Cause,
Employee shall not receive any previously unpaid bonus or bonuses
except any earned but unpaid bonus with respect to any bonus
measurement period ended prior to the date of termination.
(ii) Notwithstanding anything
contained herein to the contrary, the Company also may terminate
this Agreement and Employee’s employment hereunder for any
reason whatsoever, upon no less than sixty (60) days’
prior written notice to Employee. In the event that the Company
terminates this Agreement pursuant to the provisions of this
Section 7(c)(ii) (an “Involuntary Termination Without
Cause”), then, for purposes of Section 8, Employee shall
be deemed to have terminated because of Retirement pursuant to
Section 7(e).
(d) Termination by Employee .
Other than on account of a Good Reason Termination (as defined in
this Section 7(d)) or Retirement (as defined in
Section 7(e)), Employee may terminate this Agreement and his
employment hereunder for any reason whatsoever, upon no less than
sixty (60) days’ prior written notice to the Company. In
the event that Employee terminates this Agreement pursuant to the
provisions of this Section 7(d) without “Good Reason”
as hereinafter defined, Employee shall be entitled to receive his
salary up to the date of termination set forth in the notice of
termination, and in such event, Employee shall not receive any
previously unpaid bonus or bonuses except any earned but unpaid
bonus with respect to bonus measurement period ended prior to the
date of termination. Employee may also resign for Good Reason (a
“Good Reason Termination”). As used herein, “Good
Reason” shall mean:
(i) a material breach by the Company
of its obligations hereunder, including but not limited to a
material and adverse change in the status or position of Employee
as an executive officer of the Company including, without
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limitation, a
material diminution in duties, responsibilities or authority,
except in connection with the incapacity of Employee, or
non-payment of Annual Salary or other compensation due hereunder;
or
(ii) the Company, without
Employee’s consent (such consent not to be unreasonably
withheld), transfers or relocates the office of Employee which
would require Employee to be based more than fifty (50) miles
distance from his initial office in Winston-Salem, North
Carolina;
provided,
however, that Good Reason shall not exist unless Employee has
provided the Company with a written notice setting forth the
reasons for the existence of Good Reason, and the Company has not
cured the reasons for the existence of Good Reason within thirty
(30) days after receiving such notice.
(e) Voluntary Retirement
. Employee may retire from the Company as of the
close of business on December 31, 2008, or such earlier date
as mutually agreed to by Employee and the Company
(“Retirement”). Notwithstanding the foregoing, the
Company may, at its election made at any time by providing written
notice to Employee prior to December 31, 2008, delay the date
of Employee’s Retirement from December 31, 2008 for a
period not to extend beyond March 31, 2009 (“Voluntary
Retirement Extension”). Employee’s failure to continue
to perform his duties during any Voluntary Retirement Extension
will be treated as a termination by Employee under Section 7(d)
without Good Reason and Employee will not be entitled to the
benefits provided under Section 8.
(f) Subsidiary Offices and
Positions; Company and Subsidiary Directorships. Upon
termination of Employee’s employment for any reason, his
employment by any subsidiary of the Company shall likewise then be
terminated. In addition, upon such termination Employee shall
immediately resign as a member of the Board and the board of
directors of any subsidiary of the Company on which Employee is
serving at the time of such termination, and he shall evidence such
resignation by promptly submitting his letter of resignation to the
chairman of the Board and each such subsidiary board of
directors.
8. Benefits Upon
Termination
(a) Involuntary Termination
Without Cause, Good Reason Termination and Retirement . If
Employee’s employment is terminated as a result of an
Involuntary Termination Without Cause, a Good Reason Termination,
or Retirement (the day of such Involuntary Termination Without
Cause, Good Reason Termination or Retirement, the
“Termination Date”), then Employee shall be entitled to
the following benefits (as applicable):
(i) Retirement Payments :
$675,000 in total retirement payments, payable in 18 equal monthly
installments in advance over a period commencing as of the first
day of the seventh month following the Termination Date and ending
on the first day of the 24th month following the Termination Date
(such
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24-month period
following the Termination Date being referred to herein as the
“Post-Termination Period”).
(ii) Continued Participation in
Company Health Care Plan : In addition to the other benefits
provided in Section 8(a)(i), Employee shall be entitled to the
following benefits:
(A) Employee shall be entitled to
participate (treating Employee as an “active employee”
of the Company for this purpose) in any health care, dental, vision
or prescription drug pl
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