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Exhibit
10.50
EXECUTIVE SEVERANCE
AGREEMENT
This EXECUTIVE
SEVERANCE AGREEMENT (the “ Agreement ”) is
entered into as of January 1, 2008, by and between Nationwide
Mutual Insurance Company (the “ Company ”) and
Terri L. Hill (“ Executive ”).
WHEREAS, the
parties desire to enter into an agreement to reflect
Executive’s executive capacities in the Company’s
business and to provide for Executive’s employment by the
Company, upon the terms and conditions set forth herein.
WHEREAS, Executive
has agreed to certain confidentiality, non-competition and
non-solicitation covenants contained hereunder, in consideration of
the additional benefits provided to Executive under this
Agreement.
WHEREAS, certain
capitalized terms shall have the meanings given those terms in
Section 3 of this Agreement.
WHEREAS, Executive
and the Company are parties to an Employment Agreement dated
September 23, 2003 (the “ Employment Agreement
”), and the parties have agreed that this Agreement shall
supercede and replace the Employment Agreement.
NOW, THEREFORE, the
parties hereto, intending to be legally bound, hereby agree as
follows:
1.
Employment . The Company hereby agrees to employ Executive,
and Executive hereby accepts such employment and agrees to perform
Executive’s duties and responsibilities, in accordance with
the terms, conditions and provisions hereinafter set
forth.
1.1 Employment
Term . This Agreement shall be effective as of the date set
forth above, and shall continue until December 31, 2008,
unless the Agreement is terminated sooner in accordance with
Section 2 below. In addition, the term of the Agreement shall
automatically renew for periods of one year unless either party
gives written notice to the other party, at least 60 days prior to
the end of the initial term or at least 60 days prior to the end of
any one-year renewal period, that the Agreement shall not be
further extended. The period commencing on the effective date and
ending on the date on which the term of Executive’s
employment under the Agreement shall terminate is hereinafter
referred to as the “ Employment Term .” The
failure of the Company to renew this Agreement shall not be
considered a termination of Executive’s employment under this
Agreement and shall not give Executive grounds to terminate
employment for Good Reason (as defined in Section 3) under
this Agreement.
1.2 Duties and
Responsibilities . During the Employment Term, Executive shall
serve as the Executive Vice President and Chief Administrative
Officer of the Company, or in such other executive positions as the
Board of Directors of the Company (the “ Board
”) determines. Executive shall perform all duties and accept
all responsibilities incident to such position or as may be
reasonably assigned to him by the Chief Executive Officer of the
Company or the Board.
1.3 Extent of
Service . During the Employment Term, Executive agrees to use
Executive’s full and best efforts to carry out
Executive’s duties and responsibilities under
Section 1.2 hereof with the highest degree of loyalty and the
highest standards of care and, consistent with the other provisions
of this Agreement, Executive agrees to devote substantially all of
Executive’s business time, attention and energy thereto. The
foregoing shall not be construed as preventing Executive from
making investments in other businesses or enterprises, provided
that Executive agrees not to become engaged in any other business
activity which, in the reasonable judgment of the Board, is likely
to interfere with Executive’s ability to discharge
Executive’s duties and responsibilities to the Company. The
Executive will not serve on the board of directors of an entity
unrelated to the Company (other than a non-profit charitable
organization) without the consent of the Board.
1.4 Base
Salary . During the Employment Term, for all the services
rendered by Executive hereunder, the Company shall pay Executive a
base salary (“ Base Salary ”), at the annual
rate in effect on the date of this Agreement, payable in
installments at such times as the Company customarily pays its
other employees. Executive’s Base Salary shall be reviewed
periodically for appropriate increases by the Board (or a committee
of the Board) pursuant to the Board’s normal performance
review policies for senior level executives.
1.5 Retirement,
Welfare and Other Benefit Plans and Programs . During the
Employment Term, Executive shall be entitled to participate in all
employee retirement and welfare benefit plans and programs made
available to the Company’s senior level executives as a
group, as such retirement and welfare plans may be in effect from
time to time and subject to the eligibility requirements of such
plans. During the Employment Term, Executive shall be provided with
executive fringe benefits and perquisites under the same terms as
those made available to the Company’s senior level executives
as a group, as such programs may be in effect from time to time.
During the Employment Term, Executive shall be entitled to vacation
and sick leave in accordance with the Company’s vacation,
holiday and other pay for time not worked policies. Nothing in this
Agreement or otherwise shall prevent the Company from amending or
terminating any retirement, welfare or other employee benefit
plans, programs, policies or perquisites from time to time as the
Company deems appropriate.
1.6
Reimbursement of Expenses . During the Employment Term,
Executive shall be provided with reimbursement of reasonable
expenses related to Executive’s employment by the Company on
a basis no less favorable than that which may be authorized from
time to time for senior level executives as a group.
1.7 Incentive
Compensation . During the Employment Term, Executive shall be
entitled to participate in all short-term and long-term incentive
programs established by the Company for its senior level executives
generally, at levels commensurate with the benefits provided to
other senior executives and Executive’s position with the
Company. Executive’s incentive compensation shall be subject
to the terms of the applicable plans and shall be determined based
on Executive’s individual performance and Company performance
as determined by the Board (or a committee of the
Board).
2.
Termination . Executive’s employment shall terminate
upon the occurrence of any of the following events:
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2.1 Termination
Without Cause . The Company (by action of the Board) may remove
Executive at any time without Cause (as defined in Section 3)
from the position in which Executive is employed hereunder (in
which case the Employment Term shall be deemed to have ended) upon
not less than 60 days’ prior written notice pursuant to
Section 15 to Executive; provided, however, that, in the event
that such notice is given, Executive shall be under no obligation
to render any additional services to the Company and shall be
allowed to seek other employment, to the extent such other
employment is consistent with Executive’s obligations under
Section 6.
2.2 Resignation
for Good Reason After a Substantial Reorganization . If the
Board determines for purposes of this Agreement that a substantial
reorganization of the Company has occurred, the Board may establish
a period of time during which Executive may elect to resign if an
event constituting Good Reason (as defined in Section 3)
occurs. In that event, Executive may initiate termination of
employment by resigning under this Section 2.2 for Good Reason
during the period specified by the Board. Executive shall give the
Company not less than 60 days prior written notice pursuant to
Section 15 of such resignation, which notice shall be provided
to the Company within 60 days following the occurrence of the event
giving rise to the Good Reason resignation. A substantial
reorganization shall not be considered to have occurred unless the
Board specifically determines that a substantial reorganization has
occurred for purposes of this Agreement and the Board establishes a
time period during which Executive may elect to resign if an event
constituting Good Reason occurs. Nothing in this Agreement shall
obligate the Board to make any such determination.
2.3 Benefits
Payable Upon Termination Without Cause or Resignation for Good
Reason After a Substantial Reorganization .
(a) Upon any
removal or resignation described in Section 2.1 or 2.2 above,
Executive shall be entitled to receive only the amount due to
Executive under the Company’s then current severance pay plan
for employees, if any. No other payments or benefits shall be due
under this Agreement to Executive, but Executive shall be entitled
to any benefits accrued or earned in accordance with the terms of
any applicable benefit plans and programs of the
Company.
(b) Notwithstanding
the provisions of Section 2.3(a), in the event of a removal or
resignation described in Section 2.1 or 2.2 during the
Employment Term, if Executive executes and does not revoke a
written release and waiver of claims upon such removal or
resignation, in form and substance acceptable to the Company (the
“ Release ”), of any and all claims against the
Company and all related parties with respect to all matters arising
out of Executive’s employment by the Company, or the
termination thereof (other than claims based upon any severance
entitlements under the terms of this Agreement or entitlements
under any plans or programs of the Company under which Executive
has accrued a benefit), Executive shall be entitled to receive the
severance benefits described below, in lieu of the payment
described in Section 2.3(a).
(i) Executive
shall receive a lump sum cash payment equal to two times
Executive’s annual Base Salary in effect immediately before
the Termination Date
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(including salary reduction
amounts of Base Salary under the Company’s benefit plans and
programs).
(ii)
Executive shall receive Executive’s annual short-term
incentive bonus (PIP) for the year in which Executive’s
Termination Date occurs, at the time that annual bonuses for the
year are paid to other executives, based on the Company’s
actual performance for the year, but in an amount not less than
Executive’s target annual bonus in effect for the
year.
(iii) The
Company shall pay Executive a lump sum cash payment equal to the
cost that Executive would incur if Executive continued medical,
dental and vision coverage under section 4980B of the Code (as
defined in Section 3)(“ COBRA ”) or the
Company’s retiree medical plan, if applicable, for Executive,
and, where applicable, his or her spouse and dependents, for the
Severance Period (as defined in Section 3). The cash payment
shall include a tax gross up to cover Executive’s income and
FICA taxes imposed on the payment under this subsection (iii).
Executive may elect COBRA continuation coverage according to the
terms of the Company’s applicable benefit plans, for the
period permitted under such plans.
(iv)
Executive shall receive a lump sum payment equal to two times the
amount of Executive’s NVA Target Award Opportunity and/or
Business Unit Target Award Opportunity, as applicable, under the
Nationwide Property and Casualty Long-Term Performance Plan, as
amended, the Third Amended and Restated Nationwide Financial
Services, Inc. 1996 Long-Term Equity Compensation Plan, or any
successor plan in effect for the year in which Executive’s
Termination Date occurs. The amount determined under this
subsection (iv) shall be paid at the time that NVA or Business
Unit awards for the year are paid to other executives, but not
later than March 15 after the end of the year in which the
Termination Date occurs. The payment under this subsection
(iv) shall be paid in lieu of any NVA or Business Unit award
under the applicable plan for the year in which Executive’s
Termination Date occurs.
(v)
Executive’s outstanding stock options and restricted stock
with respect to stock of Nationwide Financial Services, Inc. or any
Affiliate of the Company shall become vested and exercisable on the
Termination Date to the extent that such options and restricted
stock would have become vested and exercisable on the next vesting
date had Executive remained an employee of the Company. All other
unvested stock options and restricted stock shall be forfeited,
except to the extent that the applicable grant agreement requires
otherwise. No additional grants shall be made to Executive after
Executive’s termination of employment.
(vi)
Executive shall receive supplemental benefits under this Agreement
equal to:
(A) the
benefits that Executive would have received under the Nationwide
Retirement Plan, Nationwide Supplemental Retirement Plan,
Nationwide Excess Benefit Plan, Nationwide Savings Plan, Nationwide
Supplemental Defined Contribution Plan and Nationwide Individual
Deferred Compensation Plan, as in effect at Executive’s
Termination Date, had Executive’s benefits under those Plans
been fully vested as of Executive’s Termination Date, reduced
by
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(B) the
benefits that Executive actually receives under the Nationwide
Retirement Plan, Nationwide Supplemental Retirement Plan,
Nationwide Excess Benefit Plan, Nationwide Savings Plan, Nationwide
Supplemental Defined Contribution Plan and Nationwide Individual
Deferred Compensation Plan.
The benefits under this
subsection (vi) shall be paid as described in Section 8.
The benefits payable under this subsection (vi) and subsection
(vii) below shall not result in any duplication of
benefits.
(vii) If
Executive’s Termination Date occurs within three years of the
date on which Executive would have been first eligible to retire
under the Nationwide Retirement Plan, Executive shall receive a
supplemental benefit under this Agreement equal to:
(A) the
benefits that Executive would have received under the Nationwide
Retirement Plan, Nationwide Supplemental Retirement Plan and
Nationwide Excess Benefit Plan as in effect at Executive’s
Termination Date, had Executive earned service and age credit for
the period ending on the first to occur of (i) three years
after the Termination Date or (ii) the earliest date on which
Executive would have been eligible to retire under the Nationwide
Retirement Plan, and had Executive been fully vested in
Executive’s benefit under such Plans, reduced by
(B) the
benefits that Executive actually receives under the Nationwide
Retirement Plan, Nationwide Supplemental Retirement Plan and
Nationwide Excess Benefit Plan, and the benefits payable under
subsection (vi) above with respect to the Nationwide
Retirement Plan, Nationwide Supplemental Retirement Plan and
Nationwide Excess Benefit Plan.
The benefits under this
subsection (vii) shall be paid as described in Section 8.
The benefits payable under this subsection (vii) and
subsection (vi) above shall not result in any duplication of
benefits.
(viii) The
Company shall pay Executive a lump sum cash payment equal to the
matching contributions that the Company would have made for
Executive under the Nationwide Savings Plan and the Nationwide
Supplemental Defined Contribution Plan, as in effect at
Executive’s Termination Date, as if Executive continued in
employment for the Severance Period, receiving compensation at a
rate equal to Executive’s covered compensation amount for the
calendar year prior to the year in which the Termination Date
occurs and as if Executive continued the same rate of contributions
to the applicable plans as in effect immediately before
Executive’s Termination Date.
(ix) The
Company shall cause Executive to receive service and age credit for
purposes of eligibility under the Company’s retiree medical
plan (but not for Company contributions towards the cost of retiree
medical) until the end of the Severance Period, as if Executive had
continued in employment during the Severance Period.
(x) During
the Severance Period, the Company shall pay or reimburse Executive
for the cost of reasonable outplacement assistance services (not to
exceed a total of $11,000) provided by any outplacement agency
selected by Executive.
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(xi) The Company
shall pay Executive a lump sum cash payment equal to the annual
value of the financial counseling services provided by the Company
to Executive immediately before Executive’s Termination
Date.
(xii)
Executive shall have the right to retain the computer, printer, fax
machine and office furniture that was provided by the Company for
use by Executive at Executive’s residence at the Termination
Date.
(xiii)
Executive shall receive any other amounts earned, accrued or owing
but not yet paid under Section 1 above and any other benefits
in accordance with the terms of any applicable plans and programs
of the Company.
(xiv) Payment
of the lump sum benefits described above (other than as described
in subsections (ii) and (iv) above) shall be made within
30 days after Executive’s Termination Date (as defined in
Section 3), subject to Executive’s execution of an
effective Release.
2.4 Retirement
or Other Voluntary Termination . Executive may voluntarily
terminate employment for any reason, including voluntary
retirement, upon 60 days’ prior written notice pursuant to
Section 15. In such event, after the effective date of such
termination, except as provided in Section 2.2 (with respect
to a resignation for Good Reason), no further payments shall be due
under this Agreement. However, Executive shall be entitled to any
benefits due in accordance with the terms of any applicable benefit
plans and programs of the Company.
2.5
Disability . The Company (by action of the Board) may
terminate Executive’s employment if Executive has been unable
to perform the essential functions of Executive’s position
with the Company, with or without reasonable accommodation, by
reason of physical or mental incapacity for a period of six
consecutive months (“Disability”); provided, however,
that the Company shall continue to pay Executive’s Base
Salary until the Company acts to terminate Executive’s
employment. Executive agrees, in the event of a dispute under this
Section 2.5 relating to Executive’s Disability, to
submit to a physical examination by a licensed physician selected
by the Board. Executive acknowledges that the provisions of this
Section 2.5 supersede the employment termination provisions
otherwise applied to disabled employees. If Executive’s
employment terminates on account of Disability, no further payments
shall be due under this Agreement. However, Executive shall be
entitled to (i) any benefits due in accordance with the terms
of any applicable benefit plans and programs of the Company and
(ii) a pro rated bonus for the year in which Executive’s
Disability occurs, which bonus shall be calculated (on a prorated
basis) and paid according to Section 2.3(b)(ii)
above.
2.6 Death .
If Executive dies while employed by the Company, the Company shall
pay to Executive’s executor, legal representative,
administrator or designated beneficiary, as applicable,
(i) any amounts earned, accrued or owing but not yet paid
under Section 1 above and any benefi
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