Exhibit 10.18
SEPARATION AND CONSULTING AGREEMENT
This SEPARATION AND CONSULTING
AGREEMENT (this “ Agreement ”) dated as of
January 3, 2008 (the “ Effective Date ”) is
made by and among QBE Holdings, Inc., a Delaware corporation
(“ Parent ”), North Pointe Holdings Corp., a
Michigan corporation (the “ Company ”) and James
G. Petcoff (the “ Executive ”).
W
I T N E S S E T H
WHEREAS , the Executive and
North Pointe Holdings Corp. entered an employment agreement dated
June 10, 2005, as amended as of January 1, 2007 (the
“ Employment Agreement ”), pursuant to which
Executive serves as President, Chief Executive Officer and Chairman
of North Pointe Holdings Corp.; and
WHEREAS , pursuant to an
Agreement and Plan of Merger dated as of January 3, 2008 (the
“ Merger Agreement ”) between Parent, Noble
Acquisition Corporation, a Michigan corporation and a direct,
wholly-owned subsidiary of Parent (“ Merger Sub
”), and the Company, Merger Sub shall merge with and into the
Company (the “ Merger ”) at which time the
Company shall become a wholly-owned subsidiary of Parent; and
WHEREAS , in connection with
the Merger, the Company and the Executive have agreed that
Executive will resign his employment with the Company as of the
Closing Date (as such term in defined in the Merger Agreement);
and
WHEREAS , subject to the
terms and conditions contained herein, the Executive and the
Company have mutually agreed to embody in this Agreement the terms
and conditions applicable to the Executive’s termination of
employment with the Company.
NOW, THEREFORE , in
consideration of the premises and mutual covenants contained herein
and for other good and valuable consideration, the receipt and
sufficiency of which are mutually acknowledged, the Company and
Executive hereby agree as follows:
1.
Termination of Employment Agreement . The Employment
Agreement between Executive and the Company shall be terminated and
cancelled in its entirety as of the Closing Date, and this
Agreement shall constitute the entire agreement between Executive
and the Company relating to the Executive’s employment with
the Company, termination thereof, and certain activities (as set
forth herein) following such termination and shall expressly
supersede in its entirety the Employment Agreement and any other
agreement and understanding, whether written, oral, express or
implied, between the Executive and the Company relating to the
Executive’s employment with and termination from employment
with the Company. For the avoidance of doubt, the Executive hereby
specifically waives his right to any and all payments or benefits
in connection with his termination of employment pursuant to
Section 10 (relating to Post-Termination Payments) and
Section 11 (relating to Change of Control) of the Employment
Agreement.
2.
Resignation . Effective on the Closing Date and subject to
the consummation of the transactions contemplated in the Merger
Agreement, the Executive shall resign as President,
Chief
Executive Officer and Chairman of the Company and from any and all
directorships, committee memberships or any other positions he
holds with the Company or any of its subsidiaries.
3.
Accrued Payments and Benefits .
(a)
Accrued Base Salary . On the Closing Date, the Company shall
pay to the Executive all accrued and unpaid base salary earned
through the Closing Date.
(b)
Bonus . On the Closing Date, the Company shall pay to the
Executive a pro rata portion of Executive’s bonus for 2008,
based upon the cash bonus paid or due to the Executive under the
Company’s bonus plan applicable to the Executive for
2007.
(c)
Accrued Vacation Pay . On the Closing Date, the Company
shall pay to the Executive all accrued and unused vacation pay
earned through the Closing Date.
(d)
Benefits . Except as otherwise specifically provided in this
Agreement, by law or pursuant to the express provisions of any
Company employee benefit plan, the Executive’s participation
in all employee benefit plans and executive compensation plans and
practices of the Company shall terminate on the Closing Date and
the Executive shall be entitled to receive any benefits or rights
provided to a terminating executive in accordance with the terms of
any such plan (excluding any severance payments pursuant to the
terms of any Company severance plan).
4.
Consulting Services .
(a)
Services . Subject to the Executive’s execution, on
the Closing Date, and non-revocation of the waiver and release
attached hereto as Exhibit A , the Company shall
engage, and the Executive shall serve the Company, in the capacity
as a consultant providing consulting, advisory and related services
(the “ Consulting Services ”) to the Company and
its subsidiaries as requested by the Company. The term of the
Executive’s engagement shall commence on the Closing Date and
shall consist of four (4) six-month segments ending on the
second anniversary of the Closing Date; provided, however, that
either party may give written notice to the other, at least
forty-five (45) days prior to the end of any such six-month
segment, terminating the consulting engagement as of the last day
of such segment (the “ Consulting Term ”).
During the Consulting Term, the Executive shall perform such
Consulting Services at such time or times as the Company may
reasonably request subject to the Executive’s concurrence
(not to be unreasonably withheld); provided, however , that
in no event will Executive be required to perform Consulting
Services for more than 40 hours in any calendar month during the
Consulting Term.
(b)
Fees . During the Consulting Term, the Executive shall be
entitled to a consulting fee in an amount equal to $50,000 per
month, payable in arrears on the last business day of each month
. The Executive shall be reimbursed by the Company for the
Executive’s reasonable and customary expenses incurred in
connection with services rendered during the Consulting Term,
subject to the submission of properly documented receipts, in
accordance with the policies, programs, procedures and practices of
the Company in effect at the time the expense was incurred, as the
same may be changed from time to time.
(c)
Death or Permanent Disability . In the event of
Executive’s death or cessation of services as a result of his
permanent disability during the Consulting Term, an additional
amount equal to $300,000 shall become due and payable by the
Company as of the date of Executive’s death or cessation of
services as a result of his permanent disability. For purposes of
this paragraph (c), “permanent disability” shall mean
any disability resulting from a physical or mental illness pursuant
to which Executive is, or would reasonably be expected to be,
unable to perform the Consulting Services for a period of at least
three (3) consecutive months (regardless of the duration of
the remainder of the Consulting Term).
(d)
Independent Contractor Status . No provision of this
Section 4 shall imply any relationship of partnership, agency
or employer and employee between the Company and the Executive
during the Consulting Term. The Executive will serve as an
independent contractor providing consulting services to the
Company. The Executive shall not under any circumstances represent
that he is an employee or agent of the Company or any of its
subsidiaries. The Executive shall assume full responsibility for
payment of all federal, state and local taxes or contributions
imposed or required under unemployment insurance, social security
and income tax laws, with respect to the Executive’s
performance of Consulting Services, and the Executive agrees to
file any certificates with the Company or other third parties that
may at any time be required to demonstrate his status as an
independent contractor. The Executive shall not, by reason of this
Section 4, acquire any benefits, privileges or rights under
any benefit plan operated by the Company or its subsidiaries for
the benefit of their employees, including, without limitation,
(i) any pension or profit-sharing plans or (ii) any plans
providing medical, dental, disability or life insurance protection,
except as may otherwise be required under applicable law, and
except that the Company covenants and agrees to allow the Executive
to participate, for the duration of the Consulting Term, in group
benefit plans extended to its employees if and to the extent that
the Executive is and remains eligible to participate in such plans
on the date hereof and immediately following cessation of his
employment by the Company.
5.
Full Settlement . The Executive acknowledges that the
amounts paid under Sections 3 and 4 shall constitute full
settlement and satisfaction with respect to all obligations and
liabilities of the Company and its affiliates, officers, directors,
trustees, employees, shareholders, representatives and/or agents to
the Executive with respect to his employment with the Company,
including, without limitation, all claims for wages, salary,
vacation pay, draws, incentive pay, bonuses, stock and stock
options (other than stock and stock options owned by Executive on
the date of this Agreement), commissions, severance pay and any and
all other forms of compensation or benefits.
6.
Return of Company Property . On the Closing Date, the
Executive shall return to the Company all Company-owned property in
his possession or under his control on such date, including without
limitation, credit cards, computer hardware and software, other
electronic equipment, records, data, notes, reports,
correspondence, financial information, customer files and
information and other documents or information (including any and
all copies of such property) written or created by, for or on
behalf of the Company, whether or not by or at the Company’s
request.
7.
Release and Waiver of Claims at the Closing Date . In
consideration for the benefits and payments provided for in
Sections 3 and 4 of this Agreement, the Executive hereby
agrees
to execute a release and waiver of claims in the form attached
hereto as Exhibit A , effective as of the Closing
Date.
8.
Confidentiality; Noncompetition; Nonsolicitation .
(a)
Noncompetition . The Executive covenants and agrees that the
Executive will not during the Consulting Term and for a period of
two (2) years following the termination of the Consulting Term
(the “ Noncompetition Period ”), without the
prior written consent of the Company (such consent not to be
unreasonably withheld), directly or indirectly, through any person,
firm or corporation, alone or as a member of a partnership or as an
officer, director, stockholder, investor or employee of or
consultant to any other corporation or enterprise or otherwise,
engage or be engaged, or assist any other person, firm, corporation
or enterprise in engaging or being engaged, in an insurance
underwriting or agency business activity that is competitive with
the business of the Company or its affiliates or subsidiaries, or
in any other business being conducted by the Company or any of its
subsidiaries on the date hereof or during the Consulting Term
i
|
