EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated ____________________, 2005 by and between American
Physicians Assurance Corporation, a Michigan insurance corporation having a
principal place of business in East Lansing, Michigan, its successors, assigns,
affiliates, and related companies (the "Company") and [ ] (the "Executive").
WHEREAS, the Executive currently serves as the [ ] of American Physicians
Capital, Inc.; and
WHEREAS, the Company desires to obtain the Executive's agreement to continue to
serve as [ ] of the Company and to obtain certain restrictions on the
Executive's potential competition with the Company during the term of the
Executive's employment and when and if Executive's employment with the Company
WHEREAS, the Company desires to employ the Executive in accordance with the
terms and conditions of this Agreement and Executive desires to be so employed
by the Company.
NOW, THEREFORE, in consideration of the mutual covenants and promises and other
valuable consideration, contained herein, the parties hereto hereby agree as
The Company employs the Executive to render services as [ ] of
American Physicians Capital, Inc., and the Executive accepts such
employment, in accordance with the terms, and conditions hereinafter
set forth. This Agreement supersedes and replaces in its entirety any
prior or contemporaneous employment agreements or understandings
between the Company, its present or former affiliates or subsidiaries,
and the Executive.
2. PLACE OF EMPLOYMENT.
The Executive shall be located, and shall render such services (subject
to necessary and appropriate business related travel), at the Company's
office in East Lansing, Michigan. The Company may relocate Executive,
subject to Executive's rights under Sections 6(d) involuntary
The term of the Executive's employment with the Company shall be for a
period commencing on date signed and continue, unless terminated sooner
under Section 6, for a period of one (1) year. Thereafter, the term
shall automatically be extended for one (1) additional day for each
successive day of the Executive's employment with the Company unless
replaced, or unless terminated in accordance with Section 6, below.
4. DUTIES AND RESPONSIBILITIES.
(a) At the commencement of this Agreement, the Executive is
employed by the Company in the position of [ ]. As such,
the Executive shall have duties and such authorities as are
consistent with such position subject to the direction of the
Board of Directors of American Physicians Capital, Inc.
("ACAP"), the parent company of American
Physicians Assurance Corporation. The Company may change or
amend the duties of the Executive from time to time to other
duties or positions at a comparable level. References in this
Agreement to the "Board" shall be understood as references to
the ACAP Board.
(b) The Executive will devote exclusively his or her best efforts
and full working time to the performance of the duties of the
Executive's? position and will not engage in any other
employment during the term of this agreement, except that with
the prior approval of the Board, the Executive may serve as a
compensated member of the board of directors of other, "for
profit" unaffiliated corporations.
5. COMPENSATION, INCENTIVE COMPENSATION & BENEFITS.
In consideration for the services of the Executive to be performed
hereunder, the Company shall compensate the Executive as follows:
(a) ANNUAL BASE SALARY. The Company shall pay to the Executive a
minimum annual base salary of $[ ], payable (less
applicable taxes) in accordance with Company normal payroll
practices. Under no circumstances shall the Executive's base
salary be reduced during the term of this Agreement. The
Executive's base salary shall be periodically reviewed by the
Compensation Committee of the ACAP Board and may be increased
as deemed warranted by the Compensation Committee.
(b) INCENTIVE COMPENSATION. The Executive will be eligible to
participate in any short-term incentive plan adopted for
senior executive staff. The Executive will also be eligible to
participate in long-term incentive plans available to other
senior executive employees.
(c) DISABILITY INSURANCE. During employment, the Company shall
maintain, at its expense, an individual long-term disability
insurance policy ("Policy") for the Executive providing the
Executive with benefits in the event of a disability as such
term is defined in the Policy (a "Disability"), provided the
Executive satisfies the eligibility requirements for coverage
under the disability insurance Policy which the Company has
chosen for its executive staff.
(d) PAID TIME OFF. The Executive shall be entitled to not less
than 5 weeks of paid time off, to be used for vacation and
occasional sick days, during each calendar year.
(e) OTHER EMPLOYMENT BENEFITS. During employment, the Executive
shall have the opportunity to participate in and shall be
entitled to receive benefits in accordance with the provisions
of any health, life insurance, disability, deferred
compensation, profit sharing or other employee benefit plan or
plans adopted, or to be adopted, by the Company and which are
generally applicable to other similarly situated senior
executive employees of the Company.
(f) BUSINESS EXPENSES. The Company shall pay or reimburse the
Executive promptly, upon presentation of appropriate vouchers,
for all necessary business travel and entertainment expenses
reasonably incurred by the Executive in connection with
Company business in accordance with Company policy.
Subject to the terms and conditions of this Agreement, the Company or
the Executive may terminate the Executive's employment as provided
below, and such termination shall not be deemed a breach of this
(a) DEATH OR DISABILITY. The Executive's employment shall
terminate upon the Executive's death or Disability. Disability
is defined as meeting the requirements for benefits under the
long-term Disability Insurance Policy provided by the Company
for the Executive. If the Executive qualifies or may qualify
for disability benefits under the Policy, Executive agrees to
apply for such benefits in a timely basis and submit any
necessary medical and other information. If the Executive is
not covered by the Policy or is not entitled to disability
benefits under the Policy, the Company may determine that the
Executive is disabled and terminate the Executive's employment
by treating it as an Involuntary Termination under Section
6(d) of this Agreement.
(b) CAUSE. The Company may terminate the Executive's employment
under this Agreement for Cause. The Executive shall be given
written notice of termination, specifying with particularity
the basis for termination; and the Executive shall not in such
case have to be given an opportunity to cure the basis for
such Cause. For the purposes of this Agreement, the Company
shall have Cause upon: (A) the commission by the Executive of
dishonesty, or for intentional commission of a wrongful or
illegal act, or (B) for the willful and continued breach of
this Agreement, or (C) the willful and continued failure of
the Executive to comply with the policies or procedures of the
(c) VOLUNTARY RESIGNATION. The Executive may terminate his or her
employment for any reason whatsoever.
(d) INVOLUNTARY TERMINATION. The Company may terminate the
Executive's employment at any time for any reason or no
reason. A termination under Section 6(a) or (b) will not be
considered an Involuntary Termination. For the purpose of this
Agreement, Involuntary Termination includes, but is not
limited to, the termination of this agreement by the Company,
a permanent relocation of the Executive's duties that would
require the Executive to commute a distance of more than 90
miles further from the Executive's principal place of
employment (the Executive shall have 60 days from the
notification date of relocation to accept or decline continued
employment), or the resignation of Executive within 60 days
after an act by the Company which materially reduces the
Executive's duties and responsibilities, or a reduction in the
Executive's then current annual base salary. The Executive's
duties and responsibilities shall not be deemed materially
reduced solely by virtue of a change in reporting relationship
between the Executive and the Company.
(e) CHANGE IN CONTROL. At any time within one (1) year following
the date in which a Change in Control shall have occurred, the
Board may terminate the Executive's employment for any reason
whatsoever, or the Executive may terminate his Term of
employment as set forth below.
For purposes of this Agreement, a Change in Control means any
one of the following events:
(1) The sale by American Physicians Capital, Inc.
("ACAP") of all or substantially all of its assets to
a single purchaser or group of associated purchasers;
(2) The sale, exchange or other disposition of ACAP, in
one transaction to any entity or entities not
affiliated with ACAP, of more than fifty percent
(50%) of the outstanding common stock of ACAP other
than by a sale, exchange, or disposition of the
common stock of ACAP resulting from a public or
private offering of common stock of which offering is
sponsored or initiated by ACAP and approved by its
(3) The merger or consolidation of ACAP in a transaction
in which the stockholders of ACAP receive less than
fifty percent (50%) of the outstanding voting stock
of the new or continuing entity;
(4) A change of more than 50% of the directors of the
ACAP Board within any 24-month period; except that, a
new director elected pursuant to nomination by a
majority of the directors continuing in office will
not be considered a change of a director for this
(5) At any time within one (1) year following the date on
which a Change in Control shall have occurred, the
Executive shall have the right to terminate the
Executive's employment upon written notice to the
(f) NOTICE OF TERMINATION. Any termination by the Company of the
Executive's employment pursuant to Section 6(b), (d) or (e)
must, in order to be effective, be preceded by a written
notice to the Executive ("Notice of Termination") indicating
the specific provision of this Agreement relied upon, and for
any termination under Section 6(b) setting forth in reasonable
detail the facts and circumstances supporting the termination
under the provision so indicated, and the Date of Termination.
(g) DATE OF TERMINATION. "Date of Termination" shall mean (A) if
the Executive's employment is terminated by the Executive's
death, the date of the Executive's death, or by reason of the
Executive's Disability, the date the conditions to constitute
a Disability have occurred, or if upon expiration of the Term,
the last day of the Term, (B) if the Executive's employment is
terminated by the Company pursuant to Section 6(b), 6(d) or
6(e), the date specified in the Notice of Termination, and (C)
if the Executive's employment is terminated by Executive
pursuant to Section 6(c) or 6(e) the date which is ten (10)
business days after the date of receipt of the Executive's
notice of intention to terminate or such other date as may be
agreed by the Executive and the Board.
7. COMPENSATION AND BENEFITS UPON TERMINATION.
(a) DEATH OR DISABILITY. In the event of the Executive's
termination due to the Executive's death or Disability while
actively employed, the Company shall pay or provide to the
Executive ??or the Executive's named beneficiary (in the event
of the Executive's death):
i Annual Base Salary - The Executive's earned but
unpaid base salary through the Date of Termination;
ii Bonus - A prorated portion of the Executive's annual
bonus, if any, as determined by the Board based on
the actual performance by the Company during its
fiscal year of the Executive's death or Disability.
Such determination and payment will be made at the
same time that bonus consideration and payments, if
any, for other senior executives for the same
performance period are made; and
iii Benefits - The Executive shall be paid or be provided
such other benefits for which the Executive is
entitled under the terms of any employee benefit plan
or program of the Company in which the Executive may
be, or may have been, a participant including any
earned but unpaid Paid Time Off through the Date of
(b) CAUSE. In the event the Executive is terminated for Cause, the
Executive shall receive only such benefits, if any, as may be
provided to Executive under the terms of any employee benefit,
incentive, option, stock award and other plans or programs of
the Company in which Executive may be, or may have been, a
participant and shall be paid any balance of the Executive's
earned but unpaid Annual Base Salary and any Paid Time Off for
the period through the Date of Termination.
(c) VOLUNTARY RESIGNATION. In the event the Executive voluntarily
terminates his employment while actively employed, or breaches
this agreement following termination, the Company shall pay or
provide to the Executive only such benefits, if any, as may be
provided to him under the terms of any employee benefit plans
or programs of the Company in which the Executive may be, or
may have been, a participant, and shall be paid any balance of
the Executive's earned but unpaid Annual Base Salary and
accrued but unpaid Paid Time Off through the Date of
(d) INVOLUNTARY TERMINATION/CHANGE OF CONTROL. In the event the
Executive's employment is involuntarily terminated under
Section 6(d) or Section 6(e), the Company shall pay or provide
to the Executive, subject to the Executive signing and
delivering to the Company a release and separation agreement
reasonably acceptable to the Company:
i. Severance Pay - The Executive shall receive a
lump-sum severance payment equal to 24 months of the
Executive's then current base salary. Within 7 days
of the Date of Termination, the Company shall submit
to the Executive a release and separation agreement
which is consistent with the terms of this Agreement.
The severance payment under this subsection will be
paid to Executive within 7 days after the release and
separation agreement become final and binding; and
ii. Bonus - The Executive shall receive one and one-half
times the greater of: the full year annual
performance bonus at 100% target for the calendar
year in which severance occurs, or the average of
last 2 performance bonuses paid to the Executive.
Such payment will be made within 7 days after the
release and separation agreement become final and
iii. Medical & Dental - The Executive shall, upon
finalization of the agreement and release, receive a
lump-sum payment in the amount of eighteen (18) times
the then current monthly premiums for the Executive's
medical and dental insurance. All other welfare and
insurance benefits shall cease as of the Date of
iv. Benefit Payment - The Executive shall, upon
finalization of the agreement and release, receive a
lump-sum payment of $4,000 to be applied toward the
purchase of individual disability, life or any other
insurances or coverages that terminated upon the
Executive's Date of Termination; and
v. Long-Term Incentive - The Executive shall receive all
awards made to the Executive under long-term
incentive plans or programs, pursuant to and subject
to the terms set forth in the incentive plans; and
vi. 401(k) Pension and Supplemental Benefits - The
Executive shall be paid or be provided such other
benefits for which the Executive is entitled under
the terms of any employee benefit plan or program of
the Company in which the Executive may be, or may
have been, a participant including any earned but
unpaid Paid Time Off through the Date of Termination;
vii. The Company shall reimburse the Executive for
reasonable attorney fees incurred by the Executive in
connection with the enforcement of this Section 7(d).
8. REDUCTION OF PAYMENTS.
Notwithstanding any other provision of this Agreement or of any other
agreement, understanding or compensation plan, the Company shall not
pay, and the Executive shall not receive, any payment which, taking
into account all payments, rights, and benefits whether or not under
this Agreement, would be deemed to be an "excess parachute payment"
under Section 280G of the Internal Revenue Code of 1986, as amended,
and the amount of payment hereunder shall be reduced to the extent
necessary to ensure that the Executive receives no "parachute payment"
in connection with such Change in Control if, as determined by the
Company, the reduction would be beneficial to the Executive.
9. SUCCESSORS AND ASSIGNS.
This Agreement shall not be terminated by voluntary or involuntary
dissolution of the Company or by the merger or consolidation where the
Company is not the surviving or resulting corporation. This Agreement
is binding upon and will be enforceable by the Company and by its
successors and by the assignees of all or substantially all of its
business, and by any other corporation into which the Company may be
merged or consolidated. Upon assignment of this Agreement by Company,
the provisions of this Agreement, including but not limited to the
provisions of Section 12, will be enforceable by the company receiving
10. NON-ASSIGNABILITY BY EXECUTIVE.
The obligations of the Executive hereunder may not be assigned or
transferred by the Executive in any manner whatsoever, nor are such
obligations subject to involuntary alienation, assignment or transfer.
11. RELATED COMPANIES.
Notwithstanding Section 9, above, the Company may assign the Executive
to perform services for other companies that are under common ownership
or control with the Company, and may assign this Agreement to other
companies that are under common ownership or control with the Company.
Such assignment may be made without the Executive's consent.
12. PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE SECRETS; COMPANY
BUSINESS ASSETS; NON-COMPETE AND NON-SOLICITATION.
(a) CONFIDENTIAL INFORMATION AND TRADE SECRETS. The Executive
acknowledges that he or she will be working with or exposed to
confidential information and trade secrets, which are the
property of the Company and/or its affiliates. Such
information includes, but is not limited to: client lists and
information; medical data; financial data; sales data;
marketing data; policyholder data; claims data; personnel
information; business files; contracts; documents; business
strategies; business opportunities; any and all information
pertaining to potential or actual corporate acquisitions,
mergers, consolidations, conversions, joint ventures, or other
similar agreements; computer software, software codes, and
software documentation, and other documents or information
deemed confidential by the Company and so designated to the
Executive. During and after employment with the Company, the
Executive agrees not to share such information with any person
outside of the Company, except upon prior written
authorization from the Company following notice to and
approval by its Board.
(b) COMPANY BUSINESS ASSETS. The Parties agree that the business
assets of the Company include information regarding Company
clients, and relationships with Company clients, and
confidential information and trade secrets of the Company,
including those items listed in Section 12 (a) above. The
Executive also agrees that the work product of the Executive
produced in the course of employment with Company will be the
property of Company and/or its affiliates. The Executive
agrees that the Company and/or its affiliates shall own the
copyright, patent, and other property rights in such work
product, and that this work product will be work made for hire
for copyright purposes. Upon termination of employment, the
Executive shall deliver to the Company all work product, and
all confidential information and trade secrets, including but
not limited to the items listed in Section 12 (a), and the
Executive shall not retain any copies. If there is any breach
or threatened breach by the Executive of the provisions of
this Section or Section 12 (a), the Company shall be entitled
to injunctive relief against the Executive or those persons or
entities with whom the Executive is then affiliated, and to
reasonable damages, including reasonable attorneys' fees. Such
reasonable damages shall include at a minimum but not
exclusively the amount of any benefit that the Executive would
receive from disclosing or using the information.
(c) NON-SOLICITATION. The Executive agrees that for a period of
one (1) year after termination of employment with the Company,
the Executive will not directly or indirectly solicit business
from or sell any service or product to any clients of the
Company or clients of any subsidiary or affiliate of the
Company for any types of insurance or other services or
products which are offered by or through the Company or its
affiliates. Clients include current insureds and any persons
or entity insured or serviced for a fee by the Company or its
affiliates during the one-year period preceding termination of
the Executive's employment. The Executive also expressly
agrees that for a period of two (2) years after termination of
employment with the Company, the Executive will not directly
or indirectly induce, attempt to induce, or enable or support
the inducement of any employee to depart from or cease
employment with the Company or its affiliates, nor will the
Executive interfere with or disrupt the Company's or its
affiliates' relationships with other employees. If there is
any breach or threatened breach of this Section, the Company
and its affiliates shall be entitled to injunctive relief
against the Executive or those persons or entities with whom
the Executive is then affiliated, and reasonable damages,
including reasonable attorneys' fees.
(d) NON-COMPETE. Executive agrees that for a period of one (1)
year after termination of employment, Executive will not
directly or indirectly accept a position with or provide any
managerial or executive services to any business entity which
competes with Company or Company's affiliates in their core
lines of business, including but not limited to professional
liability insurance in any states where Company or its
affiliates are doing business in the United States at the time
of termination. This non-compete provision applies to
providing services to a competitor in any capacity, directly
or indirectly, including as an employee, consultant, owner,
partner, shareholder (other than a minority shareholder in a
publicly traded corporation), and also applies to aiding or
assisting any other person or entity in providing such
services. Provided that, the Board or CEO of ACAP may give
prior written consent to the Executive accepting a position
which would otherwise be in violation of this non-compete
provision. If there is any breach or threatened breach of this
section, the Company and its affiliates shall be entitled to
injunctive relief against the Executive and those entities
with whom Executive is then affiliated, and reasonable
damages, including reasonable attorneys' fees.
(e) RETURN OF COMPANY PROPERTY. Immediately upon the termination
of the Executive's employment with the Company and at any time
upon the Company's request, the Executive shall deliver to the
Company all the Company property in the Executive's
possession, custody or control including notebooks, reports,
manuals, programming data, listings and materials, engineering
or patent drawings, patent applications, any other documents,
files or materials which contain, mention or relate to
Confidential Information, and all copies and summaries of such
materials whether in written, mechanical, electromagnetic,
analog, digital or any other format or medium.
(f) CONSENT TO MODIFICATION BY THE COURTS. It is the express
intention of the parties to this Agreement that, if it should
appear that any of the terms or covenants of this section are
in conflict with any rule of law or statutory provision of the
State of Michigan or any other jurisdiction where this
Agreement is being enforced, which conflict would ordinarily
render such terms or covenants inoperative or null and void,
the parties request that the Courts of such state modify any
such term or covenant so that the intention of the parties
hereto is carried out to as great a degree and extent as the
Court deems reasonable in order to conform with any rule of
law or statutory provision regarding restrictive covenants of
the State of Michigan or of such other jurisdiction.
13. ARBITRATION OF DISPUTES.
The Executive and the Company agree that any controversy or claim
arising out of or relating to this Agreement, the breach thereof, or
the coverage of this arbitration provision shall be settled by
arbitration, rather than by litigation, administered by the American
Arbitration Association in accordance with the National Rules for the
Resolution of Employment Disputes in effect on the date of delivery of
demand for arbitration. The Executive waives the right to submit any
discrimination claims or other employment-related claims in a court
proceeding, and elects instead to submit any such claims to
arbitration. This Agreement to resolve disputes through arbitration is
not a waiver of any of the Executive's substantive rights or remedies
under law, and the arbitrator shall have the authority to grant any
remedy or relief that could be granted in a court proceeding. The
arbitration of such issues, including the determination of the amount
of any damages suffered
by either party hereto by reason of the acts or omissions of the other,
shall be to the exclusion of any court. The decision of the arbitrators
shall be final and binding on the parties and their respective heirs,
executors, administrators, successors and assignees. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction. There shall be three arbitrators, one to be chosen
directly by each party and the third arbitrator to be selected by the
two arbitrators so chosen. The arbitration shall be conducted in
Michigan or at such other location as agreed by the parties. All
decisions and awards shall be made by a majority of the arbitrators.
Each party shall pay the fees and expenses of that party's arbitrator
and any representatives, witnesses and all other expenses related to
the presentation of that party's case. The cost of the third
arbitrator, the record or any transcripts, any administrative fees, and
all other fees and costs shall be borne equally by the parties. The
arbitrators shall have the authority to award reimbursement of
reasonable attorneys' fees and other fees and expenses as part of the
remedy, in accordance with applicable law.
By agreeing to arbitration under this Section, the Company and the
Executive understand that they are each waiving any right to a trial by
jury and each party makes that waiver knowingly and voluntarily with
full consideration of the ramifications of such waiver.
Nothing contained herein shall be construed or interpreted to preclude
the Company prior to, or pending the resolution of, any matter subject
to arbitration from seeking injunctive relief in any court for any
breach or threatened breach of any of the Executive's obligations in
Section 12 hereof.
14. RESOLUTION OF DISPUTES.
The parties agree that this Agreement will be governed by and
interpreted in accordance with the laws of the State of Michigan,
without application of choice of law rules.
15. RIGHT TO INJUNCTIVE AND OTHER RELIEF; CONSENT TO JURISDICTION.
(a) The Executive acknowledges that the Company will suffer
irreparable harm, not readily susceptible of valuation in
monetary damages, if the Executive breaches any of his
obligations in Section 12 of this Agreement. Accordingly, the
Executive agrees that the Company shall be entitled to
injunctive relief against any breach or prospective breach by
the Executive of his obligations in Section 12 in any federal
or state court of competent jurisdiction, and the Executive
hereby submits to the jurisdiction of any such federal or
state court in the State of Michigan for the purposes of any
actions or proceedings instituted by the Company to obtain
such injunctive relief. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies
available to the Company for such breach or threatened breach,
including the recovery of damages from the Executive,
(b) In addition to the rights set forth in subsection (a), above,
if Executive breaches any of Executive's obligations under
Section 12 the Company shall be entitled to cease making
further payments to the Executive pursuant to clauses (i)
through (iv) of Section 7 (d), as well as pursuant to clause
(v) of Section 7 (d); and to terminate Executive's rights of
participation under clause (v) of Section 7 (d),
(c) This section shall survive the termination of the Executive's
16. ENTIRE AGREEMENT.
This written Agreement sets forth the entire Employment Agreement
between the parties, and it supersedes all prior negotiations,
employment interviews, communications, and understandings between the
Parties whether written or oral. There are no other Employment
Agreements between the Parties.
This Agreement may not be changed orally but only by a written
agreement that expressly references this Agreement, signed by the
Executive and the Company's Chief Executive Officer, and approved by
its Board of Directors.
The various Sections of this Agreement are severable. If any Section or
an identifiable part thereof is held to be invalid or unenforceable by
any court of competent jurisdiction, then such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining Sections or identifiable parts thereof in this Agreement. The
parties hereto agree that the portion so held invalid, unenforceable or
void shall, if possible, be deemed amended or reduced in scope, or
otherwise be stricken from this Agreement, to the extent required for
the purposes of the validity and enforcement hereof.
The Executive may select (and change, to the extent permitted under any
applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable under this Agreement following the
Executive's death or disability, and may change such election by giving
the Company written notice thereof. In the event of the Executive's
death, Disability or a judicial determination of the Executive's
incompetence, all references in this Agreement to the Executive shall
be deemed, where appropriate, to refer to the Executive's named
beneficiary, estate or other legal representative.
All notices which a party is required or may desire to give to the
other party under or in connection with this Agreement shall be
sufficient if given by hand delivery or by addressing same to the other
party as follows: (a) if to the Executive, to: the last known address
of record with the Company, or (b) if to the Company, to: Attn:
Secretary, American Physicians Assurance Corporation, 1301 North
Hagadorn Road, East Lansing, MI 48823; or at such other place as may be
designated in writing by like notice. Any notice shall be deemed to
have been delivered when addressed as required herein and deposited
postage prepaid, in the United States Mail.
21. ACTION OF THE BOARD
Any reference in this Agreement to the Board shall include the Board,
the Compensation Committee thereof and any officers of the Company to
which the Board or the Compensation Committee thereof has by resolution
delegated any explicit authority or responsibilities with respect to
22. TAX WITHHOLDINGS
All payments to the Executive hereunder shall be subject to such
withholding of federal, state and local income and excise taxes and to
such employment taxes as may be reasonably determined by the Company to
23. SURVIVAL AND CONTINUATION OF AGREEMENT PROVISIONS.
The termination of the Executive's employment for any reason whatsoever
shall not operate to terminate this Agreement or otherwise adversely
affect the respective continuing rights and obligations of the parties,
including but not limited to, those under Sections 5(b), 7, 8, 9, 12,
13, 15 and 20 of this Agreement, all of which shall survive the
effective date of such termination of employment in accordance with
their respective terms.
EXECUTIVE AMERICAN PHYSICIANS ASSURANCE CORPORATION
AMERICAN PHYSICIANS CAPITAL, INC.
In 2005, the Company entered into new Executive Employment Agreements with three
(3) officers. Except as set forth below, the three (3) Executive Employment
Agreements are substantially similar in all material respects to the form of
Executive Employment Agreement filed as an Exhibit and, therefore, the specific
Executive Employment Agreements for the each of the officers listed below have
OFFICER TITLE SALARY SUBJECT TO THE DIRECTION OF DATE SIGNED
------------------------- ----------------------- ------------- ----------------------------------- -------------------
<S> <C> <C> <C> <C>
R. Kevin Clinton President and Chief $437,000 Board of Directors of APCapital February 23, 2005
Frank H. Freund Executive Vice $300,000 President and Chief Executive February 23, 2005
President, Treasurer, Officer and Board of Directors of
and Chief Financial APCapital
Annette E. Flood Chief Operating $200,000 President and Chief Executive February 23, 2005
Officer (American Officer and Board of Directors of
FORM OF AMENDMENT NO.1 TO FORM OF EXECUTIVE EMPLOYMENT AGREEMENT
AMENDMENT NO. 1 TO
AMERICAN PHYSICIANS ASSURANCE CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDMENT, dated October 24, 2007, amends the Employment Agreement between American Physicians Assurance Company (the “Company”) and [ ] (the “Executive”) dated as of [ ] (the “Employment Agreement”).
WHEREAS, certain of the compensation payable under the Employment Agreement is subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); and
WHEREAS, the Company and the Executive desire to clarify the application of Code Section 409A to the Employment Agreement, effective as of January 1, 2007; and
WHEREAS, prior to January 1, 2007, the Employment Agreement was administered in good faith compliance with Code Section 409A based on IRS guidance in effect during such time-period.
NOW THEREFORE, the Employment Agreement is amended as set forth below.
Section 5(f) “BUSINESS EXPENSES” is amended with the addition of the following sentence at the end of the paragraph:
Business expenses shall be submitted to the Company and paid no later than the end of the calendar year in which they are incurred.
The introductory paragraph in 7(d) “INVOLUNTARY TERMINATION/ CHANGES OF CONTROL” is amended and restated in its entirety to read as follows:
INVOLUNTARY TERMINATION/CHANGE OF CONTROL. In the event the Executive’s employment is involuntarily terminated under Section 6(d) or 6(c), the Company shall pay or provide to the Executive, subject to the Executive signing and delivering to the Company a release and separation agreement reasonably acceptable to the Company, which shall become final and binding no later than 30 days following the Date of Termination.
Section 7(d)(vii) relating to attorney fees is amended with the addition of the following sentence at the end of the paragraph:
The reimbursement of attorney fees shall occur no later than the end of the calendar year following the calendar year in which the attorney fees are incurred.
Section 7(d) (viii) “Specified Employee Delay in Payments” is added to the Employment Agreement to read as follows:
Specified Employee Delay in Payments – If the Executive is a “Specified Employee” as defined in Treasury Regulation 1.409A-1(i) at the time of termination of employment, and the application of Code Section 409A would require compensation under the Employment Agreement that normally would be payable to the Executive during the first six months after termination of employment to be delayed, any delayed payments shall be aggregated and paid to the Executive in a lump sum on the first business day after the lapse of six months following the Executive’s termination of employment.
IN WITNESS WHEREOF, American Physicians Capital, Inc. has caused this AMENDMENT No. 1 to be executed on this the 25th day of October, 2007.
AMERICAN PHYSICIANS CAPITAL, INC.