Exhibit 10.59**EMPLOYMENT AGREEMENT**     AGREEMENT, is made effective January 1, 2008 (the “Effective Date’) and entered into as of the10th day of January, 2008 by and between NYMAGIC, INC., a New York corporation (togetherwith its successors and assigns, the “Company”), and George R. Trumbull, III (the “Executive”).WITNESSETH:     WHEREAS, the Company desires to continue to employ the Executive pursuant to an agreementembodying the terms of such employment (this “Agreement”) and the Executive desires to enter intothis Agreement and to accept such employment, subject to the terms and provisions of thisAgreement.     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and forother good and valuable consideration, the receipt of which is mutually acknowledged, the Companyand the Executive (individually a “Party” and together the “Parties”) agree as follows:     1. Term of Employment.          The term of the Executive’s employment under this Agreement shall commence on the EffectiveDate and end on December 31, 2008 (the “Term of Employment”), unless terminated earlier inaccordance herewith.     2. Position, Duties and Responsibilities.          (a) Generally. The Executive shall serve as Chairman of the Board of Directors (the“Board”) of the Company. For so long as he is serving on the Board, the Executive agrees to serveas a member of any committee of the Board to which he is elected. In any and all such capacities,the Executive shall report only to the Board. The Executive shall have and perform such duties,responsibilities, and authorities as are customary for the Chairman of corporations of similar sizeand businesses as the Company as they may exist from time to time and as are consistent with suchposition and status. The Executive shall devote approximately twenty (20) hours per week and hisbest efforts, abilities, experience, and talent to the position of Chairman of the Company. In theevent of termination of the Executive’s employment under this Agreement, the Executive’s membershipon the Board and any committees thereof shall also be terminated effective on the date oftermination of Executive’s employment.          (b) Other Activities. Anything herein to the contrary notwithstanding, nothing inthis Agreement shall preclude the Executive from (i) serving on the boards of directors of areasonable number of other corporations or the boards of a reasonable number of trade
 

 
associations and/or charitable organizations, (ii) engaging in charitable activities andcommunity affairs, (iii) managing his personal investments and affairs, provided that suchactivities do not materially interfere with the proper performance of his duties andresponsibilities under this Agreement and (iv) performing consulting services for MarinerPartners, Inc. , or any of its successors, affiliates, stockholders or members (collectively,“Mariner”).          (c) Place of Employment. The Executive’s principal place of employment shall be theCompany’s principal corporate office.     3. Base Salary.          The Executive shall be paid an annualized salary, payable in accordance with the regularpayroll practices of the Company, of $250,000 (“Base Salary”).     4. Annual Incentive Awards.          The Executive shall participate in the Company’s annual incentive compensation plan with atarget Annual Incentive Award opportunity of 50% of Base Salary and a maximum Annual IncentiveAward opportunity of 100% of Base Salary (the “Annual Incentive Award”). Payment of theExecutive’s Annual Incentive Award shall be made within 2 months of the Company’s fiscal year-end.     5. Long-Term Incentive Program.          (a) Grant of Restricted Shares. On the date of the execution of this Agreement theExecutive shall be granted 5,000 Restricted Shares under the LTIP, which shall vest on December 31,2007, contingent upon the Executive’s continued employment with the Company on that date (the“Restricted Share Grant”).     6. Employee Benefit Programs.          (a) General Benefits. During the Term of Employment as Chairman, the Executive shallbe entitled to participate in such employee benefit plans and programs of the Company as are madeavailable to the Company’s senior level executives or to its employees generally, as such plans orprograms may be in effect from time to time, including, without limitation, health, medical,dental, long-term disability, travel accident and life insurance plans.          (b) Deferral of Compensation. The Executive shall be permitted to elect to deferreceipt, 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 ofhis annual incentive compensation under Section 4 and his long term incentive compensation underSection 5; provided, however, that such deferrals shall not reduce the Executive’s total cashcompensation in any calendar year below the sum of (i) the FICA maximum taxable wage base plus (ii)the amount needed, on an after-tax basis, to enable the
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Executive to pay the 1.45% Medicare tax imposed on his wages in excess of such FICA maximum taxablewage base.          The Company and the Executive agree that compensation deferred pursuant to this Section 6(b)shall be fully vested and nonforfeitable; however, the Executive acknowledges that his rights tothe deferred compensation provided for in this Section 6(b) shall be no greater than those of ageneral 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 theExecutive, or be assignable or transferable by the Executive, otherwise than by will or the laws ofdescent and distribution, provided that the Executive may designate one or more beneficiaries toreceive any payment of such amounts in the event of his death.     7. Disability.          (a) During the Term of Employment, the Executive shall be entitled to disability coverage asdescribed in this Section 7(a). In the event the Executive becomes disabled, as that term isdefined under the Company’s Long-Term Disability Plan, the Executive shall be entitled to receivepursuant to the Company’s Long-Term Disability Plan or otherwise, and in place of his Base Salary,an amount equal to 60% (or at the rate then applicable) of his Base Salary, at the annual rate ineffect on the commencement date of his eligibility for the Company’s long-term disability benefits(“Commencement Date”) for a period beginning on the Commencement Date and ending with theExecutive’s attainment of age 65. If (i) the Executive ceases to be disabled during the Term ofEmployment (as determined in accordance with the terms of the Long-Term Disability Plan), (ii) theposition set forth in Section 2(a) are then vacant and (iii) the Company requests in writing thathe resume such position, he may elect to resume such position by written notice to the Companywithin 15 days after the Company delivers its request. If he resumes such position, he shallthereafter be entitled to his Base Salary at the annual rate in effect on the Commencement Dateand, for the year he resumes his position, a pro rata Annual Incentive Award at 75% of Base Salaryfor such year. If he ceases to be disabled during the Term of Employment and does not resume hisposition in accordance with the preceding sentence, he shall be treated as if he voluntarilyterminated his employment pursuant to Section 9(e) as of the date the Executive ceases to bedisabled. If the Executive is not offered such position after he ceases to be disabled during theTerm of Employment, he shall be treated as if his employment was terminated Without Cause pursuantto Section 9(c) as of the date the Executive ceases to be disabled.          (b) The Executive shall be entitled to a pro rata Annual Incentive Award at 75% of Base Salaryfor the year in which the Commencement Date occurs, payable in accordance with the terms of theannual incentive compensation plan and at the time set forth in Section 4 hereof. The Executiveshall not be entitled to any Annual Incentive Award with respect to the period following theCommencement Date. If the Executive recommences his position in accordance with Section 7(a), heshall be entitled to a pro rata Annual Incentive Award at 75% of Base Salary for the year heresumes such position and shall thereafter be entitled to Annual Incentive Awards in accordancewith Section 4 hereof.
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          (c) During the period the Executive is receiving disability benefits pursuant to Section 7(a)above, he shall continue to be treated as an employee for purposes of all employee benefits andentitlements in which he was participating on the Commencement Date, including without limitation,the benefits and entitlements referred to in Section 5 and 6 above, except that the Executive shallnot be entitled to receive any annual salary increases or any new long-term incentive plan grantsor elect to defer compensation following the Commencement Date.     8. Reimbursement of Business and Other Expenses: Perquisites.          (a) The Executive is authorized to incur reasonable expenses in carrying out his duties andresponsibilities under this Agreement, and the Company shall promptly reimburse him on a monthlybasis for all such business expenses incurred in connection therewith in the prior month, subjectto documentation in accordance with the Company’s policy.     9. Termination of Employment*.*          (a) Termination Due to Death or Disability. The Term of Employment shall beterminated immediately upon the death or disability (as such term is defined under the Company’sLong-Term Disability Plan) of the Executive. In the event the Executive’s employment with theCompany is terminated due to his death or disability, the Executive, his estate or hisbeneficiaries, as the case may be, shall be entitled to and their sole remedies under thisAgreement shall be: (i) Base Salary through the date of death or the CommencementDate, as the case may be, which shall be paid in a single lump sum 15 daysfollowing the Executive’s death or the Commencement Date, as the case maybe;  (ii) pro rata Annual Incentive Award at 75% of Base Salary forthe year in which the Executive’s death, or the Commencement Date, as thecase may be, occurs, which shall be payable in a lump sum 30 days after hisdeath or on the first day following the six-month anniversary of theExecutive’s termination of employment by reason of disability;  (iii) elimination of all restrictions on any Restricted ShareGrants or deferred stock awards outstanding at the time of his death, or theCommencement Date, as the case may be;  (iv) immediate vesting of all outstanding stock options andthe right to exercise such stock options as is provided in any stock optionaward agreement to which the Executive is a party;
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 (v) the balance of any Annual Incentive Awards earned as ofDecember 31 of the prior year (but not yet paid), which shall be paid in asingle lump sum and in accordance with the terms of such awards;  (vi) settlement of all deferred compensation arrangements inaccordance with the Executive’s duly executed Deferral Election Forms; and  (vii) other or additional benefits then due or earned, payablein accordance with applicable plans and programs of the Company.          (b) Termination by the Company for Cause. (i) The Term of Employment may be terminated by the Companyfor Cause. “Cause” shall mean: (A) The Executive’s willful and material breachof Sections 10, 11 or 12 of this Agreement;  (B) The Executive is convicted of a felony orpleads guilty or nolo contendre to an offense that is a felony in thejurisdiction where committed;  (C) The Executive engages in conduct thatconstitutes willful gross neglect or willful gross misconduct incarrying out his duties under this Agreement, resulting, in eithercase, in material harm to the financial condition or reputation ofthe Company;  (D) The Executive’s failure to cooperate, ifrequested by the Board, with any investigation or inquiry into his orthe Company’s business practices, whether internal or external,including, but not limited to the Executive’s refusal to be deposedor to provide testimony at any trial or inquiry;  (E) The Executive’s substantial and continuedrefusal to perform his duties;  (F) The Executive’s violation of a materialCompany Policy; and,  (G) The Executive engages in any act or seriesof acts that constitute misconduct requiring a restatement of the
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   Company’s financial statements pursuant to the Sarbanes-Oxley Act of 2002.For purposes of this Agreement, an act or failure to act on the Executive’s part shall beconsidered “willful” if it was done or omitted to be done by him not in good faith, and shall notinclude any act or failure to act resulting from any incapacity of the Executive. (ii) A termination for Cause shall not take effect unless theprovisions of this paragraph (ii) are complied with. The Executive shall begiven written notice by the Company of its intention to terminate him forCause, such notice (A) to state in detail the particular act or acts orfailure or failures to act that constitute the grounds on which the proposedtermination for Cause is based and (B) to be given within 90 days of theCompany’s learning of such act or acts or failure or failures to act. TheExecutive shall have 20 days after the date that such written notice hasbeen given to him in which to cure such conduct, to the extent such cure ispossible. If he fails to cure such conduct, the Executive shall then beentitled to a hearing before the Board at which the Executive is entitled toappear. Such hearing shall be held within 25 days of such notice to theExecutive, provided he requests such hearing within 10 days of the writtennotice from the Company of the intention to terminate him for Cause. If,within five days following such hearing, the Executive is furnished writtennotice by the Board confirming that, in its judgment, grounds for Cause onthe basis of the original notice exist, he shall thereupon be terminated forCause.  (iii) In the event the Company terminates the Executive’semployment for Cause, he shall be entitled to and his sole remedies underthis Agreement shall be: (A) Base Salary through the date of thetermination of his employment for Cause, which shall be paid in asingle lump sum 15 days following the Executive’s termination ofemployment;  (B) any Annual Incentive Awards earned as ofDecember 31 of the prior year (but not yet paid), which shall be paidin a single lump and in accordance with the terms of such awards;  (C) settlement of all deferred compensationarrangements in accordance with the Executive’s duly executedDeferral Election Forms; and
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 (D) other or additional benefits then due orearned, payable in accordance with applicable plans or programs ofthe Company.          (c) Termination Without Cause or Constructive Termination Without Cause. Prior to a Changein Control. In the event the Executive’s employment with the Company is terminated withoutCause (which termination shall be effective as of the date specified by the Company in a writtennotice to the Executive), other than due to death, or disability, or in the event there is aConstructive Termination Without Cause (as defined below), in either case prior to a Change inControl (as defined below) the Executive shall be entitled to and his sole remedies under thisAgreement shall be: (i) Base Salary through the date of termination of theExecutive’s employment, which shall be paid in a single lump sum 15 daysfollowing the Executive’s termination of employment;  (ii) Base Salary, at the annualized rate in effect on the dateof termination of the Executive’s employment (or in the event a reduction inBase Salary is a basis for a Constructive Termination Without Cause, thenthe Base Salary in effect immediately prior to such reduction), continuedfor a period of 12 months following such termination payable in 12 equalmonthly installments beginning on the first day following the six monthanniversary after the date of the Executive’s termination of employment (the12 month period following termination of employment is referred to as the“Severance Period”);  (iii) pro rata Annual Incentive Award at 75% of Base Salaryfor the year in which termination occurs, payable in a lump sum payable onthe first day following the six-month anniversary after the date of theExecutive’s termination of employment;  (iv) elimination of all restrictions on any Restricted ShareGrants or deferred stock awards outstanding at the time of termination ofemployment;  (v) any outstanding stock options, which are unvested, shallvest and the Executive shall have the right to exercise any vested stockoptions as provided in any stock option award agreement to which theExecutive is a party;  (vi) the balance of any Annual Incentive Awards earned as ofDecember 31 of the prior year (but not yet paid), which shall be paid in asingle lump sum and in accordance with the terms of such awards;
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 (vii) settlement of all deferred compensation arrangements inaccordance with the Executive’s duly executed Deferral Election Forms;  (viii) continued participation in all medical, health and life insurance plans atthe same benefit level at which he was participating on the date of thetermination of his employment until the earlier of: (A) the expiration of the Severance Period; or  (B) the date, or dates, he receives equivalentcoverage and benefits under the plans and programs of a subsequentemployer;   provided, however, to the extent that any such benefits cannot be providedon a non-taxable basis to the Executive and the provision thereof wouldcause any part of the benefits to be subject to additional taxes andinterest under Section 409A of the Code, then the provision of suchbenefits shall be deferred to the earliest date upon which such benefitscan be provided without being subject to such additional taxes andinterest; and,  (x) other or additional benefits then due or earned, payablein accordance with applicable plans and programs of the Company.          A termination without “Cause” shall mean the Executive’s employment is terminated by theCompany for any reason other than Cause (as defined in Section 9(b)) or due to death ordisability.          “Constructive Termination Without Cause” shall mean a termination of the Executive’semployment at his initiative as provided in this Section 9(c) following the occurrence, withoutthe Executive’s written consent, of one or more of the following events (except as a result of aprior termination): (A) a removal of the Executive from or anyfailure to elect or re-elect or, as the case may be, nominate theExecutive as a member of the Board;  (B) an assignment of any duties to theExecutive which are inconsistent with his status as Chairman of theCompany;  (C) a decrease in annual Base Salary ortarget Annual Incentive Award opportunity;
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 (D) any other failure by the Company toperform any material obligation under, or breach by the Company ofany material provision of, this Agreement that is not cured within30 days after receipt by the Company of written notice thereof fromthe Executive; or  (E) a relocation of the corporate offices ofthe Company outside a 35-mile radius of New York, New York, orHartford Connecticut.     Notwithstanding anything to contrary contained in this Agreement, a Constructive TerminationWithout Cause shall not have occurred if the occurrence of an event which would otherwiseconstitute Constructive Termination Without Cause under this Agreement arises out of or inconnection with any transaction between the Company and Mariner.          (d) Termination Upon a Change of Control. The Term of Employment shall be terminatedimmediately upon a Change of Control (as defined below). In the event the Executive’s employmentwith the Company is terminated due to a Change of Control, the Executive shall be entitled to andhis sole remedies under this Agreement shall be: (i) Base Salary through the date of the Change of Control,which shall be paid in a single lump sum 15 days following the date of theExecutive’s termination of employment;  (ii) pro rata Annual Incentive Award at 75% of Base Salary forthe year in which the Change of Control occurs, which shall be payable in alump sum on the first day following the six month anniversary of theExecutive’s termination of employment;  (iii) elimination of all restrictions on any Restricted ShareGrants or deferred stock awards outstanding on the date of the Change ofControl;  (iv) immediate vesting of all outstanding stock options andthe right to exercise such stock options as provided in any stock optionaward agreement to which the Executive is a party;  (v) the balance of any Annual Incentive Awards earned as ofDecember 31 of the prior year (but not yet paid), which shall be paid in asingle lump sum and in accordance with the terms of such awards;  (vi) settlement of all deferred compensation arrangements inaccordance with the Executive’s duly executed Deferral Election Forms; and
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 (vii) other or additional benefits then due or earned, payablein accordance with applicable plans and programs of the Company.A “Change in Control” shall be deemed to have occurred if: (i) any Person (other than the Company, any trustee or otherfiduciary holding securities under any employee benefit plan of the Company,or any company owned, directly or indirectly, by the stockholders of theCompany immediately prior to the occurrence with respect to which theevaluation is being made in substantially the same proportions as theirownership of the common stock of the Company) becomes the Beneficial Owner(except that a Person shall be deemed to be the Beneficial Owner of allshares that any such Person has the right to acquire pursuant to anyagreement or arrangement or upon exercise of conversion rights, warrants oroptions or otherwise, without regard to the sixty day period referred to inRule 13d-3 under the Exchange Act), directly or indirectly, of securities ofthe Company or any Significant Subsidiary (as defined below), representing50% or more of the combined voting power of the Company’s or suchsubsidiary’s then outstanding securities;  (ii) during any period of two consecutive years, individualswho at the beginning of such period constitute the Board, and any newdirector (other than a director designated by a person who has entered intoan agreement with the Company to effect a transaction described in clause(i), (iii), or (iv) of this paragraph) whose election by the Board ornomination for election by the Company’s stockholders was approved by a voteof at least two-thirds of the directors then still in office who either weredirectors at the beginning of the two-year period or whose election ornomination for election was previously so approved but excluding for thispurpose any such new director whose initial assumption of office occurs as aresult of either an actual or threatened election contest (as such terms areused in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) orother actual or threatened solicitation of proxies or consents by or onbehalf of an individual, corporation, partnership, group, associate or otherentity or Person other than the Board, cease for any reason to constitute atleast a majority of the Board;  (iii) the consummation of a merger or consolidation of theCompany or any subsidiary owning directly or indirectly all or substantiallyall of the consolidated assets of the Company (a “Significant Subsidiary”)with any other entity, other than a merger or consolidation which wouldresult in the voting securities of the
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   Company or a Significant Subsidiary outstanding immediately priorthereto continuing to represent (either by remaining outstanding or bybeing converted into voting securities of the surviving or resultingentity) more than 50% of the combined voting power of the surviving orresulting entity outstanding immediately after such merger orconsolidation;  (iv) the consummation of a plan or agreement for the sale ordisposition of all or substantially all of the consolidated assets of theCompany (other than such a sale or disposition immediately after which suchassets will be owned directly or indirectly by the stockholders of theCompany in substantially the same proportions as their ownership of thecommon stock of the Company immediately prior to such sale or disposition)in which case the Board shall determine the effective date of the Change inControl resulting therefrom; or  (v) any other event occurs which the Board determines, in itsdiscretion, would materially alter the structure of the Company or itsownership.     For purposes of this definition: (A) The term “Beneficial Owner” shall have themeaning ascribed to such term in Rule 13d-3 under the Exchange Act(including any successor to such Rule).  (B) The term “Exchange Act” means theSecurities Exchange Act of 1934, as amended from time to time, or anysuccessor act thereto.  (C) The term “Person” shall have the meaningascribed to such term in Section 3(a)(9) of the Exchange Act and usedin Sections 13(d) and 14(d) thereof, including “group” as defined inSection 14(d) thereof.     Notwithstanding anything to contrary contained in this Agreement, a Change in Control shallnot have occurred if the occurrence of an event which would otherwise constitute a Change inControl under this Agreement arises out of or in connection with any transaction between theCompany and Mariner.          (e) Voluntary Termination. In the event of a termination of employment by theExecutive on his own initiative after delivery of 10 business days advance written notice, otherthan a termination due to death, disability or a Constructive Termination Without Cause, theExecutive shall have the same entitlements as provided in Section 9(b)(iii) above for a terminationfor Cause. Notwithstanding any implication to the contrary, the Executive shall not
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have the right to terminate his employment with the Company during the Term of Employmentexcept in the event of a Constructive Termination Without Cause, and any voluntary termination ofemployment during the Term of Employment in violation of this Agreement shall be considered amaterial breach.          (f) No Mitigation; No Offset. In the event of any termination of employment, theExecutive shall be under no obligation to seek other employment and, except as provided in Section9(c)(viii), amounts due the Executive under this Agreement shall not be offset by any remunerationattributable to any subsequent employment that he may obtain.          (g) Nature of Payments. Any amounts due under this Section 9 are in the nature ofseverance payments considered to be reasonable by the Company and are not in the nature of apenalty.          (h) No Further Liability; Release. In the event of the Executive’s termination ofemployment, payment made and performance by the Company in accordance with this Section 9 shalloperate to fully discharge and release the Company and its directors, officers, employees,subsidiaries, affiliates, stockholders, successors, assigns, agents and representatives from anyfurther obligation or liability with respect to the Executive’s rights under this Agreement. Otherthan payment and performance under this Section 9, the Company and its directors, officers,employees, subsidiaries, affiliates, stockholders, successors, assigns, agents and representativesshall have no further obligation or liability to the Executive or any other person under thisAgreement in the event of the Executive’s termination of employment. The Company shall have theright to condition the payment of any severance or other amounts pursuant to this Section 9 uponthe delivery by the Executive to the Company of a release in the form satisfactory to the Companyreleasing any and all claims the Executive may have against the Company and its directors,officers, employees, subsidiaries, affiliates, stockholders, successors, assigns, agents andrepresentatives arising out of this Agreement.     10. Confidentiality: Cooperation with Regard to Litigation; Non-Disparagement; Return ofCompany Materials.          (a) During the Term of Employment and thereafter, the Executive shall not, without the priorwritten consent of the Company, disclose to anyone (except in good faith in the ordinary course ofbusiness to a person who will be advised by the Executive to keep such information confidential) ormake use of any Confidential Information, except in the performance of his duties hereunder or whenrequired to do so by legal process, by any governmental agency having supervisory authority overthe business of the Company or by any administrative or legislative body (including a committeethereof) that requires him to divulge, disclose or make accessible such information. In the eventthat the Executive is so ordered, he shall give prompt written notice to the Company in order toallow the Company the opportunity to object to or otherwise resist such order.          (b) During the Term of Employment and thereafter, the Executive shall not disclose theexistence or contents of this Agreement beyond what is disclosed in the proxy statement ordocuments filed with the government unless and to the extent such disclosure is
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required by law, by a governmental agency, or in a document required by law to be filed with agovernmental agency or in connection with enforcement of his rights under this Agreement. In theevent that disclosure is so required, the Executive shall give prompt written notice to the Companyin order to allow the Company the opportunity to object to or otherwise resist such requirement.This restriction shall not apply to such disclosure by him to members of his immediate family, histax, legal or financial advisors, any lender, or tax authorities, or to potential future employersto the extent necessary, each of whom shall be advised not to disclose such information.          (c) “Confidential Information” shall mean (i) all information concerning the business of theCompany or any Subsidiary including information relating to any of their products, productdevelopment, trade secrets, customers, suppliers, finances, and business plans and strategies, and(ii) information regarding the organization structure and the names, titles, status, compensation,benefits and other proprietary employment-related aspects of the employees of the Company and theCompany’s employment practices. Excluded from the definition of Confidential Information isinformation (A) that is or becomes part of the public domain, other than through the breach of thisAgreement by the Executive or (B) regarding the Company’s business or industry properly acquired bythe Executive in the course of his career as an executive in the Company’s industry and independentof the Executive’s employment by the Company. For this purpose, information known or availablegenerally within the trade or industry of the Company or any Subsidiary shall be deemed to be knownor available to the public.          (d) “Subsidiary” shall mean any corporation controlled directly or indirectly by the Company.          (e) The Executive agrees to cooperate with the Company, during the Term of Employment andthereafter (including following the Executive’s termination of employment for any reason), bymaking himself reasonably available to testify on behalf of the Company or any Subsidiary in anyaction, suit, or proceeding, whether civil, criminal, administrative, or investigative, and toassist the Company, or any Subsidiary, in any such action, suit, or proceeding, by providinginformation and meeting and consulting with the Board or its representatives or counsel, orrepresentatives or counsel to the Company, or any Subsidiary as requested; provided, however thatthe same does not materially interfere with his then current professional activities. The Companyagrees to reimburse the Executive on a monthly basis for all expenses actually incurred in theprior month in connection with his provision of testimony or assistance.          (f) The Executive agrees that, during the Term of Employment and thereafter (includingfollowing the Executive’s termination of employment for any reason) he will not make statements orrepresentations, or otherwise communicate, directly or indirectly, in writing, orally, orotherwise, or take any action which may, directly or indirectly, disparage the Company or anySubsidiary or their respective officers, directors, employees, advisors, businesses or reputations.The Company agrees that, during the Term of Employment and thereafter (including following theExecutive’s termination of employment for any reason) the Company will not make statements orrepresentations, or otherwise communicate, directly or
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indirectly, in writing, orally, or otherwise, or take any action which may directly or indirectly,disparage the Executive or his business or reputation. Notwithstanding the foregoing, nothing inthis Agreement shall preclude either the Executive or the Company from making truthful statementsor disclosures that are required by applicable law, regulation, or legal process.          (g) Upon any termination of employment, the Executive agrees to deliver any Company propertyand any documents, notes, drawings, specifications, computer software, data and other materials ofany nature pertaining to any Confidential Information that are held by the Executive and will nottake any of the foregoing, or any reproduction of any of the foregoing, that is embodied in anytangible medium of expression, provided that the foregoing shall not prohibit the Executive fromretaining his personal phone directories and rolodexes.     11. Non-competition.          (a) During the Restriction Period (as defined in Section 11(b) below), the Executive shall notengage in Competition with the Company or any Subsidiary. “Competition” shall mean engaging in anyactivity, except as provided below, for a Competitor of the Company or any Subsidiary, whether asan employee, consultant, principal, agent, officer, director, partner, shareholder (except as aless than one percent shareholder of a publicly traded company) or otherwise. A “Competitor” shallmean any business (in the U.S. or any country in which the Company or any Subsidiary operates)which is in material competition with the Company or any Subsidiary and in which the Executive’sfunctions would be substantially similar to the Executive’s functions with the Company. If theExecutive commences employment or becomes a consultant, principal, agent, officer, director,partner, or shareholder of any entity that is not a Competitor at the time the Executive initiallybecomes employed or becomes a consultant, principal, agent, officer, director, partner, orshareholder of the entity, future activities of such entity shall not result in a violation of thisprovision unless (x) such activities were contemplated by the Executive at the time the Executiveinitially became employed or becomes a consultant, principal, agent, officer, director, partner, orshareholder of the entity or (y) the Executive commences directly or indirectly to advise, plan,oversee or manage the activities of an entity which becomes a Competitor during the RestrictionPeriod, that activities are competitive with the activities of the Company or any Subsidiary.          (b) For the purposes of this Section 11, “Restriction Period” shall mean the period beginningwith the Effective Date and ending with: (i) in the case of a termination of the Executive’semployment without Cause, voluntary termination, upon a Change of Control ora Constructive Termination Without Cause, the Restriction Period shallterminate immediately upon the Executive’s termination of employment; and,  (ii) in the case of a termination of the Executive’semployment for Cause, 12 months from the date of such termination.
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     12. Non-solicitation of Employees*.*          During the period beginning with the Effective Date and ending 12 months following thetermination of the Executive’s employment, the Executive shall not induce employees of the Companyor any Subsidiary to terminate their employment; provided, however, that the foregoing shall not beconstrued to prevent the Executive from engaging in generic nontargeted advertising for employeesgenerally. During such period, the Executive shall not hire, either directly or through anyemployee, agent or representative, any employee of the Company or any Subsidiary or any person whowas employed by the Company or any Subsidiary within 180 days of such hiring.     13. Remedies.          In addition to whatever other rights and remedies the Company may have at equity or in law, ifthe Executive breaches any of the provisions contained in Sections 10, 11 or 12 above, the Company(a) shall have its rights under Section 10 of this Agreement, (b) shall have the right toimmediately terminate all payments and benefits due under this Agreement and (c) shall have theright to seek injunctive relief. The Executive acknowledges that such a breach of Sections 10, 11or 12 would cause irreparable injury and that money damages would not provide an adequate remedyfor the Company; provided, however, the foregoing shall not prevent the Executive from contestingthe issuance of any such injunction on the ground that no violation or threatened violation ofSections 10, 11 or 12 has occurred.     14. Resolution of Disputes.          Any controversy or claim arising out of or relating to this Agreement or any breach orasserted breach hereof or questioning the validity and binding effect hereof arising under or inconnection with this Agreement, other than seeking injunctive relief under Section 13, shall beresolved by binding arbitration, to be held at an office closest to the Company’s principal officesin accordance with the rules and procedures of the American Arbitration Association, except thatdisputes arising under or in connection with Sections 10, 11 and 12 above shall be submitted to thefederal or state courts in the State of New York. Judgment upon the award rendered by thearbitrator(s) may be entered in any court having jurisdiction thereof. Pending the resolution ofany arbitration or court proceeding, the Company shall continue payment of all amounts and benefitsdue the Executive under this Agreement. All reasonable costs and expenses (including fees anddisbursements of counsel) incurred by the Executive pursuant to this Section 14 shall be paid onbehalf of or reimbursed to the Executive on a monthly basis by the Company for reasonable costs andexpenses incurred in the prior month; provided, however, that in the event the arbitrator(s)determine(s) that any of the Executive’s litigation assertions or defenses are determined to be inbad faith or frivolous, no such reimbursements shall be due the Executive, and any such expensesalready paid to the Executive shall be immediately returned by the Executive to the Company.     15. Indemnification.
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          (a) Company Indemnity. The Company agrees that if the Executive is made a party, oris threatened to be made a party, to any action, suit or proceeding, whether civil, criminal,administrative or investigative (a “Proceeding”), by reason of the fact that he is or was adirector, officer or employee of the Company or any Subsidiary or is or was serving at the requestof the Company or any Subsidiary as a director, officer, member, employee or agent of anothercorporation, partnership, joint venture, trust or other enterprise, including service with respectto employee benefit plans, whether or not the basis of such Proceeding is the Executive’s allegedaction in an official capacity while serving as a director, officer, member, employee or agent, theExecutive shall be indemnified and held harmless by the Company to the fullest extent legallypermitted or authorized by the Company’s certificate of incorporation or bylaws or resolutions ofthe Company’s Board or, if greater, by the laws of the State of New York against all cost, expense,liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excisetaxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered bythe Executive in connection therewith, and such indemnification shall continue as to the Executiveeven if he has ceased to be a director, member, officer, employee or agent of the Company or otherentity and shall inure to the benefit of the Executive’s heirs, executors and administrators. TheCompany shall advance to the Executive all reasonable costs and expenses to be incurred by him inconnection with a Proceeding within 20 days after receipt by the Company of a written request forsuch advance, together with such documentation as may be reasonably requested by the Company. Suchrequest shall include an undertaking by the Executive to repay the amount of such advance if itshall ultimately be determined that he is not entitled to be indemnified against such costs andexpenses. The provisions of this Section 15(a) shall not be deemed exclusive of any other rightsof indemnification to which the Executive may be entitled or which may be granted to him, and itshall be in addition to any rights of indemnification to which he may be entitled under any policyof insurance.          (b) No Presumption Regarding Standard of Conduct. Neither the failure of the Company(including its Board, independent legal counsel or stockholders) to have made a determination priorto the commencement of any proceeding concerning payment of amounts claimed by the Executive underSection 15(a) above that indemnification of the Executive is proper because he has met theapplicable standard of conduct, nor a determination by the Company (including its Board,independent legal counsel or stockholders) that the Executive has not met such applicable standardof conduct, shall create a presumption that the Executive has not met the applicable standard ofconduct.          (c) Liability Insurance. The Company agrees to continue and maintain a directors andofficers’ liability insurance policy covering the Executive to the extent the Company provides suchcoverage for its other executive officers.     16. Excise Tax Gross-Up.     If the Executive becomes entitled to one or more payments (with a “payment” including, withoutlimitation, the vesting of an option or other non-cash benefit or property), whether pursuant tothe terms of this Agreement or any other plan, arrangement, or agreement with the Company or anyaffiliated company (the “Total Payments”), which are or become
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subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the“Code”) (or any similar tax that may hereafter be imposed) (the “Excise Tax”), the Company shallpay to the Executive at the time specified below an additional amount (the “Gross-up Payment”)(which shall include, without limitation, reimbursement for any penalties and interest that mayaccrue in respect of such Excise Tax) such that the net amount retained by the Executive, afterreduction for any Excise Tax (including any penalties or interest thereon) on the Total Paymentsand any federal, state and local income or employment tax and Excise Tax on the Gross-up Paymentprovided for by this Section 16, but before reduction for any federal, state, or local income oremployment tax on the Total Payments, shall be equal to the sum of (a) the Total Payments, and (b)an amount equal to the product of any deductions disallowed for federal, state, or local income taxpurposes because of the inclusion of the Gross-up Payment in the Executive’s adjusted gross incomemultiplied by the highest applicable marginal rate of federal, state, or local income taxation,respectively, for the calendar year in which the Gross-up Payment is to be made. For purposes ofdetermining whether any of the Total Payments will be subject to the Excise Tax and the amount ofsuch Excise Tax: (i) The Total Payments shall be treated as “parachute payments” withinthe meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments”within the meaning of Section 280G(b)(1) of the Code shall be treated as subjectto the Excise Tax, unless, and except to the extent that, in the written opinionof independent compensation consultants, counsel or auditors of nationallyrecognized standing (“Independent Advisors”) selected by the Company andreasonably acceptable to the Executive, the Total Payments (in whole or in part)do not constitute parachute payments, or such excess parachute payments (in wholeor in part) represent reasonable compensation for services actually renderedwithin the meaning of Section 280G(b)(4) of the Code in excess of the base amountwithin the meaning of Section 280G(b)(3) of the Code or are otherwise not subjectto the Excise Tax;  (ii) The amount of the Total Payments which shall be treated as subject tothe Excise Tax shall be equal to the lesser of (A) the total amount of the TotalPayments or (B) the total amount of excess parachute payments within the meaningof Section 280G(b)(1) of the Code (after applying clause (i) above); and  (iii) The value of any non-cash benefits or any deferred payment orbenefit shall be determined by the Independent Advisors in accordance with theprinciples of Sections 280G(d)(3) and (4) of the Code.          For purposes of determining the amount of the Gross-up Payment, the Executive shall be deemed(A) to pay federal income taxes at the highest marginal rate of federal income taxation for thecalendar year in which the Gross-up Payment is to be made; (B) to pay any applicable state andlocal income taxes at the highest marginal rate of taxation for the calendar year in which theGross-up Payment is to be made, net of the maximum reduction in federal income taxes which could beobtained from deduction of such state and local taxes if paid in
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such year (determined without regard to limitations on deductions based upon the amount of theExecutive’s adjusted gross income); and (C) to have otherwise allowable deductions for federal,state, and local income tax purposes at least equal to those disallowed because of the inclusion ofthe Gross-up Payment in the Executive’s adjusted gross income. In the event that the Excise Tax issubsequently determined to be less than the amount taken into account hereunder at the time theGross-up Payment is made, the Executive shall repay to the Company at the time that the amount ofsuch reduction in Excise Tax is finally determined (but, if previously paid to the taxingauthorities, not prior to the time the amount of such reduction is refunded to the Executive orotherwise realized as a benefit by the Executive) the portion of the Gross-up Payment that wouldnot have been paid if such Excise Tax had been applied in initially calculating the Gross-upPayment, plus interest on the amount of such repayment at the rate provided in Section1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amounttaken into account hereunder at the time the Gross-up Payment is made (including by reason of anypayment the existence or amount of which cannot be determined at the time of the Gross-up Payment),the Company shall make an additional Gross-up Payment in respect of such excess (plus any interestand penalties payable with respect to such excess) at the time that the amount of such excess isfinally determined.          The Gross-up Payment provided for above shall be paid on the 30th day after it has beendetermined that the Total Payments (or any portion thereof) are subject to the Excise Tax and thatthe Executive has the right to such Gross-up Payment pursuant to this Section 16 ; provided,however, that if the amount of such Gross-up Payment or portion thereof cannot be finallydetermined by such date, the Company shall pay to the Executive on such date an estimate, asdetermined by the Independent Advisors, of the minimum amount of such payments and shall pay theremainder of such payments, if any, (together with interest at the rate provided in Section1274(b)(2)(B) of the Code), immediately upon the determination of the amount thereof. In the eventthat the amount of the estimated payments exceeds the amount subsequently determined to have beendue, the Executive shall immediately repay such excess to the Company on the date such amount isfinally determined (together with interest at the rate provided in Section 1274(b)(2)(B) of theCode). If more than one Gross-up Payment is made, the amount of each Gross-up Payment shall becomputed so as not to duplicate any prior Gross-up Payment. The Company shall have the right tocontrol all proceedings with the Internal Revenue Service that may arise in connection with thedetermination and assessment of any Excise Tax and, at its sole option, the Company may pursue orforego any and all administrative appeals, proceedings, hearings, and conferences with any taxingauthority in respect of such Excise Tax (including any interest or penalties thereon); provided,however, that the Company’s control over any such proceedings shall be limited to issues withrespect to which a Gross-up Payment would be payable hereunder, and the Executive shall be entitledto settle or contest any other issue raised by the Internal Revenue Service or any other taxingauthority. The Executive shall cooperate with the Company in any proceedings relating to thedetermination and assessment of any Excise Tax and shall not take any position or action that wouldmaterially increase the amount of any Gross-Up Payment hereunder.     17. Effect of Agreement on Other Benefits.
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          Except as specifically provided in this Agreement, the existence of this Agreement shall notbe interpreted to preclude, prohibit or restrict the Executive’s participation in any otheremployee benefit or other plans or programs in which he currently participates.     18. Assignability: Binding Nature.          No rights or obligations of either the Executive (except as provided in Section 24, below) orthe Company under this Agreement may be assigned or transferred including without limitation, thoserights or obligations customarily assigned or transferred in connection with the merger,consolidation, sale, or transfer of all, or substantially all of the assets, of the Company;provided, however, that this Agreement shall be binding upon and inure to the benefit of the heirsof the Executive and that the Executive’s rights to compensation and benefits may be transferred bywill or the laws of descent and distribution.     19. Representation.          The Company represents and warrants that it is fully authorized and empowered to enter intothis Agreement and that the performance of its obligations under this Agreement will not violateany agreement between it and any other person, firm or organization.     20. Entire Agreement.          This Agreement contains the entire understanding and agreement between the Parties concerningthe subject matter hereof and, as of the Effective Date, supersedes all prior agreements,understandings, discussions, negotiations and undertakings, whether written or oral, between theParties with respect thereto, except with respect to the specific award agreements referred toherein and, for the avoidance of doubt, is not intended to, nor does it in any way, address therights and obligations of the Executive arising out of any agreement between the Executive andMariner, pursuant to which Mariner holds as nominee for the Executive options to purchase shares ofthe Company.     21. Amendment or Waiver.          No provision in this Agreement may be amended unless such amendment is agreed to in writingand signed by the Executive and an authorized officer of the Company. Except as set forth herein,no delay or omission to exercise any right, power or remedy accruing to any Party shall impair anysuch right, power or remedy or shall be construed to be a waiver of or an acquiescence to anybreach hereof. No waiver by either Party of any breach by the other Party of any condition orprovision contained in this Agreement to be performed by such other Party shall be deemed a waiverof a similar or dissimilar condition or provision at the same or any prior or subsequent time. Anywaiver must be in writing and signed by the Executive or an authorized officer of the Company, asthe case may be.     22. Severability.
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          In the event that any provision or portion of this Agreement shall be determined to be invalidor unenforceable for any reason, in whole or in part, the remaining provisions of this Agreementshall be unaffected thereby and shall remain in full force and effect to the fullest extentpermitted by law.     23. Survivorship.          The respective rights and obligations of the Parties hereunder shall survive any terminationof the Executive’s employment to the extent necessary to the intended preservation of such rightsand obligations.     24. Beneficiaries/References.          The Executive shall be entitled, to the extent permitted under any applicable law, to selectand change a beneficiary or beneficiaries to receive any compensation or benefit payable hereunderfollowing the Executive’s death by giving the Company written notice thereof. In the event of theExecutive’s death or a judicial determination of his incompetence, reference in this Agreement tothe Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or otherlegal representative.     25. Governing Law/Jurisdiction.          This Agreement shall be governed by and construed and interpreted in accordance with the lawsof New York without reference to principles of conflict of laws. Subject to Section 14, theCompany and the Executive hereby consent to the jurisdiction of any or all of the following courtsfor purposes of resolving any dispute under this Agreement: (i) the United States District Courtfor the Southern District of New York or (ii) any of the courts of the State of New York. TheCompany and the Executive further agree that any service of process or notice requirements in anysuch proceeding shall be satisfied if the rules of such court relating thereto have beensubstantially satisfied. The Company and the Executive hereby waive, to the fullest extentpermitted by applicable law, any objection which it or he may now or hereafter have to suchjurisdiction and any defense of inconvenient forum.     26. Notices.          Any notice given to a Party shall be in writing and shall be deemed to have been given whendelivered personally or sent by certified or registered mail, postage prepaid, return receiptrequested, duly addressed to the Party concerned at the address indicated below or to such changedaddress as such Party may subsequently give such notice of:If to the Company: