EX-10.5 EMPLOYMENT AGREEMENT FOR DAVID A. ISAAC



 





EXHIBIT 10.5




CRAWFORD & COMPANY




THE GARDEN CITY GROUP, INC.




Employment Agreement for David A. Isaac




Effective January 1, 2006




 









 





CRAWFORD & COMPANY




THE GARDEN CITY GROUP, INC.




Employment Agreement for David A. Isaac




Effective January 1, 2006




     THIS EMPLOYMENT AGREEMENT by and among Crawford & Company, a Georgia corporation (the “Company”),
The Garden City Group, Inc., a Delaware corporation wholly owned by the Company (“GCG”), and David
A. Isaac (“Executive”) became effective as of January 1, 2006 (the “Effective Date”). This
Employment Agreement (the “Agreement”) has been executed and entered into by all of the parties
hereto on September 19, 2006 (the “Signing Date”).



WITNESSETH




     WHEREAS, the Company and GCG desire that Executive be employed as Chief
Executive Officer of GCG, and Executive desires to accept such employment, on the terms and
conditions herein set forth.



     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
contained herein, and other good and valuable consideration the receipt and adequacy of which the
parties each hereby acknowledge, the Company, GCG and Executive hereby agree as follows:




	 	1.	 	Employment.





     GCG hereby agrees to employ Executive as its Chief Executive Officer, and Executive hereby agrees
to accept such employment during the Term as defined in Section 2 (subject to Sections 6 and 7) and
to serve in such capacities from and after January 1, 2006, upon the terms and conditions set forth
in this Agreement. Prior to January 1, 2006, Executive served as President of GCG, pursuant to the
terms of an employment agreement dated as of January 1, 2002 (the “Prior Employment Agreement”).
The Prior Employment Agreement is superseded in its entirety by this Agreement, and shall have no
further effect after December 31, 2005; provided, however, that (i) Executive’s employment by GCG
is a continuation of his employment under the Prior Employment Agreement; (ii) any payments to
Executive made under the Prior Employment Agreement for services in 2006 shall be credited against
the obligations of GCG or the Company hereunder (subject to Section 4(d)); and (iii) Executive
remains entitled to all rights and benefits accrued under the Prior Employment Agreement as of
December 31, 2005 to the extent such rights and benefits remain unpaid and to the extent such
rights and benefits are not duplicated under this Agreement.




	 	2.	 	Term.





     The term of employment of Executive under this Agreement (the “Term”) shall be the period
commencing on January 1, 2006 and ending on December 31, 2010 and any period of extension thereof
in accordance with this Section 2, except that the Term will end at a date, prior to the end of
such period or extension thereof, specified in Section 6 or 7 in the event of termination of
Executive’s employment. The Term, if not previously ended, shall be extended



 









 




automatically without
further action by either party by one additional year (added to the end of the Term) first on
December 31, 2010 (extending the Term to December 31, 2011) and on each succeeding December 31
thereafter, unless either party shall have served written notice in accordance with Section 12(d)
upon the other party on not later than the August 31 before the December 31 extension date electing
not to extend the Term further as of that December 31 extension date, in which case employment
shall terminate on that December 31 and the Term shall end at that date, subject to earlier
termination of employment and earlier termination of the Term in accordance with Section 6 or 7.
The foregoing notwithstanding, in the event there occurs a Change of Control during the Term, the
Term will extend until the later of December 31, 2012 or the date two years after the Change of
Control (subject to Section 6 or 7), and, in the latter case, the Term will be automatically
extended at any non-December 31 termination date (i.e., the date two years after the Change of
Control, if applicable) to the next December 31 unless either party shall have served written
notice 120 days before that non-December 31 termination date (in the manner specified in this
Section 2) not to extend the Term at that date.





	 	3.	 	Offices and Duties.





     The provisions of this Section 3 will apply during the Term, except as otherwise provided in
Section 7(b) and 7(d):



     (a) Generally. Executive shall serve as the Chief Executive Officer of GCG. Executive shall
have and perform such duties, responsibilities, and authorities as are customary for the Chief
Executive Officer of GCG, with his principal area of authority and responsibility being for all
daily activities and/or the direction of daily activities regarding all operations of GCG.
Executive shall also have authority and responsibility for marketing GCG’s services to clients and
prospective clients, providing advice and assistance in enhancing GCG’s services to meet the needs
of new clients or prospective clients, and enhancing GCG’s position in the marketplace. Executive
shall devote his full business time and attention, and his best efforts, skills, abilities,
experience, and talent, to the position of Chief Executive Officer of GCG and for the businesses of
GCG, except that Executive (i) may make personal and family investments which are not in conflict
with his duties hereunder and manage personal and family financial and legal affairs, (ii)
undertake public speaking engagements, and (iii) serve as a director of (or similar position with)
any educational, charitable, community, civic, religious, or similar type of organization, so long
as such activities (i.e., those listed in clauses (i) through (iii)) do not preclude or render
unlawful Executive’s employment or service to GCG or otherwise materially conflict with the
performance of Executive’s duties under this Agreement or impair the business of GCG, the Company
or any of their subsidiaries. The existence of any such material conflict shall be determined in
good faith by the GCG Board. Executive will report directly to the Chairman of the Board of GCG and
to the President of the Company and the Executive Vice President of the Company who is overseeing
the GCG business. Executive’s title, position, duties, responsibilities and authorities set forth
in this Section 3(a) are material provisions of this Agreement.



     (b) Place of Employment. Executive’s principal place of employment shall be in the New York
City metropolitan area. Executive shall perform his duties from such location, except for business
travel. The provisions of this Section 3(b) are material provisions of the Agreement.




	 	4.	 	Salary, Annual Incentive Compensation, Commissions and True-Up.




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     As partial compensation for the services to be rendered hereunder by Executive, GCG agrees to
pay to Executive during the Term the compensation set forth in this Section 4.



     (a) Base Salary. GCG will pay to Executive during the Term a base salary at the
annual rate of $600,000, payable in accordance with GCG’s usual payroll practices with respect to
senior executives (with transition payments to cover periods prior to the Signing Date, and subject
to any permitted deferrals under GCG or Company deferral plans). Executive’s annual base salary
shall be reviewed by GCG at least annually during the Term, beginning in 2007, and, with the
approval of the Company’s Executive Vice President or higher officer of the Company, may be
increased above, but may not be reduced below, the then-current rate of such base salary. For
purposes of this Agreement, “Base Salary” means Executive’s then- current base salary. Payment of
unpaid Base Salary for the period from the Effective Date to the Signing Date shall be made
together with the regularly scheduled salary payment for the payroll period which includes the
first business day after the Signing Date.



     (b) Annual Incentive Compensation. GCG will pay to Executive annual incentive compensation for
service during the Term, which shall offer to Executive an opportunity to earn additional
compensation based upon performance in amounts determined in accordance with this Section 4(b). For
each fiscal year of GCG during the Term, this annual incentive opportunity shall be in the form of
a “Profit Participation,” entitling Executive to an annual incentive payment as follows:



For 2006:




	 	 	 	 	 
	Payment Level	 	Payment Amount	 	Required Annual Performance
	Minimum
	 	$250,000	 	10% growth in GCG pre-tax income
	Target
	 	$400,000	 	15% growth in GCG pre-tax income
	Maximum
	 	$600,000	 	20% growth in GCG pre-tax income






For 2007 and later years:




	 	 	 	 	 
	Payment Level	 	Payment Amount	 	Required Annual Performance
	Minimum
	 	$250,000	 	10% growth in three-year average GCG pre-tax income
	Target
	 	$400,000	 	15% growth in three-year average GCG pre-tax income
	Maximum
	 	$600,000	 	20% growth in three-year average GCG pre-tax income





Pre-tax income shall be determined based on pre-tax income of GCG determined in connection with the
preparation of the Company’s audited financial statements determined in accordance with GAAP as
applied by the Company in each relevant year. For this purpose (and for purposes of Section
5(a)(ii)), pre-tax income shall be determined before taxes but after expense (including expense for
profit participations, equity awards, services paid for by the Company for the benefit of GCG (to
be re-evaluated annually as agreed to by Executive and the Executive Vice President of the Company
overseeing the GCG business), and interest on borrowed funds




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(if any) at the Company’s prevailing rate of interest). For the 2006 performance year, growth shall
be measured comparing the pre-tax income in 2006 to the 2005 pre-tax income target amount of $9.239
million. For the 2007 and later performance years, growth shall be measured comparing the pre-tax
income in the relevant performance year to the average actual pre-tax income in the three preceding
years (for this purpose, GCG’s actual pre-tax income, calculated in accordance with this Section
4(b), for 2005 was $17.606 million and for 2004 was $8.217 million). For cumulative performance
between Minimum and Target or between Target and Maximum, straight-line interpolation will apply.
For each year in the Term, no amount will be payable for cumulative performance less than 10%
growth and the maximum amount payable will be $600,000. Payment of this annual incentive shall be
required to be made by March 15 of the year following the performance year, provided, however, that
if audited financial statements of the Company for the performance year have not been prepared and
completed by March 15 of the following year due to circumstances unforeseeable at the Signing Date,
the payment of the annual incentive shall be delayed until 15 days after delivery of such audited
financial statements. This provision will be subject to Section 4(e) in the event of a merger or
other acquisition affecting GCG.




     (c) Commissions on Fee Revenue. Executive will be entitled to a commission paid by GCG based
on the gross fee revenues of GCG during the Term actually recognized on GCG’s books and records
less reasonable reserves for bad debt, from cases and projects that commenced since the July
4,1996, net of pass-through expenses billed to clients, in an amount equal to three percent (3%) of
such gross fee revenues per calendar year. For this purpose, fees shall include revenues earned by
GCG related to advertising placed by GCG for clients and revenues earned from money management and
cash deposit services, but shall exclude any revenues resulting from an acquisition or merger
whenever recognized by GCG. These commissions will be earned when revenue is recognized on GCG’s
books and records less bad debts, and will be payable by GCG to Executive semi-annually in January
and July of each year; provided, however, that a quarterly payment will be made in October 2006,
with any amount payable hereunder for periods in 2006 prior to the Signing Date in excess of
commissions on fee revenue already paid in 2006 to be included in that quarterly payment. This
provision will be subject to Section 4(e) in the event of a merger or other acquisition affecting
GCG.



     (d) True-Up Payment for 2006. Following completion of 2006 and determination of payments due
hereunder for 2006, if the Term did not end on or before December 31, 2006, the Company shall
determine whether a payment (the “True-Up Payment”) is due under this Section 4(d) and shall
promptly pay such amount. The True-Up Payment shall be equal to the following:




(A) The sum of the amounts that would have been payable to Executive for 2006
(including any amounts in fact paid) under Sections 4.2 and 4.3 of the Prior Employment Agreement,
assuming it had remained in effect throughout 2006, minus the sum of (B) the amounts paid or
payable under Sections 4(b) and 4(c) of this Agreement and (C) $250,000.


If the True-Up Payment amount is zero or a negative amount, no payment will be made under this
Section 4(d) and no other adjustment will be made hereunder. Payment under this Section 4(d) will
be due by the deadline for payment under Section 4(b).




     (e) Effect of Expansion of GCG Business Through Acquisition. In the event of a merger or
acquisition by GCG or in the event of a disposition by GCG, the Company and Executive



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shall negotiate and agree upon adjustments to the determination of pre-tax income for purposes of
Section 4(b) and 5(a)(ii) and in the provision for commissions on fee revenue under Section 4(c) so
as to preserve the incentive opportunities provided hereunder, subject to the following:





	 	(i)	 	Such adjustments shall be considered and agreed upon together with, and shall be
generally consistent with, adjustments to GCG’s Incentive Compensation Bonus Pool (the “ICBP”) or
any successor thereto.
	 
	 	(ii)	 	In adjusting commissions on fee revenues under Section 4(c), with regard to cases and
projects of a company acquired by or merged with GCG, Executive will be entitled to commissions
hereunder in respect of fee revenues resulting from additions and extensions of such cases and
projects acquired and on any new cases or projects of such acquired company, but the existing cases
and projects at the time of the acquisition (including the scope thereof and expected revenues)
shall be documented in writing at the time of the acquisition in a manner satisfactory to the
Company and Executive in order to establish that an event thereafter should be deemed an addition
or extension to any such case or project).
	 
	 	(iii)	 	If the Company, GCG, and Executive cannot agree upon the appropriate manner for
adjusting the incentive opportunities affected by such a merger or acquisition or disposition
within 90 days after completion of the transaction, the parties agree that they will submit to
mediation leading to binding arbitration (any such arbitration to be in accordance with Section 11
(b)). No dispute under this Section 4(e) other than failure to comply with a binding agreement
resolving the issues under this Section 4(e) (including but not limited to as a result of mediation
or arbitration) shall constitute Cause under Section 8(a) or Good Reason under Section 8(e) hereof.
	 
	 	5.	 	Long-Term Compensation, Including Restricted Stock, PSUs, Benefits, and Expense Reimbursement,
and Other Provisions.





     (a) Executive Compensation Plans. Executive shall be entitled during the Term to participate,
without discrimination or duplication, in all long-term executive compensation plans and programs
intended for general participation by senior executives of GCG, as presently in effect or as they
may be modified or added to by GCG or the Company from time to time, subject to the eligibility and
other requirements of such plans and programs. In addition to the foregoing:




	 	(i)	 	Restricted Stock. The Company shall grant Executive, as of the Signing Date
(i.e., the date that this Agreement has been executed by all of the parties hereto), 25,000 shares
of Restricted Stock under and subject to the terms of the Company’s Executive Stock Bonus Plan (the
“Restricted Stock”). The Restricted Stock shall vest in full on January 1, 2007, subject to
accelerated vesting upon a Change of Control or as otherwise provided in this Agreement. Restricted
Stock shall be subject to adjustment in the event of a corporate transaction, in accordance with
Section 10 of the Executive Stock Bonus Plan. Other terms of




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	 	 	 	the Restricted Stock shall be governed by the Executive Stock Bonus Plan and the Restricted Stock
Agreement thereunder.
	 
	 	(ii)	 	Performance Share Units. The Company shall grant to Executive as of
the Signing Date an award of Performance Share Units (the “PSUs”) under the Company’s Executive
Stock Bonus Plan, as follows (See attachment entitled “Performance Shares Award Accounting Impact
Summary”):
	 
	 	 	 	Target PSUs Granted:           250,000.
	 
	 	 	 	Performance Goal: Compound annual growth rate (CAGR) in GCG’s pre-tax income in the
2006 — 2010 period. Pre-tax income will be determined in the same manner as under Section 4(b) (and
subject to Section 4(e)), with growth measured comparing the pre-tax income in each performance
period to the target 2005 pre-tax income amount of $9.239 million.
	 
	 	 	 	Opportunity to Earn PSUs: The PSUs will be earned based on performance in two different
performance periods, 2006 — 2008 and 2006 — 2010, as specified below; provided, however, that no
PSUs will be earned unless pre-tax income in either 2007 or 2008 (in respect of the 2006 — 2008
performance period) or pre- tax income in either 2007, 2008, 2009 or 2010 (in respect of the 2006 –
2010 performance period) exceeds the 2005 pre-tax income target amount (except any payout under
Section 6 or 7 shall not be subject to this proviso). For performance between Minimum and Target or
between Target and Maximum in each performance period, straight-line interpolation will apply.
	 
	 	 	 	For the 2006 — 2008 performance period:





	 	 	 	 	 	 	 
	 	 	 	 	 	 	Required Performance
	Earning Level	 	PSUs Earned	 	(2006 -2008)
	Minimum

	 	 	75,000	 	 	10% CAGR in GCG pre-tax income
	Target

	 	 	150,000	 	 	15% CAGR in GCG pre-tax income
	Maximum

	 	 	187,200	 	 	20% CAGR in GCG pre-tax income







	 	 	 	For the 2006 — 2010 performance period:





	 	 	 	 	 
	 	 	 	 	Required Performance
	Earning Level	 	PSUs Earned	 	(2006-2010)
	Minimum

	 	125,000 minus number of
PSUs earned for 2006 -
2008 performance period
	 	10% CAGR in GCG pre-tax income
	Target

	 	250,000 minus number of
PSUs earned for 2006 -
2008 performance period
	 	15% CAGR in GCG pre-tax income
	Maximum

	 	250,000 minus number of
PSUs earned for 2006 -
2008 performance period
	 	20% CAGR in GCG pre-tax income






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	 	 	 	Service-based vesting and settlement of PSUs: PSUs
earned for the 2006 – 2008 performance
period will become vested if Executive has been continuously employed by GCG or the Company through
December 31, 2008, and the vested PSUs up to the Target level will be settled by delivery of one
share for each PSU not later than March 15, 2009; provided, however, that if audited financial
statements of the Company have not been prepared and completed by March 15, 2009 due to
circumstances unforeseeable at the Signing Date, the PSUs shall not be settled until 15 days after
delivery of such audited financial statements. Subject to Section 5(e), the PSUs earned for the
2006 – 2008 performance period in excess of the Target level will be settled by delivery of one
share for each PSU at the time PSUs earned for the 2006 – 2010 performance period are settled, but
not later than March 15, 2011.
	 
	 	 	 	PSUs earned for the 2006 – 2010 performance period will become vested if Executive has been
continuously employed by GCG or the Company through December 31, 2010, and will be settled by
delivery of one share for each PSU not later than March 15, 2011; provided, however, that if
audited financial statements of the Company have not been prepared and completed by March 15, 2011,
due to circumstances unforeseeable at the Signing Date, the PSUs for
the 2006 – 2010 performance
period shall not be settled until 15 days after delivery of such audited financial statements. Any
PSUs not earned and vested as of December 31, 2010 shall be forfeited.






	 	 	 	Accelerated vesting and settlement upon a Change of Control. In the event of a Change of
Control during the Term, the PSUs (including the Supplemental PSU grant described below, if it has
been granted at the time of the Change of Control) shall be deemed to be earned in accordance with
the provisions above relating to the 2006 – 2010 performance period (including provisions for
subtraction of PSUs earned in 2006 – 2008 performance period, if any) based on CAGR from the
beginning of the period through the date of the Change of Control (determined in good faith by the
Company’s Board), with all earned PSUs, together with any PSUs previously earned in the 2006 – 2008
performance period (including PSUs earned for above-Target performance) to be vested and settled
upon occurrence of the Change of Control. Any unvested PSUs shall continue to be subject to the
provisions of
Section 5(a)(ii) or shall be replaced with an incentive arrangement providing for
comparable incentive opportunities.






	 	 	 	The foregoing (and other provisions of this Agreement) notwithstanding, Executive will be entitled
to any more favorable terms applicable to the PSUs under Section 11 of the Executive Stock Bonus
Plan.




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	 	 	 	Other terms. PSUs shall be subject to adjustment in the event of a corporate transaction,
in accordance with Section 10 of the Executive Stock Bonus Plan. Other terms of the PSUs shall be
governed by the Executive Stock Bonus Plan and the Performance Share Units Agreement thereunder.
	 
	 	 	 	Supplemental PSU grant. The Company will consider the grant to Executive a supplemental
award of PSUs during the first two months of 2007, if Executive remains employed at the time of the
grant. Such award of PSUs, would give Executive the opportunity to earn an additional 62,000 PSUs
for performance in a 2007 – 2010 performance period, less the number of PSUs in excess of 125,000
earned for the 2006 – 2008 performance period. Such supplemental PSUs will be earned based on a
level of performance as specified by the Committee but not exceeding the performance that would be
required in the remainder of the 2006 – 2010 performance period in order that CAGR in GCG pre-tax
income in the 2006 – 2010 performance period would fall between 15% (minimum) and 20% (maximum).
The supplemental PSU award will be deemed earned by straight-line interpolation between the minimum
performance and maximum performance, which shall determine the portion of the 62,000 PSUs earned
(e.g., performance that exceeds the minimum level by 20% of the difference between minimum and
maximum will mean the gross number of the supplemental PSUs earned is 12,400), subject to a maximum
overall limitation of PSUs earned for the 2006 – 2010 performance period equal to the sum of the PSUs
and supplemental PSUs earned for such performance period less the number of PSUs earned for the
2006 – 2008 performance period.
	 
	 	 	 	Pro rata earning of PSUs. To determine the number of PSUs earned and to be settled on a pro
rata basis in circumstances in which a payout of pro rata PSUs is authorized under Section 6 or 7,
the following procedure for calculating the pro rata payouts will apply: First, the gross number of
PSUs deemed to be earned shall be calculated in accordance with the provisions of Section 5(a)(ii)
for the 2006 – 2008 performance period, if termination occurs before 2009, and also (in all cases
if termination occurs in the period 2006 – 2010) for the 2006 – 2010 performance period, in each
case based on CAGR from January 1, 2006 through the date of the termination event (determined in
good faith by the Company’s Board). For purposes of this pro rata earning calculation, the gross
number of PSUs potentially earnable for Maximum performance in the 2006 – 2010 performance period
shall be deemed to be 312,000 (rather than 250,000), regardless of whether the supplemental PSUs
have been granted, provided that, if the supplemental PSUs have not been granted, the maximum pro
rated number of PSUs that may be deemed earned is 250,000. Second, there shall be subtracted from
the gross number of PSUs deemed earned for the 2006 – 2010 performance period that number of PSUs
actually earned in respect of the 2006 – 2008 performance period, if the 2006 – 2008 performance
period has been completed, or, if not, the gross number of such PSUs that would have been earned
for the 2006 – 2008 performance period calculated under this provision (without regard to
proration). Third, if the 2006 – 2008 performance period has not been completed, the gross number
of PSUs with respect to that performance period shall be pro rated by multiplying the number of
PSUs determined by a fraction the numerator of which is the number of days Executive was employed




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	 	 	 	from January 1, 2006 through the date of termination and the denominator of which is the number of
days in the 2006 – 2008 performance period. Fourth, the number of PSUs for the 2006 – 2010
performance period determined under the second step shall be pro rated by multiplying that number
of PSUs by a fraction the numerator of which is the number of days Executive was employed from
January 1, 2006 through the date of termination and the denominator of which is the number of days
in the 2006 – 2010 performance period. Fifth: The sum of the number of PSUs determined under the
third and fourth steps (together with any PSUs actually earned and vested for the 2006 – 2008
performance period in excess of the Target level but not previously settled) will be settled as
promptly as practicable by delivery of shares to Executive (or his estate), subject to Section
5(e). Unearned PSUs will be forfeited. The supplemental PSUs will not be separately taken into
account in this pro rationing provision).
	 
	 	(iii)	 	Stock Options/Equity Awards. Executive shall be entitled to participate in the
stock option or other equity award plans of the Company.





     (b) Employee and Executive Benefit Plans. Executive shall be entitled during the Term to
participate, without discrimination or duplication, in all employee and executive benefit plans and
programs of GCG or the Company, as presently in effect or as they may be modified or added to by
GCG or the Company from time to time, if and to the extent such plans are generally available to
other senior executives or employees of GCG, subject to the eligibility and other requirements of
such plans and programs, including without limitation plans providing retirement benefits, medical
insurance and health benefits, life insurance, disability insurance, accidental death or
dismemberment insurance, and welfare benefits, as well as savings, profit-sharing, and stock
ownership plans.



     In furtherance of and not in limitation of the foregoing, during the Term, GCG, at its own expense,
will provide the following benefits to Executive:




	 	(i)	 	Vacation. Executive will participate as the Chief Executive Officer of GCG in
GCG executive and employee vacation and time-off programs; provided that Executive shall be
entitled to a minimum of four weeks of vacation per year, exclusive of GCG holidays;
	 
	 	(ii)	 	Life Insurance. In addition to $500,000 life insurance policy currently
maintained for Executive, Executive shall be entitled to a life insurance policy providing a death
benefit of $1.0 million (collectively with current policy, $1.5 million), provided that the cost of
the additional policy shall not exceed standard rates. If the cost of such an additional policy
would exceed standard rates, Executive shall be entitled to an additional life insurance policy
providing the largest death benefit that can be purchased for an amount equal to the standard-rate
cost of the $1.0 million policy.
	 
	 	(iii)	 	Short-Term Disability. Executive shall be entitled to a short-term disability
benefit of 60% of Base Salary for up to six months.
	 
	 	(iv)	 	Long-Term Disability. Executive shall be entitled to long-term disability
insurance, with a monthly benefit of $15,000 to Executive for the duration of the




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	 	 	 	disability (up to age 65 or, for such longer period permitted under GCG’s long-term disability policy), commencing with the expiration of short-term disability
benefits.
	 
	 	(v)	 	Car Expense. Executive shall be entitled to $1,000 per month to cover the costs
of an automobile and associated insurance.




GCG and the Company shall have the right to purchase key man or other insurance on the life of
Executive to fund welfare and employee benefits (including the
obligations under this Section 5b).




     (c) Reimbursement of Expenses.
GCG will promptly reimburse Executive for all out-of-pocket
business expenses and disbursements reasonably incurred by Executive in the performance of
Executive’s duties during the Term, subject to Executive’s furnishing GCG with evidence reasonably
satisfactory to GCG (such as receipts) substantiating the claimed expenditures (such expenses being
commensurate with the office and executive position of Executive hereunder) in accordance with
GCG’s reimbursement policies as in effect from time to time.



     (d) Company Registration Obligations. The Company will use its best efforts, at its own
expense, to file with the Securities and Exchange Commission and thereafter maintain the
effectiveness of one or more registration statements registering under the Securities Act of 1933,
as amended (the “1933 Act”), the offer and sale of shares by the Company to Executive pursuant to
stock options, the Restricted Stock, PSUs and any other equity-based awards granted to Executive
under the Executive Stock Bonus Plan, other Company plans or apart from a Company plan. In
addition, (i) if shares of Company stock are acquired by Executive under this Agreement in a
transaction resulting in the acquired shares being “restricted securities” for purposes of the 1933
Act, (ii) if Rule 144 under the 1933 Act is not available for the sale by Executive of his Company
stock acquired under this Agreement, or (iii) if Executive’s aggregate holdings of Company stock
exceed the then applicable volume limitation under Rule 144 under the 1933 Act such that such
holdings could not be promptly resold (i.e., within a three-month period) under Rule 144, the
Company will, upon request of Executive, use its best efforts to file a registration statement (or
amend a previously filed registration statement) registering the reoffer and resale of shares
acquired by Executive from the Company pursuant to this Agreement and thereafter to maintain the
registration statement in effect (including a current reoffer prospectus) for a period of one year.



     (e) Limitations Under Code Section 409A. In the event that, as a result of Section
409A of the Internal Revenue Code (the “Code”) (and any related regulations or other
pronouncements), any of the payments that Executive is entitled to under the terms of this
Agreement or any other plan or arrangement of GCG or the Company involving deferred compensation
(as defined under Code Section 409A) may not be made at the time contemplated by the terms thereof
without causing Executive to be subject to constructive receipt at a date prior to actual payment
and/or an income tax penalty and interest and the timing of payment is the sole cause of such
adverse tax consequences, GCG or the Company will make such payment on the first day permissible
under Code Section 409A without Executive incurring such adverse tax consequences (such delay will
not affect the timing of any installments or other payments otherwise payable after the six-month
delay period imposed under Section 409A). In particular, with respect to any payment triggered by
termination of



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employment hereunder, in the event of any delay in the payment date as a result of Code
Section 409A(a)(2)(A)(i) and (B)(i), GCG or the Company will adjust the payments to reflect the
deferred payment date by crediting interest thereon at the prime rate in effect at the time such
amount first becomes payable, as quoted by the Company’s principal bank. In addition, other
provisions of this Agreement or any other such plan or arrangement notwithstanding, GCG and the
Company shall have no right to accelerate or delay any such payment or to make any such payment as
the result of any specific event except to the extent permitted under Section 409A.





	 	6.	 	Termination Due to Death or Disability.





     (a) Death. In the event of Executive’s death which results in the termination of Executive’s
employment, the Term will terminate, all obligations of GCG, the Company and Executive under
Sections 1 through 5 of this Agreement will immediately cease except for obligations which
expressly continue after death, and GCG or the Company will pay Executive’s estate (which term
includes a beneficiary in any case in which a beneficiary is validly designated), and Executive’s
estate will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	Executive’s estate shall continue to receive payment of Executive’s Base Salary for six
months after death;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in which
Executive’s death occurred, an amount equal to the annual incentive compensation that was payable
in the previous year (or would have been payable in 2005 if death occurs in 2006) multiplied by a
fraction the numerator of which is the number of days Executive was employed in the year of his
death and the denominator of which is 365;
	 
	 	(iv)	 	The Restricted Stock granted under Section 5(a)(i) and not previously vested will vest in
an amount equal to the total number of shares of Restricted Stock granted multiplied by a fraction
the numerator of which is the number of days Executive was employed since January 1, 2006 and the
denominator of which is 365. Such vested shares will be delivered to the authorized representatives
of Executive’s estate as promptly as practicable;
	 
	 	(v)	 	The True-Up Payment shall be payable in accordance with the formula in Section 4(d),
except that any payment to Executive under this Section 6(a) of an amount provided for or
calculated under Section 4(b) or 4(c) or in lieu of such an amount shall be treated as a payment
under Sections 4(b) and 4(c);
	 
	 	(vi)	 	PSUs granted under Section 5(a)(ii) and not previously vested under Section
5(a)(ii) as a result of a Change of Control or forfeited will be deemed earned on a
pro rata basis and settled as specified under the subheading “Pro rata earning of
PSUs” in Section 5(a)(ii);
	 
	 	(vii)	 	For a period of two years after Executive’s death, Executive’s estate shall be paid
commissions pursuant to Section 4(c) hereof on any fee revenue derived from
business that was initiated before the date of death, and shall be entitled to




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	 	 	 	payment of the Profit Participation under Section 4(b) for the year of death and
continuing during the period of two years after Executive’s death; provided that
the Profit Participation payments initially payable hereunder shall be offset by the
amount paid pursuant to Section 6(a)(iii), and the Profit Participation payable for
the second calendar year following death will be prorated by determining the
amount for the full year multiplied by a fraction the numerator of which is the
number of days from January 1 of that year through the second anniversary of
Executive’s death and the denominator of which is 365. For purposes of this
provision, business is “initiated” if there is written documentation establishing a
firm engagement for specified services of GCG on a particular case or otherwise
documented under GCG’s current policy for opening a case; and
	 
	 	(viii)	 	All other rights to compensation following death payable by GCG or the
Company to Executive’s estate, including benefits, shall be determined in
accordance with the plans, policies and practices of GCG and the Company as
then in effect.





     (b) Disability. GCG may terminate the employment of Executive hereunder due to the Disability
(as defined in Section 8(d)) of Executive. Such employment shall terminate at the time a Notice of
Termination is given (or at such later date as may be specified in the Notice of Termination),
unless Executive has returned to service and presented to GCG a certificate of good health prior to
such termination as specified in Section 8(d). Upon termination of employment due to Disability,
the Term will terminate, all obligations of GCG, the Company and Executive under Sections 1 through
5 of this Agreement will immediately cease except for obligations which expressly continue after
termination of employment due to Disability, and GCG or the Company will pay Executive, and,
subject to Executive’s continuing compliance with the terms of this Agreement, Executive will be
entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Executive shall continue to receive payment of Executive’s Base Salary for six months
after termination, reduced by any disability benefits paid in lieu of Base Salary under GCG’s or
the Company’s employee benefit plans or programs then in effect;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in which
Executive’s termination occurred, an amount equal to the annual incentive
compensation that was payable in the previous year (or would have been
payable in 2005 if termination occurs in 2006) multiplied by a fraction the
numerator of which is the number of days Executive was employed in the year of
his termination and the denominator of which is 365;
	 
	 	(iv)	 	The Restricted Stock granted under Section 5(a)(i) and not previously vested will vest in
an amount equal to the total number of shares of Restricted Stock granted multiplied by a fraction
the numerator of which is the number of days Executive was employed since January 1, 2006 and the
denominator of which is 365. Such vested shares will be delivered to Executive as promptly as
practicable;




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	 	(v)	 	The True-Up Payment shall be payable in accordance with the formula in Section 4(d),
except that any payment to Executive under this Section 6(b) of an amount provided for or
calculated under Section 4(b) or 4(c) or in lieu of such an amount shall be treated as a payment
under Sections 4(b) and 4(c);
	 
	 	(vi)	 	PSUs granted under Section 5(a)(ii) and not previously vested under Section
5(a)(ii) as a result of a Change of Control or forfeited will be deemed earned on a
pro rata basis and settled as specified under the subheading “Pro rata earning of
PSUs” in Section 5(a)(ii);
	 
	 	(vii)	 	For a period of two years after Executive’s termination, Executive shall be paid
commissions pursuant to Section 4(c) hereof on any fee revenue derived from business that was
initiated before the date of termination, and shall be entitled to payment of the Profit
Participation under Section 4(b) for the year of termination and continuing during the period of
two years after Executive’s termination; provided that the Profit Participation payments initially
payable hereunder shall be offset by the amount paid pursuant to
Section 6(b)(iii), and the Profit
Participation payable for the second calendar year following termination will be prorated by
determining the amount for the full year multiplied by a fraction the numerator of which is the
number of days from January 1 of that year through the second anniversary of Executive’s
termination and the denominator of which is 365. For purposes of this provision, business is
“initiated” if there is written documentation establishing a firm engagement for specified services
of GCG on a particular case, or otherwise documented under GCG’s current policies for opening a
case; and
	 
	 	(viii)	 	All other rights to compensation following termination due to Disability payable by GCG
or the Company to Executive, including benefits, shall be determined in accordance with the plans,
policies and practices of GCG and the Company as then in effect.






     (c) Other Terms of Payment Following Death or Disability. Nothing in this Section 6
shall limit the benefits payable or provided in the event Executive’s employment terminates due to
death or Disability under the terms of plans or programs of GCG or the Company more favorable to
Executive (or his beneficiaries) than the benefits payable or provided under this Section 6 (except
in the case of annual incentives in lieu of which amounts are paid hereunder), including plans and
programs adopted after the date of this Agreement. Amounts payable under this Section 6 following
Executive’s termination of employment, other than those expressly payable following determination
of performance or otherwise expressly payable on a deferred basis, will be paid as promptly as
practicable after such termination of employment, subject to Section 5(e).




	 	7.	 	Termination of Employment For Reasons Other Than Death or Disability.





     (a) Termination by the Company for Cause or Voluntary Termination by Executive not for Good Reason.
GCG may terminate the employment of Executive hereunder for Cause (as defined in Section 8(a)) at
any time. Executive may terminate employment voluntarily without Good Reason at any time. At the
time Executive’s employment is terminated for Cause or by Executive voluntarily without Good
Reason, the Term will terminate, all obligations of GCG, the



-13-









 




Company and Executive under Sections 1 through 5 of this Agreement will immediately cease, and GCG
or the Company will pay Executive, and Executive will be entitled to receive, the following:





	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	All rights to any unpaid annual incentive award (Profit Participation) for the year of
termination will be forfeited;
	 
	 	(iii)	 	All unvested stock options, unvested Restricted Stock, unvested PSUs and other unvested
equity awards will be forfeited, and in other respects outstanding equity awards (such as vested
options) will be subject to the terms under which the
awards were granted; and
	 
	 	(iv)	 	All other rights to compensation following termination by GCG for Cause payable by GCG or
the Company to Executive, including benefits, shall be determined in accordance with the plans,
policies and practices of GCG and the Company as then in effect.





     (b) Termination by GCG Without Cause Not Related to a Change of Control. GCG may terminate the
employment of Executive hereunder without Cause, if the date of termination is more than 3 months
prior to and more than 12 months following a Change of Control, upon at least 30 days’ written
notice to Executive. The foregoing notwithstanding, GCG may elect, by written notice to Executive,
to terminate Executive’s positions specified in Sections 1 and 3 and all other obligations of
Executive and GCG and the Company under Section 3 at a date earlier than the expiration of such
30-day period, if so specified by GCG in the written notice, provided that Executive shall be
treated as an employee of GCG (without any assigned duties) for all other purposes of this
Agreement, including for purposes of Sections 4 and 5, from such specified date until the
expiration of such 30-day period. At the time Executive’s employment is terminated under this
Section 7(b) (i.e., at the expiration of such notice period), the Term will terminate, all
remaining obligations of GCG, the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease (except as expressly provided below), and GCG or the Company will
pay Executive, and, subject to Executive’s continuing compliance with the terms of this Agreement,
Executive will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Executive shall continue to receive payment of Executive’s Base Salary for 12 months
after termination;
	 
	 	(iii)	 	For a period of 12 months after Executive’s termination, Executive shall be paid
commissions pursuant to Section 4(c) hereof on any fee revenue derived from
business that was initiated before the date of termination, and shall be entitled to
payment of the Profit Participation under Section 4(b) for the year of termination
and continuing during the period of 12 months after Executive’s termination;
provided, however, that the Profit Participation payable for the calendar year
following termination will be prorated by determining the amount for the full year
multiplied by a fraction the numerator of which is the number of days from
January 1 of that year through the anniversary of Executive’s termination and the




-14-









 






	 	 	 	denominator of which is 365. For purposes of this provision, business is “initiated” if there is
written documentation establishing a firm engagement for specified services of GCG on a particular
case, or otherwise documented under GCG’s current policies for opening a case; and
	 
	 	(iv)	 	Executive and his eligible dependents shall be permitted to continue to
participate in all health, medical and dental plans and programs maintained by GCG or the Company
for 12 months after termination and shall pay, at the same cost to Executive as would apply if he
remained an employee of GCG, all required contributions to maintain such coverage, following which
time Executive and his eligible dependents will be entitled to the full COBRA continuation rights
as if the end of such 12-month period was the date of Executive’s termination of employment;
provided that coverage hereunder will cease (except for entitlement to rights under COBRA) at such
time as coverage of the same general type is available from another employer of Executive;
	 
	 	(v)	 	The True-Up Payment shall be payable in accordance with the formula in Section 4(d),
except that any payment to Executive under this Section 7(b) of an amount provided for or
calculated under Section 4(b) or 4(c) or in lieu of such an amount shall be treated as a payment
under Sections 4(b) and 4(c);
	 
	 	(vi)	 	The Restricted Stock granted under Section 5(a)(i) and not previously vested will vest in
full, and such vested shares will be delivered to Executive as promptly as practicable;
	 
	 	(vii)	 	PSUs granted under Section 5(a)(ii) and not previously vested under Section
5(a)(ii) as a result of a Change of Control or forfeited will be deemed earned on a
pro rata basis and settled as specified under the subheading “Pro rata earning of
PSUs” in Section 5(a)(ii);
	 
	 	(viii)	 	The vesting, exercisability and forfeiture of outstanding stock options and other equity
awards (excluding Restricted Stock and PSUs) will be governed by the
terms of the applicable plans and award agreements (but subject to Section 5(e)
hereof); and
	 
	 	(ix)	 	All other rights to compensation following termination under this Section 7(b)
payable by GCG or the Company to Executive, including benefits, shall be
determined in accordance with the plans, policies and practices of GCG and the
Company as then in effect.





     (c) Termination by Executive for Good Reason Not Related to a Change of
Control. Executive may terminate his employment hereunder for Good Reason, more than 3 months
prior to a Change of Control or more than 12 months following a Change of Control, upon 30 days’
written notice to GCG; provided, however, that, if GCG or the Company has corrected the basis for
such Good Reason within such 30-day period, Executive may not terminate his employment for Good
Reason with respect to the matters addressed in the written notice, and therefore Executive’s
notice of termination will automatically become null and void. At the time Executive’s employment
is terminated by Executive for Good Reason (i.e., at the expiration of such notice period), the
Term will terminate, all obligations of the Company and



-15-









 




Executive under Sections 1 through 5 of this Agreement will immediately cease (except as expressly
provided under this Section 7(c)), and GCG and the Company will pay Executive, and, subject to
Executive’s continuing compliance with the terms of this Agreement, Executive will be entitled to
receive, the payments and benefits specified in Section 7(b) above; provided, however, that if any
such payment or benefit is based on Base Salary or other level of compensation or benefits at the
time of Executive’s termination and if a reduction in such Base Salary or other level of
compensation or benefit was the basis for Executive’s termination for Good Reason, then the Base
Salary or other level of compensation in effect before such reduction shall be used to calculate
payments or benefits under this Section 7(c).




     (d) Termination by GCG Without Cause within 3 Months Prior to or 12 Months After a Change of
Control. The Company may terminate the employment of Executive hereunder without Cause,
simultaneously with or within 3 months prior to or 12 months following a Change of Control, upon at
least 30 days’ written notice to Executive. The foregoing notwithstanding, GCG may elect, by
written notice to Executive, to terminate Executive’s positions specified in Sections 1 and 3 and
all other obligations of Executive and GCG and the Company under Section 3 at a date earlier than
the expiration of such 30-day period, if so specified by GCG in the written notice, provided that
Executive shall be treated as an employee of GCG (without any assigned duties) for all other
purposes of this Agreement, including for purposes of Sections 4 and 5, from such specified date
until the expiration of such 30-day period. At the time Executive’s employment is terminated under
this Section 7(d) (i.e., at the expiration of such notice period), the Term will terminate, all
remaining obligations of GCG, the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease (except as expressly provided below), and GCG or the Company will
pay Executive, and, subject to Executive’s continuing compliance with the terms of this Agreement,
Executive will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Executive shall continue to receive payment of Executive’s Base Salary for 18 months
after termination;
	 
	 	(iii)	 	For a period of 18 months after Executive’s termination, Executive shall be paid
commissions pursuant to Section 4(c) hereof on any fee revenue derived from
business that was initiated before the date of termination, and shall be entitled to
payment of the Profit Participation under Section 4(b) for the year of termination
and continuing during the period of 18 months after Executive’s termination;
provided, however, that the Profit Participation payable for the calendar year in
which the 18-month period following termination ends will be prorated by
determining the amount for the full year multiplied by a fraction the numerator of
which is the number of days from January 1 of that year through the end of the
18-month period following Executive’s termination and the denominator of which
is 365. For purposes of this provision, business is “initiated” if there is written
documentation establishing a firm engagement for specified services of GCG on
a particular case, or otherwise documented under GCG’s current policies for
opening a case; and
	 
	 	(iv)	 	Executive and his eligible dependents shall be permitted to continue to
participate in all health, medical and dental plans and programs maintained by




-16-









 






	 	 	 	GCG or the Company for 18 months after termination and shall pay, at the same cost to
Executive as would apply if he remained an employee of GCG, all required contributions to maintain
such coverage, following which time Executive and his eligible dependents will be entitled to the
full COBRA continuation rights as if the end of such 18-month period was the date of Executive’s
termination of employment; provided that coverage hereunder will cease (except for entitlement to
rights under COBRA) at such time as coverage of the same general type is available from another
employer of Executive;
	 
	 	(v)	 	The True-Up Payment shall be payable in accordance with the formula in Section 4(d),
except that any payment to Executive under this Section 7(d) of an amount provided for or
calculated under Section 4(b) or 4(c) or in lieu of such an amount shall be treated as a payment
under Sections 4(b) and 4(c);
	 
	 	(vi)	 	The Restricted Stock granted under Section 5(a)(i) and not previously vested will
vest in full, and such vested shares will be delivered to Executive as promptly as
practicable;
	 
	 	(vii)	 	PSUs granted under Section 5(a)(ii) and not previously vested under Section
5(a)(ii) as a result of the Change of Control or forfeited will be deemed earned on
a pro rata basis and settled as specified under the subheading “Pro rata earning
of PSUs” in Section 5(a)(ii);
	 
	 	(viii)	 	All unvested stock options that have an exercise price less than the fair market value
of the Company’s common stock at the date of the Change of Control or the subsequent termination of
employment will become immediately vested, and in other respects the exercisability, termination
and forfeiture of outstanding stock options and other equity awards (excluding Restricted Stock and
PSUs) will be governed by the terms of the applicable plans and award agreements (but subject to
Section 5(e) hereof); and
	 
	 	(ix)	 	All other rights to compensation following termination under this Section 7(b) payable by
GCG or the Company to Executive, including benefits, shall be determined in accordance with the
plans, policies and practices of GCG and the Company as then in effect.




If any payment or benefit under this Section 7(d) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if the Company has purported to
reduce Base Salary or other level of compensation or benefits prior to such termination in a manner
that would constitute Good Reason, then the Base Salary or other level of compensation in effect
before such reduction shall be used to calculate payments or benefits under this Section 7(d).




     The parties hereto agree that the payments in a total amount not less than the amounts
provided under clauses (ii) and (iii) for the 12-month period following termination and the value
of benefits provided at Company and GCG cost under clause (iv) above represent fair compensation to
Executive for Executive’s non-competition obligations under Section 10(a).



-17-









 





     (e) Termination by Executive for Good Reason Within 3 Months Prior to or 12 Months After a
Change of Control. Executive may terminate his employment hereunder for Good Reason,
simultaneously with or within 3 months prior to or 12 months following a Change of Control, upon 30
days’ written notice to GCG; provided, however, that, if GCG or the Company has corrected the basis
for such Good Reason within such 30-day period, Executive may not terminate his employment for Good
Reason with respect to the matters addressed in the written notice, and therefore Executive’s
notice of termination will automatically become null and void. At the time Executive’s employment
is terminated by Executive for Good Reason (i.e., at the expiration of such notice period), the
Term will terminate, all obligations of the Company and Executive under Sections 1 through 5 of
this Agreement will immediately cease (except as expressly provided under this Section 7(e)), and
GCG and the Company will pay Executive, and, subject to Executive’s continuing compliance with the
terms of this Agreement, Executive will be entitled to receive, the payments and benefits specified
in Section 7(d) above; provided, however, that if any such payment or benefit is based on Base
Salary or other level of compensation or benefits at the time of Executive’s termination and if a
reduction in such Base Salary or other level of compensation or benefit was the basis for
Executive’s termination for Good Reason, then the Base Salary or other level of compensation in
effect before such reduction shall be used to calculate payments or benefits under this Section
7(e). Except for the foregoing, other provisions of Section 7(d) (including the final paragraph
thereof) apply equally under this Section 7(e).



     (f) Other Terms Relating to Certain Terminations of Employment. Whether a termination is
deemed to be at or following a Change of Control for purposes of Sections 7(b), (c), (d), or (e) is
determined at the date of termination, regardless of whether the Change of Control had occurred at
the time a notice of termination was given. In the event Executive’s employment terminates for any
reason set forth in Section 7(b) through (e), Executive will be entitled to the benefit of any
terms of plans or agreements applicable to Executive which are more favorable than those specified
in this Section 7 (except in the case of annual incentives in lieu of which amounts are paid
hereunder). Amounts payable under this Section 7 following Executive’s termination of employment,
other than those expressly payable on a deferred basis, will be paid as promptly as practicable
after such a termination of employment, and such amounts payable under Section 7(d) or 7(e) will be
paid in no event later than 15 days after Executive’s termination of employment unless not
determinable within such period, subject in all cases to Section 5(e).




	 	8.	 	Definitions Relating to Termination Events.





     (a) “Cause”. For purposes of this Agreement, “Cause” shall mean the following (subject to
Section 4(e)(iii)):




	 	(i)	 	Executive’s refusal or willful failure to substantially perform his duties (other than
any such failure resulting from incapacity due to physical or mental illness or disability), after
demand for substantial performance is delivered by GCG that specifically identifies the manner in
which GCG believes Executive has not substantially performed his duties;
	 
	 	(ii)	 	Executive’s dishonesty or misappropriation with regard to GCG or the Company which has a
significant adverse effect on the business or reputation of GCG or




-18-









 






	 	 	 	the Company, or fraud with regard to GCG or the Company or their assets or
business;
	 
	 	(iii)	 	Executive’s conviction of or the pleading of nolo contendere with regard to a
felony (other than a traffic violation) or any other crime involving, in the sole
discretion of the Company’s Board, moral turpitude;
	 
	 	(iv)	 	Executive’s material breach of fiduciary duty owed to GCG or the Company;
	 
	 	(v)	 	Executive’s gross negligence or material and willful misconduct with regard to
GCG or the Company or their assets, business or employees;
	 
	 	(vi)	 	The refusal of Executive to follow the lawful written directions of the Board of
GCG or the Board of the Company, or an Executive Vice President or higher
officer of the Company, which are consistent with the duties and authorities of
Executive set forth in this Agreement and not inconsistent with other written
directions of the Board of GCG or Board of the Company or such an Executive
Vice President or higher officer of the Company; or
	 
	 	(vii)	 	Any other material breach by Executive of a material provision of this Agreement;




provided, however, that GCG and the Company shall give written notice to Executive of the existence
of circumstances that would constitute Cause and, with respect to grounds other than under clause
(ii) or (iii) above, Executive shall have a period of 30 days in which to fully cure such Cause,
with Cause being deemed to exist only if it exists at the end of such cure period; and provided
further, that GCG and the Company shall be under no obligation to provide Executive with this
30-day period to cure if to do so would threaten to substantially impair the assets, business, or
intellectual or proprietary rights of GCG or the Company in the reasonable judgment of the Board of
the Company.



For purposes of this definition, no act or failure to act on the part of Executive shall be
considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without
reasonable belief (based upon an objective reasonable person standard) that Executive’s action or
omission was in the best interest of GCG and the Company. Any act or failure to act based upon
authority given pursuant to a resolution duly adopted by the GCG Board or Company Board or based
upon the advice of counsel for GCG or the Company shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of GCG and the Company.




     (b) “Change of Control”. For purposes of this Agreement, a “Change of Control” shall be
deemed to have occurred if, during the Term:




	 	(i)	 	Any “Person” (as defined in Section 3(a)(9) of the Securities Exchange Act of
1934 (the “Exchange Act”) as modified and used in Sections 13(d) and 14(d) of
the Exchange Act) other than (1) the Company or any of its subsidiaries, (2) any
trustee or other fiduciary holding securities under an employee benefit plan of the
Company or any of its subsidiaries, (3) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (4) any corporation
owned, directly or indirectly, by stockholders of the Company in substantially the




-19-









 






	 	 	 	same proportions as their ownership of the Company’s common stock, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing more than
25% of the combined voting power of the Company’s then outstanding voting
securities;
	 
	 	(ii)	 	During any period of not more than two (2) consecutive years, not including any period
prior to the effective date of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of the Company (the
“Company Board”), and any new director (other than a director designated by a
Person who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of this Section), whose election by
the Company Board or nomination for election by the Company’s stockholders
was approved in advance by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority thereof;
	 
	 	(iii)	 	There is consummated a merger or consolidation of the Company with any
corporation, other than (A) a merger of consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) 50% or more of the combined voting
power of the voting securities of the Company or such surviving or parent entity
outstanding immediately after such merger or consolidation or (B) a merger or
consolidation in which no Person acquires 25% or more of the combined voting
power of the Company’s or such surviving or parent entity’s then outstanding
securities;
	 
	 	(iv)	 	The stockholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets (or any transaction having a similar
effect), and thereafter the Company has substantially completed such liquidation
or sale or disposition of assets transaction; or
	 
	 	(v)	 	There is consummated a sale or exchange of securities of GCG (or a successor entity), a
merger or consolidation of GCG (or a successor entity) or a sale of all or substantially all of the
assets of GCG (or a successor entity) with the result
that, immediately after such transaction, the Company is not the direct or indirect
beneficial owner of an 80% equity interest in a business entity (whether GCG or
a successor entity) engaged in the business GCG (or the successor entity) was
engaged in prior to the transaction, with such equity interest comprising at least
80% of the voting power of all voting securities and a right to equity distributions
and distributions of remaining assets upon liquidation of at least 80%;






provided, however, that no event specified in clause (i) through (v) above shall be deemed to be a
Change of Control if Executive, apart from his position as a stockholder of the Company or officer
of GCG (or a successor entity), is a sponsor of the Person the actions of which substantially
resulted in the Change of Control (i.e., Executive initiates, and participates with the



-20-









 






	principal party (other than the Company and GCG) engaged in, the transaction resulting in a Change
of Control, unless such initiation was at the request of the Company).





     (c)“Compensation Accrued at Termination”. For purposes of this Agreement,
“Compensation Accrued at Termination” means the
following:







	 	(i)	 	The unpaid portion of Base Salary at the rate payable, in accordance with
Section 4(a) hereof, at the date of Executive’s termination of employment, pro
rated through such date of termination, payable in accordance with GCG’s
regular pay schedule;
	 
	 	(ii)	 	All earned and unpaid and/or vested and nonforfeitable amounts owing or
accrued at the date of Executive’s termination of employment under any
compensation and benefit plans, programs, and arrangements of GCG or the
Company (including any Profit Participation or commissions on fee revenue
earned through the date of termination but not yet paid and any PSUs vested at
the date of termination but not yet settled), payable in accordance with the terms
and conditions of the plans, programs, and arrangements (and agreements and
documents thereunder) pursuant to which such compensation and benefits were
granted or accrued; and
	 
	 	(iii)	 	Reasonable business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as
authorized under Section 5(c), in accordance GCG’s reimbursement policies as
in effect at the date of such termination.





     (d) “Disability”. For purposes of this Agreement, “Disability” means Executive’s
disability that would entitle Executive to receive full long-term disability benefits under GCG’s
or the Company’s long-term disability plans (whichever applies to Executive), provided that no
“Disability” shall be deemed to have arisen until any applicable waiting period for benefits has
been satisfied. At any time that GCG or the Company does not maintain such a long-term disability
plan, “Disability” shall have the meaning under the long-term disability policy presently covering
Executive.



     (e) “Good Reason”. For purposes of this Agreement (and subject to Section 4(e)(iii)), “Good
Reason” shall mean, without Executive’s express written consent, the occurrence of any of the
following circumstances unless such circumstances are fully corrected prior to the date of
termination specified in the notice of termination given in respect thereof:




	 	(i)	 	The assignment to Executive of duties inconsistent with Executive’s position and status
hereunder, or an alteration, adverse to Executive, in the nature of
Executive’s duties, responsibilities, and authorities, Executive’s positions or the
conditions of Executive’s employment from those specified in Section 3 or
otherwise hereunder; except the foregoing shall not constitute Good Reason if
occurring in connection with the termination of Executive’s employment for
Cause, Disability, death, or as a result of action by or with the consent of
Executive;




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	 	(ii)	 	A reduction by GCG or the Company (or a successor or permitted assignee of
GCG’s obligations under this Agreement) in Executive’s Base Salary or
compensation opportunities, in the aggregate, under this Agreement; or
	 
	 	(iii)	 	Any failure by GCG or the Company (or a successor or permitted assignee of
GCG’s obligations under this Agreement) to comply with any other material
provision of this Agreement;




provided, however, that an event will constitute Good Reason only if Executive has given notice of
termination within one year after the occurrence of the Good Reason event.





	 	9.	 	Excise Tax-Related Provisions.






     Notwithstanding anything to the contrary contained in this Agreement, to the extent that any
of the payments and benefits provided for under this Agreement or any other agreement or
arrangement between GCG and/or the Company and Executive
(collectively, the “Payments”) (i)
constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for
this Section 9, would be subject to the excise tax imposed by Section 4999 of the Code, then the
Payments shall be payable either (i) in full or (ii) as to such lesser amount which would result in
no portion of such Payments being subject to excise tax under Section 4999 of the Code; whichever
of the foregoing amounts, taking into account the applicable federal, state and local income taxes
and the excise tax imposed by Section 4999, results in Executive’s receipt on an after-tax basis,
of the greatest amount of economic benefits under this Agreement, notwithstanding that all or some
portion of such benefits may be taxable under Section 4999 of the Code. Unless Executive and GCG
otherwise agree in writing, any determination required under this Section shall be made in writing
by GCG’s independent public accountants (the
“Accountants”), whose determination shall be
conclusive and binding upon Executive and GCG for all purposes. For purposes of making the
calculations required by this Section 9, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Section 280G and 4999 of the Code. GCG, the Company and Executive
shall furnish to the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section 9. If this Section 9 is applied to
reduce an amount payable to Executive, and the Internal Revenue Service successfully asserts that,
despite the reduction, Executive has nonetheless received payments which are in excess of the
maximum amount that could have been paid to Executive without being subjected to any excise tax,
then, unless it would be unlawful for GCG to make such a loan or similar extension of credit to
Executive, Executive may repay such excess amount to GCG as though such amount constitutes a loan
to Executive made at the date of payment of such excess amount, bearing interest at 120% of



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the
applicable federal rate (as determined under section 1274(d) of the Code in respect of such
loan).




	 	10.	 	Non-Competition and Non-Disclosure; Executive Cooperation; Non- Disparagement;
Clawback.





     (a) Non-Competition. During the Term and, if Executive’s employment with GCG is
terminated by GCG for Cause or voluntarily by Executive without Good Reason (whether before or
after a Change of Control), for a period of 12 months after such termination of employment,
Executive will not enter into or engage in Competition (as defined below) with GCG or the Company
(unless consented to by the Company in writing).



“Competition” shall mean:





	 	(i)	 	participating, directly or indirectly, as an individual proprietor, partner,
stockholder, officer, employee, director, joint venturer, investor, lender,
consultant or in any capacity whatsoever (within the United States) in the class-action settlement or bankruptcy administration business, the loss adjusting
business, or any other business engaged in by GCG or the Company during the
Term or business opportunity being planned or pursued by GCG or the Company
at the time of Executive’s termination of employment unless Executive was not
aware of such planned or pursued business opportunity (collectively, the
“Business”), provided, however, that such participation shall not include the mere
ownership of not more than one percent of the total outstanding stock of a
publicly held company; or
	 
	 	(ii)	 	soliciting, diverting, taking away or attempting to take away, directly or indirectly,
for himself or on behalf of any other individual or company, any of GCG’s or the Company’s
contacts, customers or clients or the business or patronage of any
such contacts, customers or clients or in any way interfering with, disrupting or
attempting to disrupt any then existing relationships between GCG or the
Company and any of their contacts, customers or clients or other individuals or
companies with whom they deal or contacting or entering into any business
transaction with any such contacts, customers or clients or other individuals or
companies for any purpose related to the Business; or
	 
	 	(iii)	 	recruiting, soliciting or inducing of employee or employees of GCG or the
Company to terminate their employment with, or otherwise cease their
relationship with, GCG or the Company, as the case may be, or hiring or
assisting another person or company to hire any employee of GCG or the
Company. The foregoing notwithstanding, if requested by a company with which
Executive is not affiliated, Executive may serve as a reference for any person
who at the time of the request is not an employee of GCG or the Company.




It is understood that this Section 10(a) will not preclude or prevent Executive from working as a
lawyer or for a law firm if the activities of Executive in no way compete with the businesses




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conducted by GCG and the Company. Furthermore, this Section 10(a) does not preclude or prevent
Executive from working for a company engaged in a competitive business provided Executive does not
directly or indirectly provide any services to the competitive business.




     (b) Confidential Information. During and after the Term, Executive shall hold in a fiduciary
capacity for the benefit of GCG and the Company all Confidential Information. Except in the proper
performance of his duties under this Agreement, Executive shall not, without prior written consent
of GCG (which consent shall not unreasonably be withheld), unless compelled pursuant to the order
of a court or other governmental or legal body having jurisdiction over such matter, communicate or
divulge any Confidential Information to anyone other than GCG or the Company and those designated
by GCG or the Company. In the event Executive is compelled by order of a court or other
governmental or legal body to communicate or divulge any such information, knowledge or data to
anyone other than GCG or the Company and those designated by GCG or the Company, to the extent
possible under applicable law Executive shall promptly notify GCG of any such order and shall
cooperate fully with GCG in protecting such information.



     As used herein, Confidential Information means information including, but not limited to, technical
or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, product plans or lists of actual or potential
customers or suppliers which: (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Confidential Information also
includes data and information relating to the business of GCG or the Company which is or has been
disclosed to Executive which Executive became aware as a consequence of or through his relationship
to GCG or the Company and which has value to GCG or the Company and is not generally known to third
parties. Confidential Information shall not include any data or information that (i) has been
voluntarily or involuntarily disclosed to the public by GCG or the Company (except where such
public disclosure has been made by Executive without authorization); (ii) has been independently
developed and disclosed by others; (iii) that otherwise enters the public domain through lawful
means; (iv) is within Executive’s general business or industry knowledge, know-how, or expertise
(“Know-how”) and such Know-how is of a generic nature and not specifically pertaining to GCG or the
Company, including without limitation know-how obtained or developed in connection with Executive’s
employment by GCG or the Company.



     Upon termination of Executive’s employment with GCG, or at any time as GCG may
request, Executive will promptly deliver to GCG all documents (whether prepared by GCG, Executive
or a third party) relating to GCG or the Company or any of their business or property which he may
possess or have under his direction or control, including all documents and other media containing
information belonging or relating to GCG or the Company or their affiliates and information
relating to clients or customers and prospects of GCG or the Company or their affiliates. Executive
will not retain copies of such documents or information in any form.



     (c) Cooperation With Regard to Litigation. Executive agrees to cooperate with GCG and the
Company, during the Term and thereafter (including following Executive’s termination of employment
for any reason), by making himself available to testify on behalf of GCG or the



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Company or any of their subsidiaries or affiliates, in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, and to assist GCG and the Company, or any of
their subsidiaries or affiliates, in any such action, suit, or proceeding, by providing information
and meeting and consulting with the GCG or Company Board or its representatives or counsel, or
representatives or counsel to GCG or the Company, or any of their subsidiaries or affiliates, as
may be reasonably requested and after taking into account Executive’s post-termination personal and
business responsibilities and obligations; provided, however, that nothing in this provision shall
compel Executive to waive his privilege under the Fifth Amendment to the United States
Constitution. GCG and the Company agree to reimburse Executive, on an after-tax basis, for all
expenses actually incurred in connection with his provision of testimony or assistance, including
any lost compensation.




     (d) Non-Disparagement. Executive shall not, at any time during the Term and thereafter, make
statements or representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly, disparage or be
damaging to GCG or the Company, their subsidiaries or affiliates or their respective officers,
directors, employees, advisors, businesses or reputations. Likewise, during the Term and
thereafter, GCG and the Company, and their officers, directors, employees and other persons within
the control of GCG and the Company, including Executive’s successor in office, shall not make any
such statements or representations or take any action which may, directly or indirectly, disparage
or be damaging to Executive. Notwithstanding the foregoing, nothing in this Agreement shall
preclude the parties hereto or their successors from making truthful statements in the proper
performance of their jobs or that are required by applicable law, regulation or legal process, and
the parties shall not violate this provision in making truthful statements in response to
disparaging statements made by the other party.



     (e) Release of Employment Claims. Executive agrees, as a condition to receipt of any
termination payments and benefits provided for in Sections 6 and 7 herein (other than Compensation
Accrued at Termination) (the “Termination Benefits”), that he will execute a general release in the
standard form employed by GCG, releasing any and all claims against GCG, the Company, or their
officers, directors, employees or agents, arising out of Executive’s employment (other than
enforcement of this Agreement and other than with respect to vested rights or rights provided for
under any benefit plan or arrangement of GCG or the Company including any right to indemnification
by the Company or GCG that Executive may have).



     (f) Forfeiture and Clawback of Compensation Upon Violation of Covenants. The provisions of
Sections 6 and 7 notwithstanding, if Executive materially fails to comply with the provisions of
Section 10(a), (b), (c), or (d) during the Term or thereafter (a “Material Failure to Comply”),
Executive shall be subject to the forfeiture and clawback of compensation specified in this Section
10(f); provided, however, the remedies specified in this Section 10(f) shall not be triggered
unless the Company has given written notice to Executive within three months after the Company
became or should have become aware of the event or circumstances asserted to constitute a Material
Failure to Comply specify the event or circumstances that constitute grounds for the forfeiture and
clawback, and, if such Material Failure to Comply is capable of being cured, providing a period of
30 calendar days for Executive to cure such Material Failure to Comply. Upon the triggering of the
remedies under this Section 10(f), Executive shall forfeit all rights to future payment of
compensation under Section 6 and 7, and all outstanding stock options and all unvested PSUs,
Restricted Stock, and other equity awards under Company plans. In addition, compensation realized
by Executive shall be subject to clawback as follows:



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	 	(i)	 	Compensation Realized After Material Failure to Comply. All after-tax
compensation earned and paid under Sections 4, 5 (other than 5(b) and 5(c)), 6 or 7 since the
earliest applicable Material Failure to Comply and all after-tax compensation realized upon an
exercise, vesting of stock options, Restricted Stock, PSUs, or other equity awards (together with
any dividends or dividend equivalents paid or credited) since the earliest applicable Material
Failure to Comply must be repaid in full to the Company. In the case of options, Executive shall be
required to pay to the Company an amount equal to the after-tax difference between the aggregate
fair market value of the shares acquired upon exercise at the date of exercise and the exercise
price paid by Executive. In the case of other equity awards, Executive shall be required to pay to
the Company an amount equal to the aggregate after-tax fair market value of the shares deliverable
at the settlement date awards, less the amount paid by Executive, if any (together with any
dividends or dividend equivalents paid or credited to Executive since the earliest applicable
Material Failure to Comply).
	 
	 	(ii)	 	Compensation Realized Before the Material Failure to Comply. Executive shall be
required to repay 50% of the after-tax amount of cash compensation earned and paid to him under
Sections 4(b) and 4(c) in the 12-month period before the earliest applicable Material Failure to
Comply and 50% of the after-tax value realized upon exercise, vesting of stock options, Restricted
Stock, PSUs, or other equity awards (together with any dividends or dividend equivalents paid or
credited) in the 12-month period before the earliest applicable Material Failure to Comply. The
value realized in connection with equity awards shall be determined in the same manner as under
Section 10(f)(i). The after-tax amounts or value shall be calculated based on Executive’s top
marginal tax rates applicable to such income but taking into account the tax benefit to Executive,
if any, that would result from the clawback.





     (g) Survival. The provisions of this Section 10 shall survive the termination of the
Term and any termination or expiration of this Agreement.



     (h) Relief. Executive acknowledges that as a result of his employment by GCG,
Executive will obtain secret and confidential information as to GCG or the Company, that GCG or the
Company will suffer substantial damage which would be difficult to ascertain if Executive were to
enter into Competition with GCG and that because of the nature of the information that will be
known to Executive is necessary for GCG and the Company to be protected by the prohibition against
Competition set forth in this Section 10, as well as the restrictions on confidentiality set forth
herein. Executive acknowledges that the provisions of this Agreement are reasonable and necessary
for the protection of the business of GCG and the Company and that part of the compensation paid
under this Agreement (including the agreement to pay severance under Section 7 in certain
instances) is in consideration for the agreements in this Section 10. In the event of a breach or
potential breach of Section 10(a) or 10(b), Executive acknowledges that GCG and/or the Company will
be caused irreparable injury and that money damages may not be an adequate remedy and agrees that
GCG and/or the Company shall be entitled to injunctive relief (in addition to any other remedies at
law) to have the provisions of Section 10(a) and 10(b) enforced.



-26-









 






	 	11.	 	Governing Law; Disputes; Arbitration.





     (a) Governing Law. This Agreement is governed by and is to be construed, administered,
and enforced in accordance with the laws of the State of New York, without regard to conflicts of
law principles. If under the governing law, any portion of this Agreement is at any time deemed to
be in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent necessary to conform thereto
or, if that is not possible, to be omitted from this Agreement. The invalidity of any such portion
shall not affect the force, effect, and validity of the remaining portion hereof. If any court
determines that any provision of Section 10 is unenforceable because of the duration or geographic
scope of such provision or because it extends over too great a range of activities, it is the
parties’ intent that such court shall modify and limit the duration, geographic scope, and/or range
of activities specified in the provision, as the case may be, to the extent necessary to render the
provision enforceable and, in its modified and limited form, such provision shall be enforced.



     (b) Arbitration. In the event of any dispute or claim relating to or arising out of this
Agreement, such dispute shall be fully, finally and exclusively resolved by a panel of three
neutral arbitrators to be mutually agreed upon by the parties. Such arbitration will be decided
under the employment dispute resolution rules of the American Arbitration Association and will be
held in New York, New York. If the parties cannot agree upon such arbitrators within 20 days after
submission of a party’s request for arbitration in writing, the arbitrators will be selected in
accordance with the procedures of the American Arbitration Association. The parties agree that the
existence, content and result of any arbitration proceeding shall be confidential, except to the
extent that GCG or the Company or Executive determines it is required to disclose such matters in
accordance with applicable laws. Each party shall be responsible for payment of its own attorneys’
fees and expense in any such arbitration regardless of the outcome of the arbitration.




	 	12.	 	Miscellaneous.





     (a) Integration. This Agreement cancels and supersedes any and all prior agreements
and understandings between the parties hereto with respect to the employment of Executive by GCG,
any parent or predecessor company, and subsidiaries of GCG or the Company during the Term, except
for contracts relating to compensation under executive compensation and employee benefit plans
(including equity or equity-based awards) of the Company and its subsidiaries and rights and
benefits referred to in clause (iii) of the last sentence of Section 1. This Agreement constitutes
the entire agreement among the parties with respect to the matters herein provided (except for
Executive’s rights under other agreements as referenced in the preceding sentence and any separate
rights to indemnification Executive may have), and no modification or waiver of any provision
hereof shall be effective unless in writing and signed by the parties hereto. Executive shall not
be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit
received or receivable by Executive under such prior agreements and understandings or under any
benefit or compensation plan of GCG or the Company.



     (b) Successors; Transferability. GCG and the Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise, and whether or not the
corporate existence of GCG continues) to all or substantially all of the business and/or



-27-









 




assets of GCG to expressly assume and agree to perform this Agreement in the same manner and to the
same extent that GCG and the Company would be required to perform it if no such succession had
taken place. As used in this Agreement, “GCG” and “Company” shall mean each of those entities as
hereinbefore defined and any successor to the business and/or assets of such entity which assumes
and agrees to perform this Agreement by operation of law or otherwise and, in the case of an
acquisition of GCG or the Company in which the corporate existence of GCG or the Company continues,
the ultimate parent company following such acquisition. Subject to the foregoing, GCG or the
Company may transfer and assign this Agreement and its rights and obligations hereunder to any
successor to all or substantially all of the business and/or assets of GCG. Neither this Agreement
nor the rights or obligations hereunder of the parties hereto shall be transferable or assignable
by Executive, except in accordance with the laws of descent and distribution or as specified in
Section 12(n).




     (c) Right of First Refusal. Executive shall have a right of first refusal with respect to any
sale or disposition of GCG by the Company or of all or substantially all of the assets of GCG by
GCG; provided that other executives of GCG may be granted like rights of first refusal that may be
exercised jointly with the right granted hereunder to Executive. In the event any such transaction
with a third party is proposed by the Company or GCG, Executive shall be given notice of the
proposed transaction and its terms and shall have a period of 60 days in which Executive (together
with any other GCG executive exercising such a right jointly) may purchase GCG on like terms;
provided, however, that if any credit is to be extended to the purchaser, Executive must present
creditworthiness equivalent to that of the third party.



     (d) Notices. Whenever under this Agreement it becomes necessary to give notice, such notice
shall be in writing, signed by the party or parties giving or making the same, and shall be served
on the person or persons for whom it is intended or who should be advised or notified, by Federal
Express or other similar overnight service or by certified or registered mail, return receipt
requested, postage prepaid and addressed to such party at the address set forth below or at such
other address as may be designated by such party by like notice:



     If to the Company and GCG:


CRAWFORD & COMPANY

5620 Glenridge Drive, N.E.

Atlanta, GA 30342

Attention: General Counsel




     and


THE GARDEN CITY GROUP, INC.

105 Maxess Road

Melville, NY

Attention: General Counsel




     If to Executive:


David A. Isaac

213 Overlook Road

New Rochelle, NY 10804




-28-









 








     with copy to:


Paul M. Ritter, Esq.

Kronish Lieb Weiner & Hellman LLP

1114 Avenue of the Americas

New York, NY 10036-7798

(212) 479-6000



If the parties by mutual agreement supply each other with fax numbers for the purposes of providing
notice by facsimile, such notice shall also be proper notice under this Agreement. In the case of
Federal Express or other similar overnight service, such notice or advice shall be effective when
sent, and, in the cases of certified or registered mail, shall be effective two days after deposit
into the mails by delivery to the U.S. Post Office.




     (e) Reformation. The invalidity of any portion of this Agreement shall not be deemed
to render the remainder of this Agreement invalid.



     (f) Headings. The headings of this Agreement are for convenience of reference only
and do not constitute a part hereof.



     (g) No General Waivers. The failure of any party at any time to require performance
by any other party of any provision hereof or to resort to any remedy provided herein or at law or
in equity shall in no way affect the right of such party to require such performance or to resort
to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such provisions. No such
waiver shall be effective unless in writing and signed by the party against whom such waiver is
sought to be enforced.



     (h) No Obligation To Mitigate. Executive shall not be required to seek other employment or
otherwise to mitigate Executive’s damages upon any termination of employment, and amounts of
compensation and benefits received by Executive from any other employer shall not reduce the
obligations of the Company or GCG hereunder; provided, however, that, to the extent Executive
receives from a subsequent employer health or other insurance benefits that are substantially
similar to the benefits referred to in Section 5(b) hereof, any such benefits to be provided by GCG
or the Company to Executive following the Term shall be correspondingly reduced.



     (i) Offsets; Withholding. The amounts required to be paid by GCG or the Company to Executive
pursuant to this Agreement shall not be subject to offset for any amounts that are owed to GCG or
the Company by Executive other than such amounts owed due to his receipt of funds as a result of
his fraudulent activity or under the provisions of Section 10(f). The foregoing and other
provisions of this Agreement notwithstanding, all payments to be made to Executive under this
Agreement, including under Sections 6 and 7, or otherwise by the Company, will be subject to
withholding to satisfy required withholding taxes and other required deductions. In this regard,
Executive shall be entitled to elect to have the Company withhold shares of common stock
deliverable upon exercise of stock options or in settlement of other equity awards to satisfy
mandatory tax withholding obligations, subject to the approval of the Company which shall not be
unreasonably withheld.



-29-









 





     (j) Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of Executive, his heirs, executors, administrators and beneficiaries, and shall be binding
upon and inure to the benefit of GCG, the Company and their successors and assigns.



     (k) Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the same instrument.



     (I) Due Authority and Execution. The execution, delivery and performance of this Agreement
have been duly authorized by GCG and the Company, and this Agreement represents the valid, legal
and binding obligation of the Company, enforceable against the Company according to its terms.



     (m) Representations of Executive. Executive represents and warrants to the Company that he has
the legal right to enter into this Agreement and to perform all of the obligations on his part to
be performed hereunder in accordance with its terms and that he is not a party to any agreement or
understanding, written or oral, which prevents him from entering into this Agreement or performing
all of his obligations hereunder. In the event of a breach of such representation or warranty on
Executive’s part or if there is any other legal impediment which prevents him from entering into
this Agreement or performing all of his obligations hereunder, the Company shall have the right to
terminate this Agreement forthwith in accordance with the same notice and hearing procedures
specified above in respect of a termination by the Company for Cause pursuant to Section 7(a) and
shall have no further obligations to Executive hereunder. Notwithstanding a termination by the
Company under this Section 12(m), Executive’s obligations under Section 10 of this Agreement shall
survive such termination.



     (n) Beneficiaries. Executive shall be entitled to designate (and change, to the extent
permitted under applicable law) a beneficiary or beneficiaries to receive any compensation or
benefits provided hereunder following Executive’s death.




	 	13.	 	Indemnification.





     (a) Indemnification. GCG, to the fullest extent permitted or authorized by the laws of the
State of Delaware that govern indemnification of officers and directors of corporations, shall
indemnify Executive if he is or was involved in any manner (including, without limitation as a
party or witness) or is threatened to be made so involved in any threatened, pending or completed
investigation, claim, action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, any action, suit or proceeding by or in the right of
GCG to procure a judgment in its favor (a “Proceeding”) by reason of the fact that Executive is or
was a director, officer, employee or agent of (a) GCG, (b) a corporation in which GCG had at the
time of such service, directly or indirectly, a 50% or greater equity interest; (c) a
not-for-profit corporation if such service is at the request of GCG; or (d) any other corporation,
partnership, joint venture, trust or other enterprise (including, without limitation, any employee
benefit plan) if such service is at the request of GCG, against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by
Executive in connection with such Proceeding.



-30-









 





     (b) Advances. GCG shall advance to the Executive, to the extent permitted by
Delaware law that governs indemnification of officers and directors of corporations, all reasonable
costs and expenses incurred by him in connection with a Proceeding within 20 days after receipt by
GCG of a written request, with appropriate documentation, for such advance. Executive hereby agrees
to repay the amount of any advance, if it shall ultimately be determined that she is not entitled
to be indemnified against such costs and expenses. All payments made to or on behalf of Executive
pursuant to this Section 13 will be deemed advances for purposes of this Section 13.



     (c) Company Indemnification. The Company, to the fullest extent permitted or
authorized by the laws of the State of Georgia that govern indemnification of officers, directors
and employees of corporations, shall indemnity Executive as if he were an officer of the Company.



     (d) Scope of Indemnification. The provisions of this Section 13 shall cover
Proceedings whether now pending or hereafter commenced and shall be retroactive to cover acts or
omissions or alleged acts or omissions relating to GCG or any of its affiliates that heretofore
have taken place during Executive’s tenure with GCG. Any provision contained herein
notwithstanding, this Agreement shall not limit or reduce any rights of Executive to
indemnification pursuant to applicable law or any other indemnification agreement, arrangement,
policy or other commitment of the Company or GCG as may be from time to time in effect.



     IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company has caused this instrument
to be duly executed as of the date first above written.



	 	 	 	 	 
	 	 	CRAWFORD & COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Kevin B. Frawley
	 

	 	 	 	 
	 

	 	 	 	Name: Kevin B. Frawley
	 

	 	 	 	Title: EXEC. VICE-PRESIDENT
	 
	 	 	 	 
	 	 	THE GARDEN CITY GROUP, INC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Neil L. Zola
	 

	 	 	 	 
	 

	 	 	 	Name: Neil L. Zola
	 

	 	 	 	Title: President
	 
	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 
	 	 	/s/ David A. Isaac
	 	 	 
	 	 	David A. Isaac







-31-









 








ATTACHMENT TO EMPLOYMENT AGREEMENT




THE GARDEN CITY GROUP, INC.

Subsidiary of Crawford & Company




Performance Shares Award Accounting Impact Summary




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Pretax
Income Growth over $9.239 million “Base”*	 
	 	 	Minimum	 	 	Target	 	 	Stretch	 
	Performance Period	 	10% Rate	 	 	15% Rate	 	 	20% Rate	 
	2006
	 	$	10.163	 mil.	 	$	10.625	 mil.	 	$	11.087	 mil.
	2007
	 	 	11.179	 	 	 	12.219	 	 	 	13.304	 
	2008
	 	 	12.297	 	 	 	14.051	 	 	 	15.965	 
	 
	 	 	 	 	 	 	 	 	 
	Total Pretax Income
	 	$	33.639	 	 	$	36.896	 	 	$	40.356	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Incremental Pretax Income
over $27,717 “Base”1
	 	 	5.922	 mil.	 	 	9.178	 mil.	 	 	12.639	 mil.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Number of Shares Vested
	 	 	225,000	 	 	 	450,000	 	 	 	450,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	112.500	 
	Three Year Charge to Earnings
at $7 per share
	 	$	1.575	 mil.	 	$	3.150	 mil.	 	$	3.150 	 mil.
	 
	 	 	 	 	 	 	 	 	 	 	0.788	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Charge as Percent of
Incremental Pretax Income
	 	 	26.60	%	 	 	34.32	%	 	 	31.15	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	2009
	 	$	13.527	 mil.	 	$	16.159	 mil.	 	$	19.158	 mil.
	2010
	 	 	14.880	 	 	 	18.583	 	 	 	22.990	 
	 
	 	 	 	 	 	 	 	 	 
	Total Pretax Income
	 	$	28.407	 mil.	 	$	34.742	 mil.	 	$	42.148	 mil.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Cumulative Five Year Total
Pretax Income
	 	$	62.046	 mil.	 	$	71.637	 mil.	 	$	82.504	 mil.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Incremental Pretax Income
over $48,195 “Base”2
	 	$	17.788	 mil.	 	$	25.442	 mil.	 	$	36.309	 mil.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Cumulative Number of Shares Vested
	 	 	375,000	 	 	 	750,000	 	 	 	750,000	 
	 
	 	 	 	 	 	 	 	 	 	 	187,500	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Five Year Charge to Earnings
	 	$	2.625	 mil.	 	$	5.250	 mil.	 	$	5.250	 mil.
	 
	 	 	 	 	 	 	 	 	 	 	1.313	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Charge as Percent of
Incremental Pretax Income
	 	 	14.76	%	 	 	20.64	%	 	 	18.08	%
	 
	 	 	 	 	 	 	 	 	 








 




	 	 	 
	*	 	Pretax income based on May 2005 forecast and business plan.
	 
	1	 	$9.239 million times 3 for 3 year performance
	 
	2	 	$9.239 million times 5 for 5 year performance