ex10-4.htm


     

    Exhibit
10.4

     

     

    


     

     

    EMPLOYMENT
AGREEMENT

     

     

    This
Employment Agreement (this “Agreement”) by and between Employers Insurance
Company of Nevada, a Nevada corporation (the “Company”) and Martin J. Welch (the
“Employee”) is entered into as of the 17th day of December, 2008, effective
as of January 1, 2009 (the “Effective Date”).

     

     

    RECITALS

     

     

    A. The Employee has knowledge and
experience applicable to the position of President and Chief Operating
Officer.

     

     

    B. The Company desires to continue to
employ the Employee to perform certain services for the Company, its parent, if
any, and their respective subsidiaries and affiliates (the “Company
Affiliates”), as may be required or requested of the Employee in his position as
President and Chief Operating Officer, and the Employee desires to continue to
be so employed by the Company and to perform such services for the Company and
the Company Affiliates.

     

     

    In
consideration of the premises above and mutual covenants and promises set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are mutually acknowledged, the parties agree as follows:

     

     

    TERMS

     

     

    
      	
              1.

            	
              Employment.

            


    

     

     

    The Company agrees to continue to
employ the Employee and the Employee accepts such continued employment upon the
terms and conditions specified herein. The Employee agrees to continue to devote
substantially all of his time and effort during working hours in the performance
of the duties called for herein and agrees that any other non-employment related
duties (i.e., industry related groups, service on boards, etc.) will not be
allowed to materially interfere with the performance of the duties called for
herein.

     

     

    
      	
              2.

            	
              Term.

            


    

     

     

    The term of this Agreement shall
commence on the Effective Date, and continue for three (3) years (the “Initial
Term”), until December 31, 2011, and, thereafter, shall automatically renew for
successive two (2) year periods (each, an “Additional Term;” the Initial Term
and any Additional Terms, collectively the “Term”), unless either party gives
written notice to the other no later than six (6) months prior to expiration of
the Initial Term or any Additional Term, as applicable, of an intent not to
renew this Agreement; subject, however to earlier termination of the Employee's
employment with the Company in accordance with this Agreement (the “Termination
Date”).  The expiration of this Agreement at the end of the Term, in
and of itself, 

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    shall
not constitute, nor be construed or interpreted as, a termination of the
Employee's employment that would make him eligible for benefits or payments
under Section 7 below.  This Agreement shall expire upon the
termination of the Employee's employment for any reason, subject to the
provisions of subsection 10(h) below.

     

     

    
      	
              3.

            	
              Services and
      Duties.

            


    

     

     

    The Employee shall continue to serve as
President and Chief Operating Officer and shall perform such duties as may be
assigned by the Chief Executive Officer from time to time.  At the
request of the Board of Directors of the Company (the “Board”), the Employee
shall also serve as a director of the Company and/or one or more of the Company
Affiliates at no additional compensation.  The Employee agrees that
upon the termination of his employment with the Company, he shall resign from
the Board and any and all boards of the Company Affiliates effective on the
Termination Date.

     

     

    
      	
              4.

            	
              Compensation and
      Benefits.

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              During the term of this Agreement,
      the Company shall pay to the Employee an annual salary of not less than
      $420,000 (“Base Salary”), which amount shall be paid
      according to the Company’s regular payroll practices. The
      Company agrees to
      review the Base Salary on an annual basis and adjust the salary to comply
      with the executive compensation policy in effect at the time of the
      review.  Any increase made to the annual salary will establish
      the new Base Salary for the Employee.  All payments made
      pursuant to this Agreement, including but not limited to this subsection
      4(a), shall be reduced by and
      subject to withholding for all federal, state, and local taxes and any
      other withholding required by applicable laws and regulations.

            


    

     

     

    
      	
               
      

            	
              (b)

            	
              The Company will provide an annual incentive (the
      “Annual
      Incentive”) to the
      Employee during the Term based on the Employee’s and the Company’s performance, as determined by
      the Board (or a committee thereof) in its sole
      discretion.  In this regard, the Board (or a committee thereof)
      shall set
      an annual
      incentive target of
      not less than seventy
      percent (70%) of Base Salary, and the Annual Incentive shall be paid in
      accordance with the Company’s regular practice for its senior
      officers, as in effect from time to time. To the extent not duplicative of
      the specific benefits provided herein, the Employee shall be eligible to
      participate in all incentive compensation, retirement, supplemental
      retirement, and deferred compensation plans, policies and
      arrangements that are
      provided generally to other senior officers of the Company at a level (in
      terms of the amount and types of benefits and incentive compensation that
      the Employee has the opportunity to receive and the terms thereof)
      determined in the sole discretion of the Board (or a committee
      thereof).

            


    

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              The Employee agrees that the
      amounts payable and benefits provided under this Agreement, including but
      not limited to any amounts payable or benefits provided under this Section 4 and Section 7 constitute
      good, valuable and
      separate consideration for the non-competition, assignment and release of
      liability provisions contained herein. The Employee acknowledges that he
      is aware of the effect of the non-competition, assignment and release of
      liability provisions contained herein and agrees that
      the amounts payable and benefits provided under this Agreement, including
      but not limited to the amounts payable and benefits provided under
      this Section 4 and
      Section 7, if
      any, constitute
      sufficient consideration for his agreement to these
      provisions.

            


    

     

     

    
      	
               
      

            	
              (d)

            	
              In addition to the compensation
      called for in this Agreement, the Employee shall be entitled to
      receive any and all employee benefits and perquisites generally
      provided from time to time to other similarly situated officers
      of the
      Company as well as the benefits and
      perquisites listed on “Exhibit A” attached hereto and incorporated
      herein by this reference.

            


    

     

     

    
      	
              5.

            	
              Insurance.

            


    

     

     

    The Employee agrees to submit to a
physical examination at a reasonable time as requested by the Company for the
purpose of the Company’s obtaining life insurance on the life of the Employee
for the benefit of the Company; provided, however, that the Company shall bear
the costs for such examinations and shall pay all premiums on any life insurance
obtained as a result of such examinations.  The Employee further
agrees to submit to drug testing in accordance with the Company's policies and
procedures.

     

     

    
      	
              6.

            	
              Termination.

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              The Company, at any time, may
      terminate this Agreement and the Employee's employment
      immediately
      for “Cause”.  Cause is defined
      as:

            


    

     

    
      	
               
      

            	
              (i)

            	
              A material breach of this
      Agreement by the
      Employee;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Failure or inability of
      the Employee to obtain or maintain any
      required licenses or
certificates;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Willful violation by the Employee of any law, rule or
      regulation, including
      but not limited
      to any material
      insurance law or regulation, which violation may, as determined by the
      Company, adversely affect the ability of the Employee to perform his duties
      hereunder or may subject the Company to liability or negative publicity; or

            


    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (iv)

            	
              Conviction or commission of or the entry of a guilty plea or plea of no
      contest to
      any felony or
      to any other crime involving moral
      turpitude.

            


    

     

     

    
      	
               
      

            	
              (b)

            	
              The Employee may terminate this
      Agreement and his
      employment with the Company immediately for “Good Reason,” which shall mean the occurrence
      of any of the events described in subsections 6(b)(i),
      (ii) or (iii) below with respect to which the Employee
      has notified the Company of the existence thereof within no more than
      ninety (90) days of the initial existence thereof and which is not cured by the Company
      within thirty (30) days of the Company’s receipt of written notice from the
      Employee of the events alleged to constitute such Good Reason:

            


    

     

    
      	
               
      

            	
              (i)

            	
              A material diminution in the
      Employee’s base compensation;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              A material diminution in the Employee’s authority, duties or
      responsibilities;
  or

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Any other action or inaction that
      constitutes a material breach by the Company of this Agreement (as may be amended
      from time to time).

            


    

     

     

    In addition, the Employee may terminate
this Agreement and his
employment with the Company at any time for any other reason or for no reason,
but such termination shall not constitute termination for “Good Reason.”

     

     

    
      	
               
      

            	
              (c)

            	
              The Company may also terminate
      this Agreement and
      the Employee's employment upon the occurrence of one or more of the
      following events or
      reasons, subject to applicable
      law (or, in the case
      of subsection 6(c)(i) below, termination of this Agreement and the
      Employee's employment will be automatic):

            


    

     

    
      	
               
      

            	
              (i)

            	
              Death of the Employee;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              The Employee is deemed to be disabled in accordance
      with the policies of the Company or the law or if the Employee is unable to perform the
      essential job functions of the Employee’s position with the Company, with
      or without reasonable accommodation, for a period of more than 100 business days in any 120
      consecutive business day period. The Employee is entitled to any and
      all short term or long term disability programs, like any other employee,
      in accordance with the terms of such programs and the
      policies of the
      Company;
  or

            


    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (iii)

            	
              At any time for any other reason or no reason in the sole and absolute
      discretion of the Company.

            


    

     

    
      	
              7.

            	
              Payments Upon
      Termination.

            


    

     

    
      	
               
      

            	
              (a)

            	
              Qualifying
      Termination and Severance Pay.  If the Company terminates the Employee's employment prior to the expiration of the Term but other than during the CIC Period (as defined
      below) for any reason
      other than as
      specified above in
      subsection 6(a) for Cause, subsection 6(c)(i) by reason of the death of the Employee, or subsection 6(c)(ii) for disability, or if the
      Employee terminates his employment for Good Reason pursuant to subsection 6(b), the Employee shall receive
      the following severance pay (the “Severance Pay”):

            


    

     

    
      	
               
      

            	
              (i)

            	
              In lieu of any further salary
      payments to the Employee for periods subsequent to the Termination Date and in lieu of any severance benefit otherwise
      payable to the Employee, an amount equal to one (1) times Base Salary, payable in equal bi-weekly installments on
      the Company’s regular payroll
      dates as in effect on
      such Termination Date, for twelve (12) months following the Termination Date, commencing with the payroll date applicable to the first full payroll period
      following the Termination Date; provided, however, that such
      payments shall be delayed to the extent required under Section
      25 below.  The payments shall be subject to normal payroll
      deductions.

            


    

     

     

    
      	
               
      

            	
              (ii)

            	
              Continuation of the medical, dental and
      vision insurance
      coverage in effect on the Termination Date for a period of twelve (12) months following the Termination Date
      with the Company
      paying the employer portion of the premium and the Employee paying
      the employee portion, including dependents if applicable, of the premium during
      such twelve (12) month period, provided
      that the Employee elects to continue such
      insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”). The Employee is solely responsible for
      taking the actions necessary to exercise his rights under COBRA for the
      insurance coverage the Employee has in effect,
      including coverage
      for dependents if
      applicable, on the
      Termination Date.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Severance
      Pay as Liquidated Damages.  The parties agree, in the event of
      a material
      breach of this
      Agreement by the Company, following which the Employee
      terminates his employment, that actual damages are
      speculative and that the amount of the Severance
      Pay or, if applicable, the CIC Severance
      Pay (as defined below) set forth herein is liquidated
      damages and is a reasonable estimate of what damages would be for a
      material breach of this
      Agreement.

            


    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (c)

            	
              Conditions
      to Severance Pay,  CIC
      Severance
      Pay
      or Non-Competition
      Pay.  The Employee agrees and acknowledges
      that the following must be satisfied by the Employee before he is entitled
      to the Severance Pay or, if applicable, the CIC Severance
      Pay provided for
      herein or the
      Non-Competition
      Pay as defined and described in subsection 10(a):

            


    

     

    
      	
               
      

            	
              (i)

            	
              That the Employee returns any and all equipment, software,
      data, property and information of the Company and the Company
      Affiliates, including
      documents and records or copies thereof relating in any way to
      any proprietary
      information of the Company or any of the Company
      Affiliates whether prepared by the Employee
      or any other person or entity.  That the Employee further agrees that he
      shall not retain any proprietary information of the Company or any of the Company Affiliates after the Termination Date;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              That the Employee executes a Global Release of Liability, in
      a form to be
      determined by the Company in its sole discretion, which releases the Company and the Company
      Affiliates from liability for any and all
      claims, complaints and causes of
      action, whether based in law or equity,
      arising from, related
      to or associated with
      the Employee’s employment by the Company or under this Agreement and that such release has become
      effective and non-revocable.  That the Employee further acknowledges and
      agrees that he has not made and will not make any assignment of any claim,
      cause or right of action, or any right of any kind whatsoever, arising
      from, related
      to or associated with
      the employment of the
      Employee by the
      Company;
      and

            


    

     

    
      	
               
      

            	
              (iii)

            	
              That the Employee reaffirms the covenants contained herein,
      in writing, including, but not limited to, the covenants set forth in Section 10.
      

            


    

     

     

    Notwithstanding anything in this
Agreement to the contrary,
in any case where the first and last days of the applicable release and nonrevocability periods provided for in the Global Release of
Liability (the “Applicable Release Period”) are in two separate taxable years, any
payments required to be made to the Employee under this Agreement that are treated as deferred compensation for purposes
of Section 409A (as defined below) shall be made in the later taxable year,
as soon as practicable, but
in no event later than thirty (30) days following the conclusion of the
Applicable Release Period.

     

     

    
      	
               
      

            	
              (d)

            	
              Voluntary
      Termination
      by the Employee.  The Employee may terminate
      his employment and
      this Agreement for
      reasons other than those identified in subsection 6(b) upon not less than
      sixty (60) days prior written notice.
       If the Employee terminates
      his employment and
      this Agreement pursuant to this
      subsection
      7(d), he shall be entitled
      only to the
      following:

            


    

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (i)

            	
              Any unpaid salary through the
      Termination
      Date;
      and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Payment for any accrued and unused
      vacation as of the
      Termination Date.

            


    

     

    
      	
               
      

            	
              (e)

            	
              Qualifying
      Change in Control Termination.  If, before the expiration of the
      Term, the Company terminates the
      Employee's employment within the period commencing six (6) months prior
      to and ending eighteen (18) months following a Change in
      Control (as defined
      below), such period referred to herein
      as the “CIC Period,” for any reason other than as specified above in subsection
      6(a) for Cause, subsection 6(c)(i) for the death of the Employee, or subsection 6(c)(ii) for disability, or if the
      Employee terminates his employment for Good Reason pursuant to subsection 6(b), the Employee shall receive
      the severance pay set
      forth in subsections (i) and (ii) below (the “CIC Severance Pay”), provided that if the
      Employee’s employment is
      terminated during the
      six (6) month period
      prior to a Change in
      Control, the Employee shall be entitled to CIC Severance
      Pay only if such termination (x) was by the Company other than for Cause but
      at the request or direction of
      any person that has entered into an agreement
      with the Company the consummation of which would constitute a Change in Control,
      (y) was by the Employee for Good Reason and the circumstance or event
      that constitutes Good
      Reason occurred at the request or direction of such
      person or (z) was by the Company without Cause and
      the Employee reasonably demonstrates that such termination
      was otherwise in
      connection with or in anticipation of a Change in Control; and if the Employee is not
      entitled to CIC Severance Pay hereunder, then the Employee's termination of employment will not be deemed to
      have occurred during the CIC Period for purposes of
      subsection 7(a):

            


    

     

    
      	
               
      

            	
              (i)

            	
              In lieu of any further salary
      payments to the Employee for periods subsequent to the Termination Date and in lieu of any severance
      benefit otherwise payable to the Employee, a lump sum cash payment equal to two (2) times the sum of (A) Base Salary
      and (B) the average
      of the annual bonus
      amounts earned by the Employee for the three (3) years preceding the year in which the Change in Control occurs; provided, however, that if the
      Termination Date occurs prior to January 1, 2010, then (B)
      shall instead
      be the average of the
      annual bonus amounts earned by the Employee in 2007 and 2008.  Such payment shall be made as soon
      as practicable (but in no event later than sixty (60) days) following the Termination Date; provided, however, that such payments
      shall be delayed to the extent required under Section 25 below;
  and

            


    

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (ii)

            	
              Continuation of the medical, dental and
      vision insurance coverage in effect on
      the Employee's
      Termination Date for a period of
      eighteen (18) months following the Termination Date
      with the Company
      paying the employer portion of the premium and the Employee paying the
      employee portion, including dependents if applicable, of the premium during
      such eighteen
      (18)-month period, provided that the
      Employee elects to
      continue such insurance coverage under COBRA. The Employee is solely
      responsible for taking the actions necessary to exercise his rights under
      COBRA for the insurance coverage the Employee has in effect, including
      coverage for
      dependents if
      applicable, on the
      Termination Date.

            


    

     

    
      	
               
      

            	
              (f)

            	
              Definition
      of Change in Control.
       For purposes of this Agreement,
      a “Change in Control” shall be deemed to have occurred
      if the event set forth in any one of the following paragraphs shall have
      occurred:

            


    

     

    
      	
               
      

            	
              (i)

            	
              Any one person, or more
      than one person
      acting as a group, acquires ownership of stock of the Company that, together with stock held by
      such person or group, constitutes more than 50% of the total fair market
      value or total voting power of the stock of the Company;
    or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Any one person, or more than one person acting
      as a group, acquires (or has acquired during the twelve (12)-month period ending on the date
      of the most recent acquisition by such person or persons) ownership of
      stock of the Company possessing 35% or more of the total
      voting power of the
      stock of the
      Company;
      or

            


    

     

    
      	
               
      

            	
              (iii)

            	
              A majority of members of the
      Board is replaced during any
      twelve (12)-month period by directors whose
      appointment or election is not endorsed by a majority of the members of
      the Board before the date of the
      appointment or
      election;
      or

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Any one person or group acquires (or has
      acquired during the immediately preceding twelve (12)-month period ending
      on the date of the most recent acquisition) assets of the Company with an
      aggregate gross fair market value of not less than forty percent (40%) of the
      aggregate gross fair market value of the assets of the Company immediately
      prior to such acquisition.  For this purpose, gross fair market
      value shall mean the fair value of the affected assets determined without
      regard to any liabilities associated with
      such assets.

            


    

     

     

    Notwithstanding the foregoing, (1) a
“Change in Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated


     

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    transactions immediately following which
the holders of the common
stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity that owns all or substantially all of the
assets of the Company immediately following such transaction or
series of transactions, and (2) a “Change in Control” shall not be deemed to have occurred as result of
any secondary offering of
Company common stock to the general public through a registration statement
filed with the Securities
and Exchange Commission.  The Board shall determine whether a
Change in Control has occurred hereunder in a manner consistent with the
provisions of Section 409A.

     

     

    
      	
               
      

            	
              (g)

            	
              No
      Duplication of Payments or Benefits.  Notwithstanding any
      provision of
      this
      Agreement to the
      contrary, the
      Employee shall not be eligible to receive any payments or benefits under
      both subsections 7(a) and 7(e); but rather, to the extent the
      conditions set forth in subsection 7(a) and subsection 7(e) are satisfied, the Employee
      shall be eligible to
      receive benefits under only subsection 7(e).

            


    

     

     

    
      	
               
      

            	
              (h)

            	
              Golden
      Parachute (Section
      280G) Excise
      Taxes.

            


    

     

     

    
      	
               
      

            	
              (i)

            	
              Subject to subsection 7(h)(ii) below, if it is determined that any payment or benefit received or
      to be received by the Employee, whether pursuant to this Agreement or
      otherwise (the
      “Severance
      Payments”), is a “parachute payment” within the meaning of
      section 280G of the Internal Revenue Code (the
      “Code”) (all such payments and benefits,
      including the Severance Payments as applicable, but excluding the Gross-Up
      Payment (as defined below) being hereinafter called
      “Total Payments”) that will be subject (in whole or part)
      to the tax imposed
      under section 4999 of the Code (the
      “Excise Tax”), then the Company shall pay to
      the Employee on or as soon as practicable following the day on
      which the Excise Tax is remitted by the Employee (but not later than the end of
      the taxable year following the year in which the Excise Tax is
      incurred and subject
      to the provisions set forth in Section 25 below, including if applicable, the Six Month
      Delay (as defined in such section)) an additional amount (the
      “Gross-Up Payment”) such that the net amount
      retained by the Employee, after deduction of any Excise
      Tax on the Total Payments and any federal, state and local
      income and employment
      taxes and Excise Tax
      upon the Gross-Up Payment, shall be equal to the Total
      Payments.

            


    

     

     

    
      	
               
      

            	
              (ii)

            	
              In the event that the amount of
      the Total Payments does not exceed 110% of the largest amount that would
      result in no portion of the Total Payments being subject to the Excise Tax (the
      “Safe Harbor”), the non-cash portion of the Total Payments
      shall first be
      reduced (if necessary, to zero), and the cash portion of the Total Payments shall thereafter be reduced (if
      necessary, to zero) so that the amount of the Total Payments is equal to
      the Safe Harbor.

            


    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (iii)

            	
              For purposes of determining
      whether any of the Total Payments will be subject to the Excise Tax and
      the amount of such Excise Tax, (A) no portion of the Total Payments
      shall be taken into account which, in the opinion of tax counsel
      (“Tax
      Counsel”) selected by the Board in existence immediately prior to
      the Change in Control, does not constitute a
      “parachute
      payment” within the
      meaning of section 280G(b)(2) of the Code, including by reason of
      section 280G(b)(4)(A) of the Code, (B) the Severance Payments shall be
      reduced only to the extent necessary so that the Total Payments (other
      than those referred to in clause (A)) in their entirety constitute
      reasonable compensation for services actually rendered within
      the meaning of
      section 280G(b)(4)(B) of the Code
      or are otherwise not subject to disallowance as deductions by reason of
      section 280G of the Code, in the
      opinion of Tax Counsel, and (C) the value of any non-cash benefit or any deferred
      payment or benefit included in the Total Payments shall
      be determined by the Company's independent
      auditor in
      accordance with the
      principles of sections 280G(d)(3) and (4) of the
      Code.  If the Employee disputes the Company's
      calculations (in whole or in part), the reasonable opinion of Tax Counsel with respect
      to the matter in dispute shall
prevail.

            


    

     

    
      	
               
      

            	
              (iv)

            	
              If the Excise Tax is finally
      determined to be less than the amount taken into account hereunder in
      calculating the Gross-Up Payment, the Employee shall repay to the Company,
      at the time that the
      amount of such reduction in Excise Tax is finally determined, the portion
      of the Gross-Up Payment attributable to such reduction (plus that portion
      of the Gross-Up Payment attributable to the Excise Tax and federal, state
      and local income and employment taxes imposed on the
      Gross-Up Payment being repaid by the Employee to the extent that such
      repayment results in a reduction in Excise Tax and/or a federal, state or
      local income or employment tax deduction) plus interest on the amount of
      such repayment at 120% of the rate
      provided in section 1274(b)(2)(B) of the Code.  If the Excise
      Tax is determined to exceed the amount taken into account hereunder in
      calculating the Gross-Up Payment (including by reason of any payment the
      existence or amount of which cannot be determined at
      the time of the Gross-Up Payment), the Company shall make an additional
      Gross-Up Payment in respect of such excess (plus any interest, penalties
      or additions payable by the Employee with respect to such excess) at the
      time that the amount of such excess is
      finally determined.

            


    

     

    
      	
               
      

            	
              (v)

            	
              The Employee and the Company shall
      each reasonably cooperate with the other in connection with any
      administrative or judicial proceedings concerning the existence or amount
      of liability for Excise Tax with respect to the Total
      Payments.  The Company also shall pay to the Employee all legal
      fees and expenses incurred by the Employee in connection with any tax
      audit or proceeding to the extent attributable to the application of
      

            


    

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                 
      

              	
                 

              	
                section 4999 of the Code
      to any payment or benefit provided
      hereunder. Such payments shall be made within sixty (60) business days
      after delivery of the Employee's written request for payment accompanied
      with such evidence of fees and expenses incurred as the Company reasonably
      may require (but in no event shall any
      such payment be made after the end of the calendar year following the
      calendar year in which the expenses were incurred), provided that no such
      payment shall be made in respect of fees or expenses incurred by the
      Employee after the later of the tenth
      (10th) anniversary of the effective date of the Employee's termination
      with the Company or the Employee's death and, provided further, that, upon
      the Employee’s “separation from
      service” (as such
      term is defined under Section 409A) with the Company, in no event
      shall any additional such payments be made prior to the date that is six
      (6) months after the date of the Employee’s “separation from
      service” to the
      extent such payment delay is required under section 409A(a)(2)(B) of
      the
  Code.

              


      

    

     

     

    
      	
              8.

            	
              Licensing.

            


    

     

     

    The Employee has obtained and
possesses, or will obtain and possess, and will maintain throughout the Term
hereof, all licenses, approvals, permits, and authorization (the “Licenses”)
necessary to perform the Employee’s duties hereunder (if any).  Any
costs, attorneys’ fees, investigation fees or other expenses incurred in
connection with obtaining or maintaining such Licenses shall be borne by the
Company, provided that payment of such fees or costs by the Company shall be
made no later than the end of the year following the year in which the expenses
were incurred.  The Employee warrants that the Employee is fully
eligible, under all standards and requirements, to obtain, possess, and maintain
such Licenses and that the Employee will commit no acts during the Term hereof
that would jeopardize or eliminate the Employee’s ability to possess or maintain
such Licenses.

     

     

    
      	
              9.

            	
              Rules and
      Regulations.

            


    

     

     

    The Employee shall observe, enforce,
and comply with the policies, philosophies, strategies, rules, and regulations
of the Company, as they may be promulgated and/or modified from time to time,
and shall carry out and perform the orders, directions, and policies of the
Company, as they may be stated and/or amended from time to time, either orally
or in writing.  A violation of this Section 9 by the Employee is a
material breach of this Agreement.

     

     

    
      	
              10.

            	
              Restrictive
      Covenants.

            


    

     

     

    In consideration of the amounts payable
and benefits provided under Section 4, and, if applicable, Section 7 and
subsection 10(a), the other compensation paid hereunder, and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
the parties, the parties agree to the following provisions of this Section
10:

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              (a)

            	
              Non-Competition. The Employee understands and agrees that the Company
      and the Company
      Affiliates do
      business throughout the State of Nevada and other states.  The Employee further understands and agrees
      that he is a high ranking officer of the Company and will have access to
      confidential and trade secret information and goodwill of the Company and the Company Affiliates
      that will allow
      the
      Employee to unfairly
      compete with the Company and the Company Affiliates
      justifying this
      restriction.  If the Employee's
      employment is
      terminated (by either
      the Employee or the
      Company), whether or
      not during the Term,
      for any reason other than as specified above in subsection 6(c)(i) by reason of the death of the Employee, or
      subsection 6(c)(ii) for disability, then for a period of twelve (12) months commencing on the date of such termination of
      employment,
      the
      Employee agrees that,
      without the written permission of the Company, he will not engage (whether
      as owner, partner, controlling stockholder, controlling investor,
      employee, director,
      adviser, consultant,
      or otherwise) in any
      business that is in direct competition with the business being conducted by the Company or
      any of the
      Company
      Affiliates as of the date the Employee terminates
      employment, in Nevada
      or in any other state in which the
      Company is conducting
      such business (the “Non-Compete Area”) as of the date the Employee terminates
      employment
      (collectively, the “Non-Competition
      Activities”); provided that if the Employee's
      employment is
      terminated (x) during the Term by the Employee
      for any reason other
      than (I) as specified above in subsection 6(b) for Good Reason, (II) as
      specified above in subsection 6(c)(i) by reason of death, or (III) as
      specified above in
      subsection 6(c)(ii) by reason of disability, or
      (y) following the expiration of the Term, (by either the Employee or the
      Company) for any reason other than as specified above in subsection 6(a)
      by the Company for “Cause,” in subsection 6(c)(i) by reason
      of the death of the Employee, or subsection 6(c)(ii) for
      disability, then the Employee shall
      be entitled
      to, in lieu of any further salary
      payments to the Employee for periods subsequent to such termination of
      employment and in
      lieu of any severance benefit otherwise payable to the Employee, an amount
      (the “Non-Competition Pay”) equal to one (1 times Base Salary payable in equal bi-weekly
      installments on the Company’s regular payroll dates as in
      effect on such termination date, for twelve (12) months following such termination date, commencing with the payroll
      date applicable to the first full payroll period following such termination date; provided, however, that such
      payments shall be delayed to the extent required under Section
      25 below. Notwithstanding anything in this
      Agreement to the contrary, (1) if the non-competition provision
      in this subsection
      10(a) is, or at any time becomes, nonenforceable, then the Employee shall
      not be entitled to any unpaid Non-Competition Pay that would otherwise be due under
      this subsection 10(a)
      and (2) if following the one-year anniversary of the date of
      termination of
      the
      Employee’s employment, the Employee has not and does not engage in the
      Non-Competition Activities and (A) his employment had been terminated whether or not during the Term, for any reason other than as
      specified above in subsection 6(a) for Cause, subsection 6(c)(i) by reason of
      the death of the Employee, or subsection 6(c)(ii) for disability, or if
      the Employee had
      terminated his employment for Good Reason
      pursuant to subsection 6(b), then (A) if such termination occurred
      during

            


    

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    
       

      
        	
                 
      

              	
                 

              	
                the Term, the Company shall continue to pay
      the Severance Pay described in subsection
      7(a)(i) commencing with the payroll date
      applicable to the first full payroll period following such one-year
      anniversary and
      to provide the
      COBRA benefits
      described in
      subsection 7(a)(ii), and (B) if such termination occurred
      after the Term, the Company shall continue to
      pay the Non-Competition Pay described in
      this subsection 10(a) commencing with the payroll date
      applicable to the first full payroll period following such one-year anniversary, in either case, for the shorter
      of an additional six months or until the Employee engages in any Non-Competition
      Activities.  All payments described
      herein shall be
      subject to normal payroll deductions.

              


      

    

     

     

    
      	
               
      

            	
              (b)

            	
              Non-Solicitation. Without limiting the
      generality of the
      foregoing, the
      Employee agrees that
      for a period of eighteen (18) months following the Employee's termination of
      employment (for any
      reason, by either the Employee or the Employer), he will not, without the prior
      written consent of the Company, directly or indirectly solicit or
      attempt to solicit, within the Non-Compete Area, any business from any
      person or entity that the Company or any of the Company Affiliates
      called upon,
      solicited, or conducted business with as of such termination date, any persons or entities that have been
      customers of the Company or any of the Company Affiliates
      or recruit any person
      who has been or is an employee of the Company or any of the Company
      Affiliates, during
      the preceding one
      (1)-year period from
      such termination date.  In addition, the Employee agrees that he shall not directly
      or indirectly solicit or encourage any employee of the Company or any of the Company
      Affiliates to go to
      work for or with the
      Employee for a period
      of one
      (1)-year following
      such termination date. 

            


    

     

     

    
      	
               
      

            	
              (c)

            	
              In the event the Employee violates subsection 10(a) or 10(b), the applicable period of time during which the respective restriction
      applies will automatically be extended for
      the period of time from which the Employee began such violation until
      he permanently ceases
      such violation.  If any provision of this covenant
      is invalid in whole or in part, it will be limited, whether as to time,
      area covered, or otherwise as and to the extent required for its validity
      under the applicable law and as so limited, will be
      enforceable.

            


    

     

     

    
      	
               
      

            	
              (d)

            	
              Confidential
      Information.
      The
      Employee acknowledges
      that he has had or will have access to the  confidential
      information of the
      Company and the Company Affiliates (including, but not limited to,
      records regarding sales, price and cost information, marketing
      plans, customer names, customer lists, sales techniques, distribution
      plans or procedures, and other material relating to the business conducted by the Company
      and the Company Affiliates), proprietary, or trade secret
      information (the
      “Confidential
      Information”), and
      agrees never to use the Confidential Information other than for the sole
      benefit of the Company and the Company Affiliates
      and further agrees to
      never disclose such Confidential Information (except as may be
      required by
      regulatory authorities or as may be


            


    

     

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

    
      
        	
                 
      

              	
                 

              	
                required by law) to any entity or
      person that is not an officer or employee of the Company or a Company Affiliate
      at the time of such
      disclosure (unless at
      such time such Confidential Information is subject to a policy of the Company or a Company
      Affiliate restricting
      disclosure to non-officers), in which case disclosure shall
      be limited solely to officers of the Company or the applicable Company
      Affiliate at the time
      of such disclosure, without the prior written consent of the Company.  The Employee further acknowledges that this
      covenant to maintain Confidential Information is necessary to protect the
      goodwill and proprietary interests of the Company and the Company
      Affiliates and the
      restriction against the disclosure of Confidential Information
      is reasonable in light of the consideration and other value the Employee
      has received or will receive pursuant to this Agreement and otherwise pursuant to his
      employment by the Company.

              


      

    

     

     

    
      	
               
      

            	
              (e)

            	
              From and following the Employee's termination of employment, the Employee agrees to cooperate with the
      Company and the
      Company Affiliates in
      any litigation, administrative proceeding, investigation or audit
      involving any matters with which the Employee has knowledge of from his
      employment with the
      Company.  The Company shall reimburse
      the
      Employee for
      reasonable expenses, including reasonable compensation for services
      rendered at his
      hourly rate of compensation as of such termination date, incurred in providing such
      assistance and approved by the Company.  The Company shall reimburse the
      Employee for such expenses incurred in accordance with the policies
      and procedures of the Company, but in no event no later than the end of the year
      following the year in which the expenses were incurred.

            


    

     

     

    
      	
               
      

            	
              (f)

            	
              In the event of a violation of this
      Section 10, the Company and the Company
      Affiliates shall be
      entitled to any form of relief at law or equity, and the parties agree and
      acknowledge that injunctive relief is an appropriate, but not exclusive,
      remedy to enforce the
      provisions hereof.  The existence of any claim or
      cause of action of the Employee against the Company, whether
      predicated on this Agreement or otherwise, shall not constitute a defense
      of the Company’s enforcement of the covenants set
      forth in this Section
      10.  The Employee hereby submits to the
      jurisdiction of the courts of the State of Nevada and federal courts
      therein for the purposes of any actions or proceedings instituted by the
      Company to enforce its rights under this Agreement, to seek
      money damages or seek
      injunctive relief.  The Employee further acknowledges and agrees
      (i) that the obligations contained in
      Section 10 of this Agreement are necessary to protect the
      interests of the Company and the Company
      Affiliates,
      (ii) that the restrictions contained herein are
      fair, do not
      unreasonably restrict the Employee's further employment and business
      opportunities, and are commensurate with the compensation arrangements set
      out in this Agreement
      and (iii) that such compensation arrangements
      constitute separate
      consideration for the obligations set forth in this Section 10.  The covenants contained in Section
      10 shall each be construed as an agreement independent of any other
      provisions of this Agreement.  Both parties intend to make the
      covenants of Section
      10 binding only to the extent


            


    

     

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                 
      

              	
                 

              	
                that it may be lawfully done under
      existing applicable laws.  If a court of competent
      jurisdiction decides any part of any covenant is overly broad, thereby
      making the covenant unenforceable, the parties agree that such court shall substitute a
      reasonable, judicially enforceable limitation in place of the offensive
      part of the covenant and as so modified the covenant shall be as fully
      enforceable as set forth herein by the parties themselves in the modified
      form.

              


      

    

     

     

    
      	
               
      

            	
              (g)

            	
              The Employee acknowledges that it is possible
      that the corporate structure of the Company could change during the term
      of this Agreement.  The Employee hereby acknowledges and affirms
      that the Company may assign its rights under this Agreement, including but not limited to its rights to enforce
      the covenants set forth in subsections 10(a), 10(b) and
      10(c), to a
      third-party without the approval of or additional consideration to
      the
      Employee.
       The Employee acknowledges and agrees that the
      consideration called for herein is good and sufficient
      consideration for the Company's right to assign its rights under this
      Agreement.

            


    

     

     

    
      	
               
      

            	
              (h)

            	
              Subsections 10(a) through
      (g), inclusive, of this Agreement
      shall survive either termination of the employment relationship
      and/or termination of this Agreement for the full
      period set forth in subsections 10(a) through
      (g),
    inclusive.

            


    

     

     

    
      	
              11.

            	
              Work for
      Hire.

            


    

     

     

    The Employee agrees that any work,
invention, idea or report that he produces or that results from or is suggested
by the work the Employee does on behalf of the Company or any of the Company
Affiliates is “work for hire” (hereinafter referred to as “Work”) and will be
the sole property of the Company.  The Employee agrees to sign any
documents, during or after employment that the Company deems necessary to
confirm its ownership of the Work, and the Employee agrees to cooperate with the
Company to allow the Company to take advantage of its ownership of such
Work.

     

     

    
      	
              12.

            	
              Assignment of
      Agreement.

            


    

     

     

    The Employee agrees that his services
are unique and personal and that, accordingly, the Employee may not assign his
rights or delegate his duties or obligations under this Agreement. The Company
may assign its rights, duties, and obligations under this Agreement to any
successor to its business.  This Agreement shall inure to the benefit
of and be binding upon the Company’s successors and assigns.

     

     

    
      	
              13.

            	
              Indemnification of the
      Employee.

            


    

     

     

    The Company shall indemnify the
Employee and hold him harmless for acts or decisions made by him in good faith
while performing services for the Company or any of the Company Affiliates to
the maximum extent allowed by law.  The Company shall also use its
reasonable 

     

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

     

    efforts
to obtain coverage for him under any insurance policy now in force or
hereinafter obtained during Term covering the officers and directors of the
Company against lawsuits, subject to the business judgment of the
Board.  The Company shall pay all expenses, including attorneys’ fees
of an attorney selected and retained by the Company to represent the Employee,
actually and necessarily incurred by the Employee in connection with the defense
of such act, suit, or proceeding and in connection with any related appeal,
including the cost of court settlements, provided that, to the extent required
by Section 409A, any such payment by the Company shall be made no later than the
end of the year following the year in which the expenses were
incurred.

     

     

    
      	
              14.

            	
              Notices.

            


    

     

     

    Any notice, document, or other
communication (hereinafter “Notice”) which either party may be required or may
desire to give to the other party shall be in writing, and any such notice may
be given or delivered personally or by mail or facsimile.  Any such
notices given or delivered personally shall be given or delivered by hand to an
officer of the entity to which they are being given or delivered or the
individual, as the case may be, and shall be deemed given or delivered when so
given or delivered by hand.  Any such notices given or delivered by
facsimile will be deemed given or delivered upon receipt by the sender of a
successful facsimile transmission to the facsimile number below, and any such
notices given or delivered by mail shall be deemed given or delivered three (3)
days after it is deposited in the U.S. mail, certified or registered mail,
return receipt requested, with all postage and fees prepaid, addressed to the
person or entity in question as follows:

     

    If
to the Employee:

     

    Martin
J. Welch

     

    To
the address (or facsimile number, if applicable) on record with the
Company

     

    If
to the Company:

     

    Chief
Executive Officer

    Employers
Insurance Company of Nevada

    10375
Professional Circle

    Reno,  Nevada  89521-4802

    Fax:  (775)
886-5499

     

    or,
in either case, to such other address as either party may have previously
notified the other pursuant to the provisions of this Section 14.

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    


     

     

    
      	
              15.

            	
              Severability.

            


    

     

     

    In the event that any provision hereof
shall be declared by a court of competent jurisdiction to be void or voidable as
contrary to law or public policy, such declaration shall not affect the
continuing validity or enforceability of any other provisions hereof insofar as
it may be reasonable and practicable to continue to enforce such other provision
in the absence of the provision which shall have been declared to be void and
voidable.

     

     

    
      	
              16.

            	
              Remedy for
      Breach.

            


    

     

     

    Both parties recognize that the
services to be performed by the Employee are special and unique.  The
Company will have the right to seek and obtain damages and any available
equitable remedies for the Employee’s breach of this Agreement.  The
Employee's remedy for any breach of this Agreement is strictly limited to the
Severance Pay or CIC Severance Pay, as the case may be, called for
herein.

     

     

    
      	
              17.

            	
              Mitigation of
      Damages.

            


    

     

     

    The Employee shall not be required to
mitigate damages or the amount of any payment provided under this Agreement by
obtaining other employment or otherwise after the termination of employment
hereunder, and any amounts earned by the Employee, whether from self-employment
or other employment shall not reduce the amount of any Severance Pay or CIC
Severance Pay, as the case may be, called for herein.

     

     

    
      	
              18.

            	
              Attorneys' Fees and
      Costs.

            


    

     

     

    In any claim or dispute between the
parties arising out of or associated with this Agreement or the breach hereof or
otherwise arising out of or associated with the Employee’s employment by the
Company, the prevailing party shall be entitled to recover all reasonable
attorneys' fees, expenses, and costs thereof or associated therewith, provided
that, to the extent required by Section 409A, any such payment by the Company
shall be made no later than the end of the year following the year in which such
fees, expenses and costs were incurred.  The term “prevailing party”
means the party obtaining substantially the relief sought via litigation or
through an action in arbitration.

     

     

    
      	
              19.

            	
              Integration, Amendment, and
      Waiver.

            


    

     

     

    This Agreement and such other written
agreements referenced in this Agreement, constitute the entire agreement between
the parties pertaining to the subject matter contained in it except as expressly
provided herein, and supersedes all prior agreements, representations,
assurances, and understandings of the parties, including any prior employment
agreements.  No amendment of, addition to, or modification of this
Agreement shall be binding unless executed in writing by the
parties.  Any term or provision of this Agreement may be waived in a
signed writing at any time by the party that is entitled to the benefit thereof,
provided, however, that any 

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    waiver
shall apply only to the specific event or omission waived and shall not
constitute a continuing waiver.  Any term or provision of this
Agreement may be amended or supplemented at any time by a written instrument
executed by all the parties hereto.

     

     

    
      	
              20.

            	
              Captions.

            


    

     

     

    The captions and section headings of
this Agreement are for convenience and reference only, and shall have no effect
on the interpretation or construction of this Agreement.

     

     

    
      	
              21.

            	
              Applicable
      Law.

            


    

     

     

    The substantive laws of the State of
Nevada shall govern the validity, construction, interpretation, performance, and
effect of this Agreement.

     

     

    
      	
              22.

            	
              Arbitration.

            


    

     

     

    Any controversy, cause of action or
claim related to or arising out of or in connection with the Employee’s
employment with the Company, including but not limited to termination of such
employment or under this Agreement, other than an action to enforce the
provisions of Section 10 herein or the breach thereof, shall be settled by
arbitration according to the rules of the American Arbitration Association
applicable to disputes arising in Nevada and under Nevada law.  Any
party to the arbitration may enter judgment upon the award rendered by the
arbitrator in any court having jurisdiction thereof.  The arbitrator
shall not be entitled to amend or alter the terms of this
Agreement.  Notwithstanding this Section 22, the Company shall be
entitled to seek any available equitable remedy for enforcement of provisions of
this Agreement.

     

     

    
      	
              23.

            	
              Authorization.

            


    

     

     

    The Company and the Employee,
individually and severally, represent and warrant to the other party that it has
the authorization, power and right to deliver, execute and fully perform the
obligations under this Agreement in accordance with its terms. The Employee
represents and warrants to the Company that there is no restriction or
limitation, by reason of this Agreement or otherwise, upon the Employee’s right
or ability to enter into this Agreement and fulfill his obligations under this
Agreement.

     

     

    
      	
              24.

            	
              Acknowledgment.

            


    

     

     

    The Employee acknowledges that he has
been given a reasonable period of time to study this Agreement before signing
it.  The Employee certifies that he has fully read, has received an
explanation of, and completely understands the terms, nature, and effect of this
Agreement.  The Employee further acknowledges that he is executing
this Agreement freely, knowingly, and voluntarily and that the Employee’s
execution of this Agreement is not the result of any fraud, duress, mistake, or
undue influence whatsoever.  In executing this Agreement, the Employee


     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    does
not rely on any inducements, promises, or representations by the Company or any
person other than the terms and conditions of this Agreement.

     

    25.        Section 409A.

     

    Notwithstanding
anything to the contrary in this Agreement, the payment of consideration,
compensation, and benefits pursuant to this Agreement shall be interpreted and
administered in a manner intended to avoid the imposition of additional taxes
under section 409A of the Code and the regulations and guidance promulgated
thereunder (“Section 409A”). Notwithstanding any provision to the contrary in
this Agreement or otherwise, no payment or distribution under this Agreement or
otherwise that constitutes an item of “deferred compensation” under Section 409A
and becomes payable by reason of the termination of the Employee’s employment
hereunder shall be made to the Employee unless and until the termination of the
Employee’s employment constitutes a “separation from service” (as such term is
defined in Section 409A).

     

     

    In
addition, no such payment or distribution of deferred compensation shall be made
to the Employee prior to the earlier of (a) the expiration of the six (6) month
period (the “Six Month Period”) measured from the date of the Employee’s
“separation from service” (as such term is defined in Section 409A), and (b) the
date of the Employee’s death, if the Employee is deemed at the time of such
separation from service to be a “specified employee” within the meaning of that
term under Section 409A (the “Six Month Delay”) and if such delayed commencement
is otherwise required to avoid an “additional tax” under section 409A(a)(1)(B)
of the Code. All payments and benefits that are delayed pursuant to the
immediately preceding sentence shall be paid to the Employee in a lump sum upon
expiration of such six (6) month period (or if earlier, upon the Employee’s
death).

     

     

    Notwithstanding
the foregoing provisions, to the extent permitted under Section 409A, any
separate payment or benefit under this Agreement or otherwise shall not be
“deferred compensation” subject to Section 409A and the Six Month Delay to the
extent provided in the exceptions in Treasury Regulation section 1.409A-1(b)(4)
and (b)(9) and any other applicable exception or provision under Section
409A.  Further, each individual installment payment that becomes
payable under this Agreement and each payment of the Severance Pay or if
applicable, the CIC Severance Pay or the Non-Competition Pay pursuant to
subsection 10(a) shall be a “separate payment” under Section
409A.  Specifically, to the extent the provisions of Treasury
Regulation section 1.409A-1(b)(9) are applicable to the Severance Pay or if
applicable, the CIC Severance Pay or the Non-Competition Pay pursuant to
subsection 10(a), the portion of such pay set forth in respectively, subsection
7(a)(i), subsection 7(e)(i) or subsection 10(a) above that is less than the
limit prescribed under Treasury Regulation section 1.409A-1(b)(9)(iii)(A) (or
any successor provision) (the “Delayed Amount”) shall be payable to the Employee
in the manner prescribed in subsection 7(a)(i), subsection 7(e)(i) or subsection
10(a), as applicable, without regard to the Six Month
Delay.  Following the Six Month Delay, (1) to the extent applicable,
the Employee shall receive a lump sum cash payment equal to the Severance Pay,
CIC Severance Pay or the Non-Competition Pay pursuant to subsection 10(a), as
applicable, he otherwise would have received during the Six Month Period (absent
the Six Month Delay) less the Delayed Amount and (2) the Employee shall receive
the remainder of his Severance Pay, CIC Severance Pay or the Non-Competition Pay
pursuant to subsection 10(a), as applicable, in the manner prescribed by
subsection 7(a), subsection 7(e) or subsection 10(a), as
applicable.

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the
Effective Date.

     

     

    


     

    
      
        
          
            
              
                
                  	
                          COMPANY:

                        	 
      	
                          EMPLOYEE:

                        
	 	 	 
	
                          By:

                        	 
      	 
      	
                          By:

                        	 
      
	 
      	/s/
      Douglas D. Dirks	
                           

                        	 
      	 
      	/s/
      Martin J. Welch	
                           

                        
	 
      	
                          Name:   Douglas
      D. Dirks

                          Chief Executive
      Officer

                        	 
      	 
      	
                          Name:
      Martin J.
Welch

                        


                

              

            

          

        

      

    

     

    
 

     


    
      
         


      

      
        20

        
          

        

      

      
         


      

    


     

     

    Appendix
A

     

     

    


    Perquisites

     

    1.
Automobile Allowance in the amount of $1,200.00 per month

     

    2.
Annual Executive Physical Examination as a part of the Company’s executive
wellness program

     

    3.
Life Insurance as a part of the Company’s group life insurance program in an
amount equal to three (3) times the Employee’s Base Salary