Document:

Exhibit

Exhibit 10.1

AMENDMENT TO NOTE PURCHASE AGREEMENT

THIS Amendment to Note Purchase Agreement, dated as of June 1, 2016 (this “Amendment”), is being executed by and between Apple Ridge Funding LLC, a Delaware limited liability company (the “Issuer”), Cartus Corporation, a Delaware corporation (“Cartus”), Realogy Group LLC (f/k/a Realogy Corporation), a Delaware limited liability company (“Realogy”), the Managing Agents, Committed Purchasers and Conduit Purchasers, and Crédit Agricole Corporate and Investment Bank (“CA-CIB”), as Administrative Agent (the “Administrative Agent”). Unless otherwise defined herein, capitalized terms used in this Amendment have the meanings set forth in the Note Purchase Agreement (as defined below).

WHEREAS, the Issuer, Cartus, as Servicer, the financial institutions and commercial paper conduits party thereto and the Administrative Agent are parties to the certain Note Purchase Agreement, dated as of December 14, 2011 (as previously amended, the “Note Purchase Agreement”); and

WHEREAS, subject to the terms and conditions contained herein, the parties hereto have agreed to amend the Note Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing premises, the terms and conditions stated herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

		
	1.
	Amendment.   As of the date hereof, subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Note Purchase Agreement is hereby amended as follows:

(a)    Section 1.01 of the Note Purchase Agreement is amended to add the following definitions, in alphabetical order: 
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Collateral Trustee” means, with respect to a CP Conduit Purchaser, a collateral trustee for the benefit of the holders of such CP Conduit Purchaser’s notes appointed pursuant to such CP Conduit Purchaser's program documents.
 “EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent; 
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by 

the Loan Market Association (or any successor person), as in effect from time to time. 
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
(b)    The definition of “Commitment Termination Date” contained in Section 1.01 of the Note Purchase Agreement is amended is amended to replace the reference therein to “June 10, 2016” to “June 9, 2017”. 
(c)    Section 7.01 of the Note Purchase Agreement is amended to remove the words “the Issuer shall have given prior written notice to the Rating Agencies of each such amendment or waiver, and provided further that, with respect to the foregoing clauses (a) and (b),” from such section. 
 (d)    Section 7.04 of the Note Purchase Agreement is amended to add the following language to the end of such section: 
For the avoidance of doubt, notwithstanding anything to the contrary set forth herein, each Conduit Purchaser may at any time pledge or grant a security interest in or otherwise transfer all or any portion of its interest in the Pledged Assets or under this Agreement to a Collateral Trustee, in each case without notice to or the consent of the Issuer or the Servicer, but such pledge, grant or transfer shall not relieve the each Conduit Purchaser from its obligations hereunder, and such pledge, grant or transfer shall not impute upon the Servicer or Issuer any obligations to any Collateral Trustee (including, but not limited to, any indemnity obligation).

(e)    Section 7.12 of the Note Purchase Agreement is amended to add the words “, any Collateral Trustee” after “Each Purchaser” in the first line of such section. 
(f)    The Note Purchase Agreement is amended to add the following language as a new Section 7.14: 
Section 7.14. Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Transaction Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Transaction Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
(b)    the effects of any Bail-in Action on any such liability, including, if applicable:
(i)    a reduction in full or in part or cancellation of any such liability;
(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Transaction Document; or
(iii)    the variation of the terms of such liability  in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

(g)    The Note Purchase Agreement is amended to add the following language as a new Section 7.15: 
The Issuer and Cartus severally represent and undertake to the Administrative Agent, each Managing Agent and each Purchaser that, so long as any Notes are outstanding:
 (a)    Cartus has retained, and shall on an ongoing basis retain, a net economic interest in the Issuer which shall not be less than 5% of the aggregate Unpaid Balance of all Receivables included in the Pledged Assets through its direct or indirect holding of equity interests in the Issuer (the “Retained Interest”); provided that this subsection (a) shall not impose on Cartus any obligation to contribute financial support to the Issuer or any of its Affiliates;
(b)    the Retained Interest shall not be subject to any credit risk mitigation or any short positions or any other hedge, except to the extent permitted by Capital Requirements Regulation No. 575/2013 of the European Parliament and of the Council of 26 June 2013 and any related guidelines and regulatory technical standards or implementing technical standards published by the European Banking Authority, or the European Central Bank, and any delegated regulations of the European Commission (the “Capital Requirements Regulation”) (it being understood that Cartus has pledged and may continue to pledge its equity interest in CFC as security for certain guaranty obligations with respect to recourse indebtedness of its parent company); and  
(c)    Cartus will provide, upon the request of the Administrative Agent, any Managing Agent or Purchaser all information in its possession which such Person may reasonably require in order to comply with its obligations under Article 406 of the Capital Requirements Regulation.  
For purposes of this Section 7.15, the covenant in clauses (a) and (b) above to retain a 5% Retained Interest is measured at the time of each Advance, and shall not be affected by subsequent losses on the Receivables so long as the Retained Interest is not hedged or sold in violation of this Section 7.15.
		
	2.
	Conditions Precedent.  This Amendment shall be effective upon (a) the Administrative Agent’s receipt of counterparts to (i) this Amendment and (ii) that certain Renewal Fee Letter, dated as of the date hereof (the “Renewal Fee Letter”), by and between the Issuer and each Managing Agent, in each case, duly executed by each of the parties thereto, (b) the Issuer’s payment of all fees required to be paid on or prior to the date hereof in accordance with the Renewal Fee Letter and (c) the Issuer’s payment and/or reimbursement, to the extent invoiced, of the Administrative Agent’s, each Managing Agent’s and each Purchaser’s reasonable costs and expenses incurred in connection with this Amendment and the Other Transaction Documents. 

		
	3.
	Waiver of Delivery.  Each of the Managing Agents signatory hereto waive any prior notice or delivery requirement set forth in the Transaction Documents with respect to this Amendment (including, without limitation, Section 2.05(b) of the Note Purchase Agreement).  

		
	4.
	GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING §5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

		
	5.
	Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

		
	6.
	References to and Effect on the Note Purchase Agreement.  On and after the date hereof: (i) all references in the Note Purchase Agreement to “this Agreement,” “hereof,” “herein” or words of similar effect referring to the Note Purchase Agreement shall be deemed to be references to the Note Purchase Agreement as amended by this Amendment; (ii) each reference in any of the Transaction Documents to the Note Purchase Agreement shall mean and be a reference to the Note Purchase Agreement as amended by this Amendment; and (iii) each reference in any Transaction Document among the parties hereto to any of the terms or provisions of the Note Purchase Agreement which are redefined or otherwise modified hereby shall mean and be a reference to such terms or provisions as redefined or otherwise modified by this Amendment. 

		
	7.
	Reaffirmation of Performance Guaranty.  Effective as of the date hereof, Realogy, in its capacity as the Performance Guarantor under the Performance Guaranty, hereby consents to this Amendment and acknowledges and agrees that the Performance Guaranty remains in full force and effect is hereby reaffirmed, ratified and confirmed.

		
	8.
	No Waiver.  This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Note Purchase Agreement other than as set forth herein, the Note Purchase Agreement, as modified hereby, remains in full force and effect and is hereby reaffirmed, ratified and confirmed.  

		
	9.
	Issuer Representations re: Outstanding Series.  As of the date hereof, the Issuer represents and warrants that the Series 2011-1 Notes are the only Notes outstanding under the Master Indenture. 

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

CARTUS CORPORATION

By: /s/ E. J. Barnes            
      Name: Eric. J. Barnes
      Title: SVP & CFO

APPLE RIDGE FUNDING LLC

By: /s/ E. J. Barnes            
      Name: Eric. J. Barnes
      Title: SVP & CFO

REALOGY GROUP LLC 

By: /s/ Anthony Hull            
      Name: Anthony E. Hull
      Title: EVP, CFO & Treasurer
 

Signature Page to Amendment to Note Purchase Agreement

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Administrative Agent, a Managing Agent and a Committed Purchaser

By: /s/ Kostantina Kourmpetis        
Name: Kostantina Kourmpetis
Title: Managing Director

By: /s/ Michael Regan            
Name: Michael Regan
Title: Managing Director

ATLANTIC ASSET SECURITIZATION LLC, as a Conduit Purchaser

By: /s/ Kostantina Kourmpetis        
Name: Kostantina Kourmpetis
Title: Managing Director

By: /s/ Michael Regan            
Name: Michael Regan
Title: Managing Director

Signature Page to Amendment to Note Purchase Agreement

THE BANK OF NOVA SCOTIA, as a Managing Agent and a Committed Purchaser 

By: /s/ Michelle Phillips            
Name: Michelle Phillips    
Title: Director

LIBERTY STREET FUNDING LLC, as a Conduit Purchaser 

By: /s/ John L. Fridlington        
Name: John L. Fridlington
Title: Director

Signature Page to Amendment to Note Purchase Agreement

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Managing Agent and a Committed Purchaser 

By: /s/ Elizabeth R. Wagner        
Name: Elizabeth R. Wagner    
Title: Vice President

Signature Page to Amendment to Note Purchase Agreement

BARCLAYS BANK PLC, as a Managing Agent

By: /s/ Laura Spichiger            
Name: Laura Spichiger
Title: Director

SHEFFIELD RECEIVABLES COMPAMY LLC, as a Committed Purchaser and a Conduit Purchaser

By: /s/ Chin-Yong Choe            
Name: Chin-Yong Choe
Title: Director

Signature Page to Amendment to Note Purchase Agreementex10-1.htm

Exhibit 10.1

 

 

ELEVENTH AMENDED AND RESTATED
DCP HOLDING COMPANY
EMPLOYMENT AGREEMENT

 

This Agreement is entered into as of January 1, 2016 (the “Effective Date”), by and between DCP Holding Company, an Ohio corporation, with its principal offices at 100 Crowne Point Place, Cincinnati, Ohio 45241 (“Company”), and Anthony A. Cook (“Employee”).

 

In consideration of the mutual obligations and promises contained herein, and intending to be legally bound, the parties hereto agree as follows:

 

1.     EMPLOYMENT. Company hereby employs Employee as an employee of Company and Employee hereby accepts such exclusive employment under the terms and conditions of this Agreement.

 

2.     TERM. Subject to the provisions in Section 7 hereof, the term of employment shall continue after the Effective Date for a period of one (1) year ending on December 31, 2016, and shall be automatically extended for successive one (1) year periods on the same terms and conditions as stated herein, unless on or prior to November 15th of any year either party provides written notice to the other party of termination of this Agreement, effective upon the expiration of the current one-year term.

 

3.     OFFICE AND DUTIES. During the term of his employment hereunder, Employee shall serve in the capacity of President and Chief Executive Officer of the Company. In such capacity, Employee shall do all things necessary and incident to this position and otherwise shall perform such functions as the Board of Directors of the Company may establish from time to time commensurate with Employee’s skill, position and background as reasonably determined by the Board. The performance of the duties hereunder shall be performed at such reasonable time and places as shall be determined by the Board. The Employee shall report directly to the Board of Directors. A description of the current duties is attached hereto as Exhibit A.

 

4.     COMPENSATION AND BENEFITS. In consideration for Employee’s performance of services and the non-competition provisions as described below, and subject to modifications as may be approved from time to time by Company and Employee, Employee shall receive, during the term of this Agreement, compensation and benefits as follows:

 

(A)     Base Salary. Employee shall be paid a base annual salary in accordance with the regular payroll practices of the Company and Exhibit B of this Agreement. Employee’s base annual salary for 2016 and all subsequent years of the term of this Agreement shall not be less than $427,000.00 or such higher amount as is reflected on subsequent agreed revisions of Exhibit B.

 

(B)     Bonus. Employee will be eligible to receive an annual bonus equal to between 15% and 60% of annual base salary pursuant to the Annual Incentive Plan and a stock and cash award pursuant to the Long Term Incentive Plan in accordance with Exhibit B of this Agreement, as revised on an annual basis.

 

(C)     Employee Benefits. Employee will be eligible to participate in all health, welfare, insurance and other benefits available to all other employees of the Company.

 

(D)     Vacations. Employee shall be entitled to vacation and personal time in accordance with the Company’s PTO policy as it exists from time to time. Employee will not be permitted to receive cash in lieu of unused PTO hours except in the event of the employee’s termination.

 

 

 

 

 

 

(E)     Automobile Allowance. The Company will pay up to Five Hundred ($500.00) Dollars per month for the lease of an automobile of Employee’s choice and will reimburse Employee for all documented fuel, insurance, maintenance and other operational costs.

 

(F)     Payroll Withholdings. Employee authorizes the Company to deduct from any payment made pursuant to Section 4 hereof all amounts required to be withheld by federal, state and/or local taxing authorities.

 

(G)     Club Membership. The Company will pay up to Seven Thousand Two Hundred ($7,200) Dollars for 2016 for fees and expenses for a club membership at Four Bridges Country Club.

 

(H)     Annual Performance Review. The Employee’s performance of his duties under this Agreement shall be reviewed by the Board of Directors or a committee of the Board of Directors at least annually and finalized within thirty (30) days of the receipt of the annual audited financial statements. The Board of Directors or a committee of the Board of Directors shall additionally review the base salary, bonus and benefits provided to the Employee under this Agreement and may, in their discretion, adjust the same, as outlined in Addendum B of this Agreement, provided, however, that Employee’s annual base salary shall not be less than the base salary set forth in Section 4(A) hereof.

 

5.     EXPENSES. Company shall pay or reimburse Employee for all travel and out-of-pocket expenses reasonably incurred or paid by Employee in connection with the performance of his duties upon presentation of expense statements or receipts or such other supporting documentation as the Company may reasonably require.

 

6.     OUTSIDE EMPLOYMENT. Employee shall devote his full time and attention to the performance of the duties incident to his position with the Company, and shall not have any other employment with any other enterprise or substantial responsibility for any enterprise which would be inconsistent with Employee’s duty to devote his full time and attention to Company matters without the prior consent of the Board of Directors.

 

7.     TERMINATION AND SEVERANCE PAY.

 

(A)     Death. This Agreement shall be terminated on the death of Employee, effective as of the end of the month in which his death occurs.

 

(B)     Disability. This Agreement may be terminated, at the option of the Company, if, because of a disability, Employee is unable to perform his job responsibilities after reasonable accommodations. This section will be applied consistent with the Company’s obligations under applicable federal and state law, including the Americans with Disabilities Act Amendments Act.

 

(C)     Termination – Good Cause. Nothing in this Agreement shall be construed to prevent the Company from terminating Employee’s employment hereunder for good cause (“Good Cause”) at any time. For this purpose, Good Cause shall include the following: alcohol or other drug dependence or addiction; conviction for any crime involving moral turpitude, fraud or misrepresentation, material neglect of duty; misappropriation, embezzlement or theft of Company funds or property; conduct which is materially injurious to the reputation, business or business relationships of the Company; or material violation of Company policy or any of the provisions of this Agreement. The effective date of such termination for Good Cause shall be the date of receipt by Employee or his legal representative of written notice of the termination stating the full basis for such cause or such later date as may be specified in such notice. Termination of Employee’s employment for Good Cause shall not constitute a breach of this Agreement and Employee shall not be entitled to any compensation arising on or after the effective date of such termination. In the event the Company is sold, transferred and/or merged with or to another entity, it shall not be deemed an event of Good Cause to terminate Employee, and if the new entity elects to retain Employee, Employee may be terminated only in accordance with Section 7(D) of this Agreement, and the Employee may terminate this Agreement as provided in Section 7(F) of this Agreement.

 

 

 

 

 

 

(D)     Termination Without Good Cause – Severance Pay. The Company may, by action of the Board, terminate this Agreement without Good Cause upon the payment of the amounts described in this paragraph. If, and only if, the Company terminates this Agreement either (i) in accordance with the notice provision of Section 2, or (ii) at any time during the term of this Agreement without Good Cause, then the Employee shall be entitled to severance pay as determined herein. Employee shall receive the greater of (i) eight (8) months of severance pay, or (ii) one (1) month of severance pay for each month remaining under the initial or any renewal term of the Agreement. One (1) month of severance pay shall equal one month of the Employee’s base salary as in effect on the date of termination. The Company shall pay such severance pay consistent with the Company’s severance policy and practice, as it exists from time to time. All bonuses to which Employee would otherwise be eligible during the year in which an Employee’s employment is terminated shall be pro-rated through the date of termination, regardless of whether such benefit is deemed to accrue or be payable after the date of termination. Moreover, during the stated severance pay period, Employee shall continue to receive the stated benefits as described in Section 4(C), but not any other benefits described in Sections 4(E) or 4(G).

 

(E)     Termination – Good Reason. Employee’s employment with the Company may also be terminated by the Employee for Good Reason. “Good Reason” means (i) a material breach by the Company of any provision of this Agreement, which breach is not cured or offending conduct ceased by the Company within thirty (30) days after the Company receives written notice thereof from the Employee; or (ii) the assignment of duties or responsibilities to the Employee by the Board that are inconsistent with the Employee’s position with the Company as of the date of this Agreement or reflect a material diminution in the status of the Employee within the Company. In the event Employee terminates employment for Good Reason, he shall be entitled to severance pay and benefits as provided for in Section 7(D) above.

 

(F)     Change of Control. In the event that, at any time during the Employee’s employment under this Agreement, the Company experiences a Change of Control (as defined in the DCP Holding Company 2006 Dental Care Plus Management Equity Incentive Plan ), then, provided that Employee shall have executed a release in the form and substance acceptable to the Company and subject to the other terms and conditions contained in this Agreement, the Employee may terminate his employment hereunder within fifteen (15) days of the occurrence of the Change of Control and, if so timely elected, shall be entitled to receive severance benefits in accordance with and subject to the terms of Section 7(D) above.

 

(G)     Membership on Board. Employee’s membership on the Board of Directors shall cease concurrent with the effective date of termination (for any reason) of Employee’s employment.

 

8.     CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges that information gained by Employee while employed by the Company, including without limitation that concerning the Company’s customers, suppliers and participating providers, and the methods, techniques, devices and operations of the Company, as they may exist from time to time, are of a confidential nature and are valuable, special and unique assets of the Company’s business. Employee shall not, during the term of or after the termination of employment, disclose in any way any such confidential information to any person, firm, corporation or any other operation or entity, or use the same on the Employee’s own behalf, for any reason or purpose. Upon termination of employment, the Employee shall deliver up to the Company all lists of the Company’s customers, suppliers and participating providers, and all copies thereof (including without limitation electronically stored information), and all notes, records, memoranda, complete correspondence files and other papers, and all copies thereof (including without limitation electronically stored information) relating to the methods, techniques, devices and operations of the Company, and the Employee does not have, nor can Employee acquire, any property right therein or claim thereto or in the underlying confidential information. The parties acknowledge that the Employee has substantial skills and experience as an executive which have been enhanced during the period of his employment by the Company. The intent of this Section 8 is not to preclude Employee from using such skills and experience in other permitted employment, but only to preclude the use of those methods, techniques, devices and operations which are unique or proprietary to the Company.

 

 

 

 

 

 

9.     DIVERSION OF BUSINESS. The Employee shall not, during the period of employment by the Company and for a period ending six months following termination of employment (for any reason), either for the Employee or on behalf of any person, firm, corporation or any other operation or entity, directly or indirectly:

 

(A)     Divert or attempt to divert from the Company any business whatsoever by influencing or attempting to influence, or soliciting or attempting to solicit any of the customers or participating providers of the Company with whom Employee may have dealt at any time or who were customers or participating providers of the Company on the date of termination of the Employee’s employment or had been customers or participating providers of the Company prior thereto; or

 

(B)     Divert or attempt to divert from the Company any person employed by the Company by influencing or attempting to influence such person to leave the Company’s employ.

 

10.     NON-COMPETITION AGREEMENT. For a period ending six (6) months from the termination of Employee’s employment with the Company for any reason, Employee hereby agrees that he will not, directly or indirectly render any services as an officer, director, employee, agent, consultant or in any other capacity to, or own any interest (other than an interest of less than five percent (5%) of the stock or a publicly held company), as an individual owner, stockholder, partner or in any other manner in any person, firm, corporation, partnership or other entity which is a competitive business (“Competitive Business”) in any standard metropolitan statistical area in which the Company has customers or participating providers or has a Certificate of Authority to do business at the time of such termination.

 

For the purpose of the Agreement, Competitive Business shall mean any business operation (including a sole proprietorship), which engages in, as all or a significant part of its business, the business of a dental insurance company or engages in any other business in competition with the Company in any geographic area in which the Company then operates.

 

11.     ACKNOWLEDGMENT. The Company and Employee each hereby acknowledge and agree as follows:

 

(A)     The covenants, restrictions, agreements and obligations set forth herein are founded upon valuable consideration, and with respect to the covenants, restrictions, agreements and obligations set forth in Sections 9 and 10 hereof, are reasonable in duration and geographic scope;

 

(B)     In the event of a breach or threatened breach by Employee of any of the covenants, restrictions, agreements and obligations set forth herein, monetary damages or the other remedies at law that may be available to the Company for such breach or threatened breach will be inadequate and, without prejudice to the Company’s right to pursue any remedies at law or in equity available to it for such breach or threatened breach, including, without limitation, the recovery of damages from Employee, the Company will be entitled to injunctive relief; and

 

 

 

 

 

 

(C)     In the event that the covenant not to compete contained in Section 10 is the subject of an arbitratable dispute pursuant to Section 15 and is found to be invalid or unenforceable as to such time period and/or geographical area, it will be valid and enforceable in such geographical area(s) and for such time period(s) which the arbitrator(s) determine to be reasonable and enforceable. Furthermore, any period of restriction or covenant herein stated shall not include any period of violation or period of time required for arbitration or litigation to enforce such restriction or covenant.

 

12.     INDEMNIFICATION. Company shall indemnify and defend Employee for acts or omissions performed by the Employee in the scope of his employment and in a manner reasonably believed to be lawful providing that Employee’s acts or omission do not constitute gross negligence, recklessness, willful misconduct, or the intentional infliction of harm.

 

13.     ASSIGNMENT, SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors and assigns. The Company shall assign or otherwise transfer its rights under this Agreement to any successor or affiliated business or corporation (whether by sale or stock, merger, consolidation, sale of assets or otherwise), but this Agreement may not be assigned, nor may the duties hereunder be delegated, by Employee. In the event that the Company assigns or otherwise transfers its rights under this Agreement to any successor or affiliated business or corporation (whether by sale of stock, merger, consolidation, sale of assets or otherwise), for all purposes of this Agreement, the “Company” shall then be deemed to include the successor or affiliated business or corporation to which the Company assigned or otherwise transferred its rights hereunder. Should an ownership transfer event as described above occur, the Company may choose to terminate this Agreement, in which case Section 7(D) (Termination Without Good Cause – Severance Pay) would apply. Such action will not be deemed a Termination for Good Cause.

 

14.     NOTICE. Any notice required or which may be given under the provisions of this Agreement shall be in writing and shall be personally delivered or sent by certified mail, return receipt requested. All notices shall be deemed to have been given on the date personally delivered or, if mailed, on the date received or three (3) business days after the date of mailing, whichever is earlier. If mailed to Company, such notice shall be mailed to its then principal office. If mailed to Employee, it shall be addressed to Employee’s home address then shown on Company’s records.

 

15.     GOVERNING LAW. This Agreement shall be subject to, governed by and interpreted in accordance with the laws of the State of Ohio without regard to its rules as to conflicts of laws.

 

16.     ARBITRATION OF DISPUTES. All disputes and controversies of every kind and nature between the Company and Employee arising out of or in connection with this Agreement, including, but not limited to, the existence, validity, interpretation or meaning, performance or nonperformance, breach, continuance, termination, or any claim of discrimination by the Employee, shall be submitted to arbitration with the American Arbitration Association in Hamilton County, Ohio in accordance with its procedures and guidelines. The parties hereby agree that the decision of such arbitration shall be a binding and final decision upon the parties.

 

17.     SEVERABILITY. Each of the provisions of this Agreement shall stand independently and severally, and the invalidity of any one Section or portion thereof shall not affect the validity of any other Section. In the event any Section or portion thereof shall be construed to be invalid, no other Section of this Agreement shall be affected thereby.

 

 

 

 

 

 

18.     SURVIVAL. Any provision of the Agreement which imposes an obligation after termination of employment under this Agreement shall survive the termination of employment hereunder and shall be binding upon the parties hereto.

 

19.     ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and understanding between the Company and Employee and shall supersede all prior oral or written statements of any kind whatsoever made by the parties. No statement subsequent to this Agreement purporting to modify any of its terms and conditions shall be binding unless expressly agreed to in writing and signed by both the Company and Employee. The foregoing restrictions shall not apply with respect to any change by the Company of the Employee’s compensation or benefits pursuant to Section 4 or to any change in the Employee’s title or duties to which Employee has acquiesced or consented.

 

20.     WAIVER. No waiver by either party of any breach of this Agreement by the other party shall operate or be construed as a waiver of any subsequent breach of the same or any other provision. No waiver shall be effective unless in writing.

 

IN WITNESS WHEREOF, the parties have hereunto set their hands effective as of the date first above written.

 

	
EMPLOYEE: Anthony A. Cook

 

 

 

By:    /s/ Anthony A. Cook 

Anthony A. Cook

 

 

Date:   May 31, 2016
	  	
COMPANY: DCP Holding Company

 

 

 

By:   /s/ Stephen T. Schuler, DMD

               Stephen T. Schuler, DMD

               Chairman of the Board

 

Date:   May 31, 2016

 

 

 

 

 

  

EXHIBIT “A”

 

DCP HOLDING COMPANY POSITION DESCRIPTION

 

	POSITION TITLE: 	President
	 	 
	REPORTS TO:	Board of Directors
	 	 
	
PURPOSE:
	
Responsible for the direction and administration of DCP Holding Company in accordance with Board policy, sound business practices, and the legal requirements of all states in which the Company is authorized to do business.

 

DUTIES AND RESPONSIBILITIES:

 

	
1.
	
ADMINISTRATIVE MANAGEMENT

 

	 	
A.
	
Direct all areas of staff and Human Resource Administration.

 

	 	
B.
	
Prescribe duties, limitations and responsibility of staff through effective position descriptions, encouraging success and ongoing communication.

 

	 	
C.
	
Maintain effective, responsive and cost-conscious daily operations.

 

	
2.
	
BOARD RELATIONS

 

	 	
A.
	
Develop and recommend corporate objectives, plans and policies to the Board.

 

	 	
B.
	
Implement corporate objectives, plans and policies approved by the Board.

 

	 	
C.
	
Plan and coordinate all Board and Board Committee meetings with the Board Chair or Committee Chair.

 

	 	
D.
	
Establish effective communication and rapport with all Board Members.

 

	
3.
	
PROVIDER RELATIONS

 

	 	
A.
	
Recognizing providers are the DCP Holding Company product - continually promote their skills, quality, cost-effectiveness and value to all public.

 

	 	
B.
	
Establish leadership, stability and effective communication with all DCP Holding Company providers.

 

	 	
C.
	
Continued awareness that the success of DCP Holding Company and their providers grow together.

 

	
4.
	
CUSTOMER RELATIONS

 

	 	
A.
	
Actively promote DCP Holding Company in all Marketing, Sales, Public Relations, and Community activity.

 

	 	
B.
	
Strategize that the DCP Holding Company product is placed effectively before the public with emphasis on “Agent/Broker”

 

 

 

 

 

 

	 	
C.
	
Continually monitor the success, quality and effectiveness of DCP Holding Company marketing

 

	
5.
	
CORPORATE PROFITABILITY

 

	 	
A.
	
Develop plans for future DCP Holding Company growth while ensuring the soundness of corporate finances and profitability.

 

JOB SPECIFICATIONS:

	 	-	Degree in relevant field of study or related equal job experience.
	 	
-
	
Five to seven years of related experience in the health/dental insurance field in an executive management position, where budgetary, policy and operational decisions have been made.

 

 

 

 

 

 

EXHIBIT “B”

 

ADDENDUM TO DCP HOLDING COMPANY PRESIDENT EMPLOYMENT AGREEMENT

 

The salary range of the President shall be reviewed and adjusted annually as recommended by the Compensation and Benefits Committee and approved by the Board of Directors. The Base Compensation for 2016 shall be $427,000.00.

 

	ANNUAL INCENTIVE PLAN	 	Value 	RSUs
	 	 	 	 
	CASH AWARD	 	 	 
	
Threshold
	
15% of Base
	
$ 64,050.00
	
 

	
Target
	
30% of Base
	
$128,100.00
	
 

	
Stretch
	
45% of Base
	
$192,150.00
	
 

	
Maximum
	
60% of Base
	
$256,200.00
	
 

	 	 	 	 
	LONG TERM INCENTIVE PLAN	 	 	 
	 	 	 	 
	A) RSU AWARD	5% of Base 	$21,350.00	20 RSUs
	B) CASH AWARD	 	 	 
	 Threshold 	10% of Base	$42,700.00 	 
	 Target	15% of Base	$64,050.00   	 
	 Maximum	25% of Base 	$106,750.00  	 

 

 

 

 

 

 

2016 ANNUAL LONG TERM INCENTIVE BONUS DETAIL

 

A.     Restricted Share Unit (“RSU”) Award – Retention Based

 

The stock award for DCP’s President and CEO is authorized under the “DCP Holding Company Amended and Restated 2006 Dental Care Plus Management Equity Incentive Plan” (the “Management Incentive Plan”) and is subject to the “Dental Care Plus and DCP Holding Company Deferred Compensation Plan”. Stock RSUs are awarded in an amount equal to five percent (5%) of base salary and is considered “Long Term” as it vests incrementally over four years, 10% on December 31 of the first year, 20% at the end of the second year, 30% at the end of the third year and 40% at the end of the fourth year. There are no performance targets other than longevity with the Company.

 

RSU AWARD BASED ON 5% OF BASE SALARY OF $427,000.00                 20 RSUs

 

B.     Cash Award – Performance Based

 

The Long Term Incentive (LTI) is a bonus designed to motivate the CEO to achieve long term success for the Company, as well as assist in the retention of the President and CEO over time. LTI bonus compensation is based on achieving sustainable growth in shareholder value over a period of three years, January 1, 2016 through December 31, 2018 and is measured by the average yearly increase in the “Adjusted Share Value” (ASV) of a Common Share.

 

ADJUSTED SHARE VALUE OF A COMMON SHARE AT 12/31/2015 = $1,011.72

 

BASE SALARY 2016: $427,000.00 

 

	
Level
	
Definition
	
3yr Ave.
	
Adjusted Share Value
	
Cash

	
 
	  	  	  On 12/31/2018	  
	
Threshold
	
10% of Base
	
8%
	
$1,274.48
	
$42,700.00

	
Target
	
15% of Base
	
10%
	
$1,346.60
	
$64,050.00

	
Maximum
	
25% of Base
	
14%
	
$1,498.91
	
$106,750.00

 

 

Notes:

 

	1. 	The ASV of a Common Share at the end of any one year shall mean the total book value of the all classes of Common Shares of the Company, as determined from the audited financial statements of the Company on the last day of business in that year, increased by: (a) the aggregate amount of all provider withhold return payments paid in that year; (b) the aggregate amount of dividends on all classes of Common Shares paid in that year; and (c) the aggregate amount of Common Share redemptions paid in that year and decreased by: (a)the aggregate amount received from the sale of all classes of Common Shares in that year. This amount shall be divided by the total number of all classes of Common Shares outstanding on the first day of business of that year.
	
2.
	
Actual LTI compensation will be paid on a continuum between Threshold and Target levels and Target and Maximum levels.

	3. 	No LTI compensation will be paid if the average increase in the ASV of a Common Share is less than eight percent (8%) and no additional LTI compensation will be paid if the average increase in the ASV of a Common Share is over fourteen percent (14%).

 

 

 

 

 

  

	
4.
	
With Board of Director approval, a new multi-year performance measurement period begins each new year.

 

	
5.
	
In the event of a Change of Control, as defined in the Management Equity Incentive Plan, the ASV of a Common Share as of December 31, 2018 shall be deemed to be the portion of the Enterprise Value of the Company, as defined in Article Fourth, Section 8(h)(ii)(C) of the Company’s Amended Articles of Incorporation allocated to the Common Shares divided by the total number of all classes of Common Shares outstanding as of the date on which the Change of Control occurs and the Long Term Incentive bonus shall be determined as of that date and paid within thirty (30) days thereafter.

 

2016 ANNUAL INCENTIVE SHORT TERM BONUS DETAIL

 

The Annual Incentive (Short Term Bonus) compensation is designed to motivate the CEO to meet and/or exceed goals for budget performance on 1) 2016 Operating Revenue (OR), 2) 2016 Adjusted Net Operating Income (ANOI), and 3) Discretion/MOB (MOB). The CEO’s individual goals are established by the Corporate Affairs Committee, and achievement of these goals is determined at the discretion of the Corporate Affairs Committee. Adjusted Net Operating Income is equal to Net Operating Income plus the amount of any provider withhold return approved by the Board of Directors during 2016. These performance criteria are weighted respectively as 30%, 50% and 20% of the total Annual Incentive Short Term Bonus.

 

TOTAL OPERATING REVENUE (2016 BUDGET OF $105,928,938)

	
Level
	
Definition
	
Performance
	
2016 OR
	
Bonus paid

	
Threshold
	
15% of Base
	
90% Budget
	
  $ 95,336,044
	
$ 19,215.00

	
Target
	
30% of Base
	
100% Budget
	
$ 105,928,938
	
$ 38,430.00

	
Stretch
	
45% of Base
	
115% Budget
	
$ 121,818,279
	
$ 57,645.00

	
Maximum
	
60% of Base
	
130% Budget
	
$ 137,707,619
	
$ 76,860.00

 

ADJUSTED NET OPERATING INCOME (2016 BUDGET OF $3,600,607)

	
Level
	
Definition
	
Performance
	
2016 ANOI
	
Bonus paid

	
Threshold
	
15% of Base
	
75% Budget
	
$ 2,700,455.00
	
$ 32,025.00

	
Target
	
30% of Base
	
100% Budget
	
$ 3,600,607.00
	
$ 64,050.00

	
Stretch
	
45% of Base
	
115% Budget
	
$ 4,140,698.00
	
$ 96,075.00

	
Maximum
	
60% of Base
	
130% Budget
	
$ 4,680,789.00
	
$128,100.00

 

DISCRETION/MOB

	
Level
	
Definition
	
Achievement
	  	
Bonus paid

	
Threshold
	
15% of Base
	
90% of Goals
	  	
$ 12,810.00

	
Target
	
30% of Base
	
100% of Goals
	  	
$ 25,620.00

	
Stretch
	
45% of Base
	
115% of Goals
	  	
$ 38,430.00

	
Maximum
	
60% of Base
	
130% of Goals
	  	
$ 51,240.00

 

Notes:

	 	
1.
	
If performance is under Threshold Level in any criteria, no bonus is paid for that criteria.

 

	 	
2.
	
No additional Bonus is paid for performance beyond Maximum Level.

 

	 	
3.
	
Actual Bonus paid is calculated and paid on a continuum between any two performance levels.

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