Document:

exv10w1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

     This Executive Employment Agreement (“Agreement”) is entered into as of May 9, 2008 (the
“Effective Date”), by and between Patriot Risk Management, Inc. (the “Company”), a corporation
organized under the laws of Delaware, with its principal administrative office at 401 East Las Olas
Boulevard, Suite 1540, Fort Lauderdale, Florida 33301, and Steven M. Mariano (“Executive”).

     WHEREAS, the Company wishes to assure itself of the services or continued services of
Executive for the period provided in this Agreement; and

     WHEREAS, Executive is willing to serve (or continue to serve) in the employ of the Company on
a full-time basis for said period.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as follows:

	1.	 	Position and Responsibilities. The Company hereby employs Executive and Executive accepts
employment as Chairman, Chief Executive Officer and President of the Company, on the terms and
conditions herein set forth. During the Employment Term, the Executive shall serve as the
Chairman, Chief Executive Officer and President of the Company. Executive shall have such
duties, responsibilities and authority as is commensurate with his position and shall report
solely and directly to the Company’s Board of Directors (the “Board”). During said period,
Executive also agrees to serve, if elected, as an officer and director of any direct or
indirect subsidiary of the Company (individually, a “Subsidiary” or collectively, the
“Subsidiaries”). In accordance with the Company’s bylaws, the Company shall nominate
Executive as a director for shareholder approval at each annual meeting after the Effective
Date during the Employment Term (as defined below) in which his term as a director is due to
expire.

	2.	 	Employment Term. The period of Executive’s employment under this Agreement shall commence as
of the Effective Date and shall continue until December 31, 2011 (the “Initial Term”) provided
that such term shall be automatically extended for an additional 12-month period commencing at
the end of the Initial Term, and successively thereafter for additional 12-month periods (each
such period an “Additional Term”), unless either party shall have given notice to the other
party that such party does not desire to extend the term of this Agreement, such notice to be
given at least ninety (90) days prior to the end of the Initial Term or the applicable
Additional Term (the Initial Term and any Additional Terms, if applicable, collectively, the
“Employment Term”). In the event a Change in Control (as defined below) occurs on or after
January 1, 2011, the Employment Term shall be extended and continue in effect until at least
the second anniversary of such Change in Control. The date of expiration of the Employment
Term shall be referred to herein as the “Termination Date.” Upon the Termination Date,
Executive shall be deemed to resign from (i) the Board or board of directors of the Company or
any Subsidiary or any other board to which he has been appointed or nominated by or on behalf
of the Company, (ii) any position with the Company or any Subsidiary, including, but not
limited to, as an officer of the Company or any Subsidiary,

 

 

	 	 	and (iii) any fiduciary positions with respect to the employee benefit plans of the Company
or any Subsidiary.

	3.	 	Extent of Services. During the Employment Term, Executive shall devote his entire attention
and energy to the business and affairs of the Company and Subsidiaries on a full-time basis
and shall not be engaged in any other business activity, regardless of whether such business
activity is pursued for gain, profit or other pecuniary advantage, that interferes materially
with the business of the Company, but this shall not be construed as preventing Executive from
investing his assets in such form or manner as will not require any services on the part of
Executive in the operation of the affairs of the companies in which such investments are made
and will not otherwise conflict with the provisions of this Agreement. Executive may devote
reasonable time to activities such as supervision of personal investments and activities
involving professional, charitable, educational, religious, and similar types of activities,
speaking engagements and membership on other boards of directors, provided such activities do
not interfere materially with the business of the Company. The time involved in such
activities will not be treated as vacation time. Executive will be entitled to keep any
amounts paid to him in connection with such activities (e.g., director fees and honoraria).
Full-time, as used above, shall mean a 40-hour workweek, or such longer workweek, as the Board
shall from time to time adopt.

	4.	 	Compensation.

	 	(a)	 	Salary. During the Employment Term, the Company shall pay Executive an annual
salary of not less than $550,000 (“Annual Salary”), payable in accordance with the
Company’s regular payroll procedures. During each year that this Agreement is in
effect, the Company will review possible increases in Executive’s salary at least
annually, with any such increases subject to the determination of the Board or the
Compensation Committee of the Board. Annual Salary shall not be decreased without
Executive’s prior written consent, and the term “Annual Salary” for purposes of this
Agreement shall refer to base salary annualized, as most recently increased.
	 
	 	(b)	 	Bonus. During the Employment Term, Executive shall be eligible to receive an
annual bonus in an amount as may be determined by the Compensation Committee or the
Board, pursuant to a bonus plan that may then be in effect or otherwise, subject to the
attainment of such goals as the Compensation Committee or the Board shall establish and
communicate to Executive within the first ninety (90) days of such fiscal year. It is
the intent of the Company that any annual bonus shall be paid no later than 2 1/2 months
following the end of the calendar year (or, if later, the Company’s tax year) in which
or within which the applicable fiscal year ends and as subject to approval by the Board
of Directors.
	 
	 	(c)	 	Long Term Incentive. During the Employment Term, Executive shall be entitled
to participate in, and receive awards under, any long-term incentive plan (whether
payable in cash, equity or otherwise) maintained by the Company in which other senior
executives of the Company participate, in the discretion of the Compensation Committee
of the Board. In addition, Executive shall receive a

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	 	 	 	grant of 500,000 stock options concurrent with the Company’s initial public
offering, with an exercise price equal to the initial public offering price set by
the Company and its underwriters. Such option options shall be upon such terms as
may be set forth in the long-term incentive plan and accompanying award agreement
pursuant to which such options will be granted, and such terms to include a three
(3) year vesting period, ten (10) year duration, and no less than a ninety (90) day
period to exercise vested options upon termination of Executive’s employment with
the Company for reasons other than Cause (as defined below).

	 	(d)	 	Business Expenses. During the Employment Term, Executive shall be entitled to
prompt reimbursement for all reasonable expenses incurred by him in furtherance of the
business of the Company in connection with Executive’s performance of his duties
hereunder, in accordance with the policies and procedures established for executive
officers of the Company, and provided Executive properly accounts for such expenses.
	 
	 	(e)	 	Club Expenses. During the Employment Term, the Company shall continue to pay
the Executive the club fee and expenses for The Fisher Island Club at the same level in
effect on the Effective Date.
	 
	 	(f)	 	Vacation. During the Employment Term, Executive will be provided four (4)
weeks of vacation per calendar year, prorated based on date of hire, with additional
weeks in accordance with the anniversary dates pursuant to the Company’s vacation
policy.
	 
	 	(g)	 	Automobile Allowance. During the Employment Term, the Company shall pay or
provide the Executive a monthly automobile allowance at the same level in effect on the
Effective Date.
	 
	 	(h)	 	Other Benefits. During the Employment Term, Executive shall be entitled to
participate in all benefit plans offered by the Company including, without limitation,
medical, dental, short-term and long-term disability, life, pension, profit sharing and
nonqualified deferred compensation arrangements, as the Board may determine in its
discretion, on the same basis as other executives of the Company, subject in all cases
to the respective terms of such plans. The Company reserves the right to modify,
suspend or discontinue any and all of the plans, practices, policies and programs at
any time without recourse by the Executive, so long as the Company takes such action
generally with respect to all other executive officers.

	5.	 	Termination.

	 	(a)	 	Death. This Agreement and Executive’s employment hereunder shall terminate
immediately upon Executive’s death.
	 
	 	(b)	 	Disability. To the extent permitted by law, if Executive is: (i) unable to
engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, (ii)

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	 	 	 	by reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of
not less than twelve (12) months, receiving income replacement benefits for a period
of not less than three months under the Company’s disability or health plan, or
(iii) determined to be totally disabled by the Social Security Administration, then
upon at least 60 days’ prior written notice to Executive, if such is consistent with
applicable law, Executive shall be considered disabled for purposes of this
Agreement and the Company may terminate this Agreement and Executive’s employment
hereunder, unless, within that notice period, Executive shall have resumed
performance of the essential functions of his positions, with or without reasonable
accommodation.

	 	(c)	 	Termination by the Company.

	 	(i)	 	Termination for Cause. The Company may terminate this
Agreement and Executive’s employment hereunder at any time for Cause. As used
herein, “Cause” shall mean:

	 	(A)	 	a material breach by Executive of Executive’s
duties and obligations hereunder, including but not limited to gross
negligence in the performance of his duties and responsibilities or the
willful failure to follow the Board’s directions, in each case, which
causes or is likely to cause a material injury to the business of the
Company, in the reasonable, good faith determination of the Board;
provided, however, that Cause shall not exist unless the Company has
provided Executive with written notice setting forth the existence of
the non-performance, failure or breach and Executive shall not have
cured same within thirty (30) days after receiving such notice;
	 
	 	(B)	 	willful misconduct by Executive that, in the
reasonable determination of the Board, has caused or is likely to cause
material injury to the reputation or business of the Company;
	 
	 	(C)	 	any criminal act of fraud, material
misappropriation or other material dishonesty by Executive; or
	 
	 	(D)	 	Executive’s conviction of a felony, but
specifically excluding any conviction based on vicarious liability
(with “vicarious liability” meaning liability based on acts of the
Company for which the Executive is charged solely as a result of his
service with the Company and in which he was not directly involved and
did not have prior knowledge of such actions or intended actions);

Executive shall be considered to have been discharged for Cause if the
Company determines within 30 days after his resignation or discharge that
discharge for Cause was warranted. In the event of termination for Cause,
the Company shall be obligated to pay Executive only Executive’s salary

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up to the date of termination and any earned but unpaid bonus with respect
to any calendar year ended prior to the date of termination.

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

In the case of a discharge of Executive for Cause, the Company shall provide
a Notice of Termination, which shall include a copy of a resolution duly
adopted by the Board at a meeting called and held for such purpose (after
reasonable notice to Executive and reasonable opportunity for Executive,
together with Executive’s counsel, to be heard before the Board prior to
such vote), finding that, in the reasonable and good faith opinion of the
Board, Executive was guilty of conduct constituting Cause.

	 	(ii)	 	Termination Without Cause. Notwithstanding anything contained
herein to the contrary, the Company also may terminate this Agreement and
Executive’s employment hereunder for reason other than death, Disability, or
Cause upon no less than 60 days’ prior written notice to Executive. The
Company shall be deemed to have terminated this Agreement without Cause in the
event that this Agreement is terminated as a result of the Company’s giving
notice of non-renewal prior to the end of the Initial Term or any Additional
term as provided in Section 2 above.

	 	(d)	 	Termination by Executive Without Good Reason. Executive may terminate this
Agreement and his employment hereunder for any reason whatsoever, upon no less than 60
days’ prior written notice to the Company.
	 
	 	(e)	 	Termination by Executive For Good Reason. If Executive resigns for Good
Reason, then Executive’s termination shall be treated as a termination by the Company
without Cause pursuant to Section 5(c)(ii) hereof. As used herein, a resignation for
“Good Reason” shall mean a resignation by Executive within ninety (90) days following
the initial existence of one or more of the following conditions arising without
Executive’s consent:

	 	(i)	 	a material reduction in Executive’s Annual Salary;
	 
	 	(ii)	 	a material diminution in Executive’s authority, duties, or
responsibilities;
	 
	 	(iii)	 	a relocation of Executive’s principal place of employment by
more than fifty (50) miles from its location at the Effective Date of this
Agreement; or

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	 	(iv)	 	any other action or inaction that constitutes a material breach
by the Company of this Agreement;

provided, however, that Good Reason shall not exist unless Executive has provided
the Company with a written notice setting forth the reason(s) for the existence of
Good Reason within ninety (90) days of the initial existence of the condition(s),
and the Company has not cured the reason(s) for the existence of Good Reason within
thirty (30) days after receiving such notice.

	 	(f)	 	Payments Upon Termination.

	 	(i)	 	Termination of Employment for any Reason: The following
payments will be made upon Executive’s termination of employment for any
reason:

	 	(A)	 	Earned but unpaid Annual Salary through the
date of termination.
	 
	 	(B)	 	Bonus and all other forms of incentive
compensation earned but unpaid at the time of termination for which the
performance measurement period has ended and the performance goals
attained (if applicable).
	 
	 	(C)	 	Accrued but unpaid vacation.
	 
	 	(D)	 	Amounts payable under any of the Company’s
employee benefit plans in accordance with the terms of those plans.
	 
	 	(E)	 	Unreimbursed expenses incurred by Executive on
the Company’s behalf.

	 	(ii)	 	Termination by Company without Cause or by Executive for Good
Reason. In the event that the Company terminates this Agreement without Cause
or the Executive terminates this Agreement for Good Reason, Executive shall be
entitled to receive (x) a lump sum severance payment equal to three hundred
percent (300%) of the sum of Executive’s Annual Salary at the time of
termination (or, if greater, Annual Salary prior to the occurrence of Good
Reason) plus Executive’s Average Annual Bonus, and (y) reimbursement of the
full cost for the continuation of Company-provided group health plan coverage
for the Executive and his eligible dependents (“COBRA coverage”), if the
Executive elects COBRA coverage, for eighteen (18) months following the
employment termination (together, the “Severance Benefits”).

	 	(A)	 	If the Company is obligated by law (including
the WARN Act or any similar state or foreign law) to pay Executive
severance pay, a termination indemnity, notice pay, or the like, then
the amount of such legally required pay shall reduce the Severance
Benefits hereunder.

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	 	(B)	 	Notwithstanding anything herein to the
contrary, the payment of any Severance Benefits hereunder to Executive
shall be subject to the execution by Executive (and failure to revoke)
of a general release of the Company and its affiliates of any and all
claims under this Agreement or related to or arising out of Executive’s
employment hereunder in the form attached hereto as Exhibit A.
	 
	 	(C)	 	For purposes of this Agreement, “Average Annual
Bonus” means the average bonus for the three (3) fiscal years preceding
the termination of employment.

	 	(iii)	 	Termination Due to Disability. In the event that Executive
employment terminates due to his Disability, the Company shall continue paying
Executive’s Base Salary until the third anniversary of such termination;
provided that, the payments made by the Company under this paragraph shall be
reduced, dollar-for-dollar, by the payment made to Executive under any
long-term disability plan, policy or program provided or contributed to by the
Company.
	 
	 	(iv)	 	Nonduplication of Benefits. If Executive receives the
Severance Benefits under this Section 5, he shall not be entitled to also
receive the Change in Control Compensation under Section 6 hereof.
	 
	 	(v)	 	General Release. Notwithstanding anything herein to the
contrary, the payment of any Severance Benefits under this Section 5 shall be
subject to the execution by Executive and delivery to the Company, within
forty-five (45) days of employment termination (and failure to revoke), of a
general release of the Company and its affiliates of any and all claims under
this Agreement or related to or arising out of Executive’s employment hereunder
in the form attached hereto as Exhibit A.

	6.	 	Change in Control.

	 	(a)	 	Change in Control Severance Compensation. If within twenty-four (24) months
following a Change in Control (as defined below) Executive’s employment with the
Company is terminated by the Company without Cause or Executive resigns for Good
Reason, then Executive shall be entitled to receive from the Company (x) a lump sum
cash severance payment equal to three hundred percent (300%) of the sum of Executive’s
Annual Salary (or, if greater, Annual Salary prior to the occurrence of Good Reason)
plus Executive’s Average Annual Bonus, and (y) reimbursement for COBRA coverage, if the
Executive elects COBRA coverage, for eighteen (18) months following the employment
termination (together, the “Change in Control Compensation”). Subject to Section 10
hereof, the cash portion of the Change in Control Compensation shall be payable in a
single lump sum payment sum within ten (10) days following the date of termination.
The Executive shall be entitled to the Change in Control Compensation if, within six
(6) months prior to the Change in Control, at the request or direction of a participant
in a potential acquisition, the Company

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	 	 	 	terminates the Executive’s employment without Cause or causes a condition
constituting Good Reason.

	 	(b)	 	Change in Control. For purposes of this Agreement, “Change in Control” shall
mean the occurrence of any of the following events:

	 	(i)	 	the date any one person, or more than one “person” acting as a
group, acquires (or has acquired during the twelve-month period ending on the
date of the most recent acquisition by such person(s)) ownership of common
stock possessing 50% or more of the total voting power of the common stock of
the Company;
	 
	 	(ii)	 	individuals who at any time during the term of this Agreement
constitute the board of directors of the Company (the “Incumbent Board”) cease
for any reason to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the date hereof whose election or
nomination for election was approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination) shall be, for
purposes of this clause (ii) considered as though such person were a member of
the Incumbent Board;
	 
	 	(iii)	 	any consolidation or merger to which the Company is a party,
if following such consolidation or merger, stockholders of the Company
immediately prior to such consolidation or merger shall not beneficially own
securities representing at least 51% of the combined voting power of the
outstanding voting securities of the surviving or continuing corporation; or
	 
	 	(iv)	 	any sale, lease, exchange or other transfer (in one transaction
or in a series of related transactions) of all, or substantially all, of the
assets of the Company, other than to an entity (or entities) of which the
Company or the stockholders of the Company immediately prior to such
transaction beneficially own securities representing at least 51% of the
combined voting power of the outstanding voting securities.

	 	(c)	 	Nonduplication of Benefits. If Executive receives the Change in Control
Compensation under this Section 6, he shall not be entitled to also receive the
Severance Benefits under Section 5(c)(ii) or 5(e) hereof.
	 
	 	(d)	 	General Release. Notwithstanding anything herein to the contrary, the payment
of any Change in Control Compensation hereunder to Executive shall be subject to the
execution by Executive and delivery to the Company, within forty-five (45) days of the
employment termination (and failure to revoke), of a general release of the Company and
its affiliates of any and all claims under this Agreement or related to or arising out
of Executive’s employment hereunder in the form attached hereto as Exhibit A.

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	7.	 	Tax and Other Restrictions. Notwithstanding anything herein to the contrary:

	 	(a)	 	Excess Parachute Payments. In the event it shall be determined that any
payment or distribution by the Company to or for the benefit of Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required under this
Section 7) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended, (the “Code”) or if any interest or
penalties are incurred by the Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, being hereinafter collectively
referred to as the “Excise Tax”), then Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that, after payment by
Executive of all taxes (including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.
	 
	 	(b)	 	Subject to the provisions of paragraph (c), below, all determinations required
to be made under this Section 7, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by the independent public accountants
then regularly retained by the Company (the “Accounting Firm”) in consultation with
counsel acceptable to Executive, which shall provide detailed supporting calculations
both to the Company and Executive within fifteen (15) business days of the receipt of
notice from Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm and such
counsel shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 7, shall be paid by the Company to the Executive within five
(5) days of the receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it shall furnish Executive with
a written opinion that failure to report the Excise Tax on Executive’s applicable
federal income tax return would not result in the imposition of a negligence or similar
penalty. Any good faith determination by the Accounting Firm shall be binding upon the
Company and Executive. As a result of the uncertainty in the application of Code
Section 4999 at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments that will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant to
paragraph (c), below, and Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or for the
benefit of Executive.

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	 	(c)	 	Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notification shall be given as soon as practicable but no later
than fifteen (15) business days after the Executive is informed in writing of such
claim and shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such claim prior to the
expiration of the thirty (30)-day period following the date on which Executive gives
such notice to the Company (or such shorter period ending on the date that any payment
of taxes with respect to such claim is due). If the Company notifies Executive in
writing prior to the expiration of such period that it desires to contest such claim,
Executive shall:

	 	(i)	 	Give the Company any information reasonably requested by the
Company relating to such claim,
	 
	 	(ii)	 	Take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company,
	 
	 	(iii)	 	Cooperate with the Company in good faith in order effectively
to contest such claim, and
	 
	 	(iv)	 	Permit the Company to participate in any proceedings relating
to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection with
such contest and shall indemnify and hold Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this paragraph (c), the
Company shall control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner; and Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if the Company directs
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Executive on an interest-free basis and shall indemnify
and hold Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with

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respect to which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.

	 	(d)	 	Payments in Excess of $1 Million. If any payment hereunder, including but not
limited to, a Severance Payment under Section 5(c)(ii) or 5(e) or Change in Control
Compensation under Section 6, would not be deductible by the Company for federal income
tax purposes by reason of Code Section 162(m), or any similar or successor statute
(excluding Code Section 280G), such payment shall be deferred and the amount thereof
shall be paid to Executive at the earliest time that such payment shall be deductible
by the Company.

	8.	 	Covenants of the Executive and the Company.

	 	(a)	 	Nonsolicitation. During the Employment Term and for a period of one year
thereafter, Executive shall not, directly or indirectly, (i) employ, solicit for
employment or otherwise contract for the services of any individual who is or was an
employee of the Company or any of its Subsidiaries during the Employment Term; (ii)
otherwise induce or attempt to induce any employee of the Company or its Subsidiaries
to leave the employ of the Company or such Subsidiary, or in any way knowingly
interfere with the relationship between the Company or any such Subsidiary and any
employee respectively thereof, provided, however, that this clause (ii) shall not
prohibit the activities described in the preceding clause (i) following termination of
the Employment Term with respect to any individual who was not an employee of the
Company or its Subsidiaries during the Employment Term; or (iii) induce or attempt to
induce any customer, supplier, broker, agent, licensee or other business relation of
the Company or any Subsidiary of the Company to cease doing business with the Company
or such Subsidiary, or interfere in any way with the relationship between any such
customer, supplier, broker, agent, licensee or business relation and the Company or any
subsidiary thereof.
	 
	 	(b)	 	Nondisclosure. For the Employment Term and thereafter, (i) Executive shall not
divulge, transmit or otherwise disclose (except as legally compelled by court order,
and then only to the extent required, after prompt notice to the Company’s Chief
Executive Officer and Chief Legal Officer of any such order), directly or indirectly,
other than in the regular and proper course of business of the Company and its
Subsidiaries, any confidential knowledge or information with respect to the operations
or finances of the Company or any of its Subsidiaries or with respect to confidential
or secret processes, methods, services, techniques, reinsurance arrangements, customers
or plans with respect to the Company or its Subsidiaries and (ii) Executive will not
use, directly or indirectly, any confidential information for the benefit of anyone
other than the Company and its Subsidiaries; provided, however, that Executive has no
obligation, express or

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	 	 	 	implied, to refrain from using or disclosing to others any knowledge or information
which is or hereafter shall become available to the general public other than
through disclosure by Executive, or as requested by regulatory bodies or as required
by judicial courts. All new processes, techniques, know-how, methods, inventions,
plans, products, patents and devices developed, made or invented by Executive, alone
or with others, while an employee of the Company which are related to the business
of the Company and its Subsidiaries shall be and become the sole property of the
Company, unless released in writing by the Board, and Executive hereby assigns any
and all rights therein or thereto to the Company.

	 	(c)	 	Nondisparagement. During the Employment Term and thereafter, Executive shall
not take any action to disparage or criticize the Company or its Subsidiaries or their
respective employees, directors, owners or customers or to engage in any other action
that injures or hinders the business relationships of the Company or its Subsidiaries.
During the Employment Term and thereafter, the Company shall not take any action to
disparage or criticize Executive to any third parties. Nothing contained in this
Section 8(c) shall preclude either Executive or the Company from (i) making truthful
statements or disclosures that are required by applicable law, regulation or legal
process or (ii) enforcing their respective rights under this Agreement.
	 
	 	(d)	 	Noncompetition. In consideration of the payment to Executive of the Severance
payments pursuant to Section 5(f)(ii) or 5(e) or Change in Control Compensation
pursuant to Section 6, Executive hereby agrees that, from and after the Termination
Date, and for twelve (12) months thereafter, Executive shall not participate as a
partner, joint venturer, proprietor, shareholder, employee or consultant, or have any
other direct or indirect financial interest (other than a less than 10% interest in a
corporation whose shares are regularly traded on a national securities exchange or in
the over-the-counter market), including, without limitation, the interest of a creditor
in any form, in, or in connection with, any business competing directly or indirectly
with the business of the Company and its Subsidiaries in any geographic area where the
Company and its Subsidiaries are actively engaged in conducting business as of the
Termination Date.
	 
	 	(e)	 	Return of Company Property. All files, records, correspondence, memoranda,
notes or other documents (including, without limitation, those in computer-readable
form) or property relating or belonging to the Company or its Subsidiaries or
affiliates, whether prepared by Executive or otherwise coming into Executive’s
possession in the course of the performance of his services under this Agreement, shall
be the exclusive property of the Company and shall be delivered to the Company, and not
retained by Executive (including without limitations, any copies thereof), promptly
upon request by the Company and, in any event, within 60 days following the Termination
Date.
	 
	 	(f)	 	Scope. The Company and Executive further acknowledge that the time, scope,
geographic area and other provisions of this Section 8 have been specifically
negotiated by sophisticated commercial parties and agree that all such provisions

12

 

	 	 	 	are reasonable under the circumstances of the activities contemplated by this
Agreement. In the event that the agreements in this Section 8 shall be determined
by any court of competent jurisdiction to be unenforceable by reason of their
extending for too great a period of time or over too great a geographical area or by
reason of their being too extensive in any other respect, they shall be interpreted
to extend only over the maximum geographical area as to which they may be
enforceable and/or to the maximum extent in all other respect as to which they may
be enforceable, all as determined by such court in such action.

	 	(g)	 	Enforcement. Both parties recognize that the services to be rendered under
this Agreement by Executive are special, unique and of extraordinary character and that
in the event of the breach by Executive or the Company of any of the terms and
conditions of this Section 8 to be performed by each party, then the Company or the
Executive shall be entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction, either in law or in equity, to obtain damages for
any breach hereof, or to enforce the specific performance hereof by Executive or the
Company or to enjoin Executive or the Company from performing acts prohibited above
during the period herein covered, but nothing herein contained shall be construed to
prevent such other remedy in the courts as the Company or the Executive may elect to
invoke.
	 
	 	(h)	 	Other. If Executive competes with the Company or otherwise violates any of the
restrictions contained in this Section 8, the Company shall have no obligation to pay
the Severance Payment or Change of Control Compensation or any remaining installment
thereof to Executive.

	9.	 	Indemnification and Insurance. The Company shall provide Executive (including Executive’s
heirs, executors and administrators), at the Company’s expense, with coverage under a standard
directors’ and officers’ liability insurance policy, and shall indemnify Executive (and
Executive’s heirs, executors and administrators) to the fullest extent permitted under
Delaware law against all expenses and liabilities reasonably incurred by Executive in
connection with or arising out of any action, suit or proceeding in which Executive may be
involved by reason of Executive’s having been a director or officer of the Company (whether or
not Executive continues to be a director or officer at the time of incurring such expenses or
liabilities), such expenses and liabilities to include, but not be limited to, judgments,
court costs and attorneys’ fees and the cost of reasonable settlements. The Company shall
cover the Executive under directors and officers liability insurance both during and, while
potential liability exists, after the term of this Agreement in the same amount and to the
same extent as the Company covers its other officers and directors. In the event the
referenced D&O liability policy is a “wasting” policy in that defense and litigation costs
reduce the amount of insurance available for indemnification purposes, the Company agrees to
provide Executive with full and complete indemnification beyond the coverage limit offered by
the D&O policy.

	10.	 	Application of Code Section 409A.

	 	(a)	 	General. To the extent applicable, it is intended that this Agreement comply
with the provisions of Code Section 409A, so as to prevent inclusion in gross income

13

 

	 	 	 	of any amounts payable or benefits provided hereunder in a taxable year that is
prior to the taxable year or years in which such amounts or benefits would otherwise
actually be distributed, provided or otherwise made available to Executive. This
Agreement shall be construed, administered, and governed in a manner consistent with
this intent and the following provisions of this Section shall control over any
contrary provisions of this Agreement.

	 	(b)	 	Restrictions on Specified Employees. In the event Executive is a “specified
employee” within the meaning of Code Section 409A(a)(2)(B)(i) and delayed payment of
any amount or commencement of any benefit under this Agreement is required to avoid a
prohibited distribution under Code Section 409A(a)(2), then amounts payable in
connection with Executive’s termination of employment will be delayed and paid, with
interest at the short term applicable federal rate as in effect as of the termination
date, in a single lump sum six months thereafter (or if earlier, the date of
Executive’s death); provided, however, that payments to which Executive is entitled
under Section 5(f)(ii)and 6(a) of this Agreement need not be delayed under this Section
10(b) to the extent those payments would comply with the requirements of Treas. Reg.
§1.409A-1(a)(b)(9), which generally requires that such payments not exceed two times
the lesser of (1) Executive’s annualized compensation based on his annual rate of pay
in the year before the date of termination or (2) the Code Section 401(a)(17) limit
applicable to qualified plans during the year of Executive’s date of termination, or
would otherwise be payable without delay without violating Section 409A.
	 
	 	(c)	 	Separation from Service. Payments and benefits hereunder upon Executive’s
termination or severance of employment with the Company that constitute deferred
compensation under Code Section 409A payable shall be paid or provided only at the time
of a termination of Executive’s employment which constitutes a “separation from
service” within the meaning of Code Section 409A (subject to a possible six-month delay
pursuant to the subsection (b) above).
	 
	 	(d)	 	Separate Payments. For purposes of Code Section 409A, each payment under this
Agreement shall be treated as a right to a separate payment for purposes of Code
Section 409A.
	 
	 	(e)	 	Reimbursements. All reimbursements and in kind benefits provided under this
Agreement, including, but not limited to, payments under Sections 4(d) and 9, shall be
made or provided in accordance with the requirements of Code Section 409A, including,
where applicable, the requirement that (i) any reimbursement is for expenses incurred
during Executive’s lifetime (or during a shorter period of time specified in this
Agreement), (ii) the amount of expenses eligible for reimbursement, or in kind benefits
provided, during a calendar year may not affect the expenses eligible for
reimbursement, or in kind benefits to be provided, in any other calendar year, (iii)
the reimbursement of an eligible expense will be made on or before the last day of the
calendar year following the year in which the expense is incurred, and (iv) the right
to reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit.

14

 

	 	(f)	 	References to Code Section 409A. References in this Agreement to Code Section
409A include both that section of the Code itself and any guidance promulgated
thereunder.

	11.	 	Miscellaneous.

	 	(a)	 	Modification. This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
	 
	 	(b)	 	Waiver. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision of
this Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the specific
term or condition waived and shall not constitute a waiver of such term or condition
for the future as to any act other than that specifically waived.
	 
	 	(c)	 	Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by registered or certified mail to
Executive or the Company at the address set forth below or to such other address as
they shall notify each other in writing:

If to the Company:

Patriot Risk Management, Inc.

401 East Las Olas Boulevard, Suite 1540

Fort Lauderdale, Florida 33301

If to Executive:

To the last mailing address on file with the Company.

	 	(d)	 	Assignment. This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and permitted assigns and Executive and personal
representatives, heirs, legatees and beneficiaries. This Agreement may be assigned by
the Company with the consent of Executive to a fiscally responsible entity that assumes
the obligations set forth herein, but shall not be assignable by Executive.
	 
	 	(e)	 	Applicable Law. This Agreement shall be construed in accordance with the laws
of the State of Florida in every respect, including, without limitation, validity,
interpretation and performance. Any dispute between the parties hereto, arising under
or relating to this Agreement or Executive’s employment with the Company, other than
for an action by the Company for specific performance, injunction or other equitable
remedy to enforce Section 7 hereof shall be settled by an arbitration administered by a
single arbitrator in Fort Lauderdale, Florida. The arbitrator shall be selected upon
mutual agreement of Executive and Company. In the event the parties cannot agree on a
single mediator, each party select one arbitrator and these two arbitrators will select
the third arbitrator who

15

 

	 	 	 	will act as the final arbitrator in the arbitration proceedings. Discovery, motion
practice, and other administrative matters attendant to the litigation shall be
conducted pursuant to the then prevailing discovery and motion rules in the US
District Court for the Southern District of Florida and as interpreted by the
relevant case law. The prevailing party in any such arbitration may be awarded
attorneys’ fees and expenses and judgment upon the award rendered may be entered in
any court having jurisdiction thereof.

	 	(f)	 	Headings. Section headings and numbers herein are included for convenience of
reference only and this Agreement is not to be construed with reference thereto. If
there be any conflict between such numbers and headings and the text hereof, the text
shall control.
	 
	 	(g)	 	Severability. If for any reason any portion of this Agreement shall be held
invalid or unenforceable, it is agreed that the same shall not affect the validity or
enforceability of the remainder hereof. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the parties and
the invalid or unenforceable provision(s), clause(s) or sentence(s) shall be deemed
excised, modified or restricted to the extent necessary to render the same valid and
enforceable and this Agreement shall be construed as if such invalid or unenforceable
provision(s), clause(s), or sentences(s) were omitted. The provisions of this Section
11(g), as well as Sections 8 and 9 hereof, shall survive the termination of this
Agreement.
	 
	 	(h)	 	Entire Agreement. This Agreement contains the entire agreement of the parties
with respect to its subject matter and supersedes all previous agreements between the
parties. No officer, employee, or representative of the Company has any authority to
make any representation or promise in connection with this Agreement or the subject
matter thereof that is not contained therein, and Executive represents and warrants he
has not executed this Agreement in reliance upon any such representation or promise.
No modification of this Agreement shall be valid unless made in writing and signed by
the parties hereto.
	 
	 	(i)	 	Waiver of Breach. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver of any
subsequent breach by the breaching party.
	 
	 	(j)	 	No Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts shall not be
reduced whether or not the Executive obtains other employment.
	 
	 	(k)	 	Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together shall constitute
one agreement.

16

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and Executive has signed this Agreement all on the day and year first above
written.

	 	 	 	 	 	 
	PATRIOT RISK MANAGEMENT, INC.	 	EXECUTIVE	 
	a Delaware corporation	 	 	 
	 
	By:
	/s/ Theodore G. Bryant	 	/s/ Steven M. Mariano	 
	 

	 
	 	 	 
	

	Name:  Theodore G. Bryant	 	 	 
	

	Title:    Senior Vice-President, Secretary	 	 	 

17

 

Exhibit A to Executive Employment Agreement

RELEASE AGREEMENT

     THIS RELEASE AGREEMENT is made and entered into this            day of                ,            by and
between Patriot Risk Management, Inc. and its subsidiaries
(collectively the “Company”) and                           
(hereinafter “Executive”).

     Executive’s employment with Company terminated on                ,           ; and Executive has
voluntarily agreed to the terms of this RELEASE AGREEMENT in exchange for severance benefits under
the Employment Agreement (“Employment Agreement”) to which Executive otherwise would not be
entitled.

     NOW THEREFORE, in consideration for severance benefits provided under the Employment
Agreement, Executive on behalf of himself and his spouse, heirs, executors, administrators,
children, and assigns does hereby fully release and discharge Company, its officers, directors,
employees, agents, subsidiaries and divisions, benefit plans and their administrators, fiduciaries
and insurers, successors, and assigns from any and all claims or demands for wages, back pay, front
pay, attorney’s fees and other sums of money, insurance, benefits, contracts, controversies,
agreements, promises, damages, costs, actions or causes of action and liabilities of any kind or
character whatsoever, whether known or unknown, from the beginning of time to the date of these
presents, relating to his employment or termination of employment from Company, including but not
limited to any claims, actions or causes of action arising under the statutory, common law or other
rules, orders or regulations of the United States or any State or political subdivision thereof
including the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act.

     The Company represents that it is not presently aware of any cause of action that it or any of
the other Company have against Executive as of the date hereof. The Company acknowledges that this
Release granted by Executive will be null and void in the event the Company subsequently brings a
cause of action against Executive.

     Executive acknowledges that Executive’s obligations under Section 9 of the Employment
Agreement shall continue to apply to Executive.

     This Release Agreement supersedes any and all other agreements between Executive and Company
except agreements relating to proprietary or confidential information belonging to Company and
indemnification by the Company. This release does not affect Executive’s right to any benefits to
which Executive may be entitled under any employee benefit plan, program or arrangement sponsored
or provided by Company, including but not limited to the Employment Agreement and the plans,
programs and arrangements referred to therein.

     Executive and Company acknowledge that it is their mutual intent that the Age Discrimination
in Employment Act waiver contained herein fully comply with the Older Workers Benefit Protection
Act. Accordingly, Executive acknowledges and agrees that:

	 	(a)	 	The Severance benefits exceed the nature and scope of that to which he would
otherwise have been legally entitled to receive.

 

 

	 	(b)	 	Execution of this Agreement and the Age Discrimination in Employment Act waiver
herein is his knowing and voluntary act;
	 
	 	(c)	 	He has been advised by Company to consult with his personal attorney regarding the
terms of this Agreement, including the aforementioned waiver;
	 
	 	(d)	 	He has had at least twenty-one (21) calendar days within which to consider this
Agreement;
	 
	 	(e)	 	He has the right to revoke this Agreement in full within seven (7) calendar days of
execution and that none of the terms and provisions of this Agreement shall become effective
or be enforceable until such revocation period has expired;
	 
	 	(f)	 	He has read and fully understands the terms of this Agreement; and
	 
	 	(g)	 	Nothing contained in this Agreement purports to release any of Executive’s rights
or claims under the Age Discrimination in Employment Act that may arise after the date of
execution.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date indicated above.

	 	 	 	 	 	 
	PATRIOT RISK MANAGEMENT, INC.	 	EXECUTIVE	 
	a Delaware corporation	 	 	 
	 
	By:

	 	
	 		 
	 

	 
	 	 	 
	

	Title: 	 
 

	 	 	 

19exv10w34

EXHIBIT 10.34

SUBORDINATED DEBENTURE

THIS SUBORDINATED DEBENTURE, dated this 16th day of August, 2005 (the “Debenture”), is entered
into by and between SUNCOAST HOLDINGS, INC., a Delaware corporation (the “Borrower”), and Westwind
Holding Company, LLC, a Florida limited liability corporation (the “Lender”).

For and in consideration of the mutual agreements as set forth herein, Lender hereby makes a loan
to Borrower in the amount set forth in Section 1 below, and Borrower hereby accepts said loan.

This Debenture is subject to the following terms and conditions:

	1.	 	Amount. The loan is in the amount of Forty Thousand dollars ($40,000.00) (the
“Loan”), is made in the form of cash, and is for a three (3) year period from the date hereof
(the “Term”). The Loan shall be subject to renewal on these same terms and conditions at the
end of the Term.
	 
	2.	 	Interest Rate. The Loan shall bear interest from the date first set forth above for
the length of the Term at the rate of three percent (3%) per annum on the unpaid principal
balance. Interest shall accrue and be payable in full at the end of the Term.
	 
	3.	 	Modification. No modification may be made with respect to this Debenture without
the prior approval of Borrower and Lender.
	 
	4.	 	Subordination. This Debenture is, and shall remain until payment in full,
subordinate to (A) that certain debt owed by Borrower to GUARANTEE HOLDINGS, INC. (“GHI”)
pursuant to that certain Stock Purchase Agreement dated as of April 28, 2003, as amended June
30, 2003 and August 21, 2003 by and between Borrower and GHI; and (B) any lines of credit in
any amounts secured from a financial institution in connection with Borrower’s business
operations.
	 
	5.	 	Entire Agreement. This Debenture contains the entire agreement between the
above-referenced parties. There are no addenda or other agreements with any party which form
a part of this Debenture.
	 
	6.	 	Governing Law. This Debenture shall be interpreted under and governed by the law of
the State of Florida, without consideration of its law on conflicts or choice of law.

This Debenture is transferable only by assignment on the books of the Borrower upon surrender of
this Debenture properly assigned.

(Signature appears on next page.)

1

 

IN WITNESS WHEREOF, this Debenture has been executed as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Westwind Holding Company, LLC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name (Print):	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title (Print):	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	SUNCOAST HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Steven M. Mariano, President	 	 

2

 

	 	 	 	 	 

Amendment to Subordinated Debt

It is so amended that Subordination which currently written:

Subordination. This Debenture is, and shall remain until payment in full, subordinate to
(A) that certain debt owed by Borrower to GUARANTEE HOLDINGS, INC. (“GHI”) pursuant to that certain
Stock Purchase Agreement dated as of April 28, 2003, as amended June 30, 2003 and August 21,
2003 by and between Borrower and GHI; and (B) any lines of credit in any amounts secured from a
financial institution in connection with Borrower’s business operations.

is hereby amended to the following language, replacing that as written above:

Subordination. This Debenture is, and shall remain until payment in full, subordinate to
(A) that certain debt owned by Borrower to Brooke Credit Corporation (“BCC”) pursuant to an
Agreement for Advancement of Load and various other loan documents dated March 31, 2006 in the
total amount of $8,652,000 and any other future advances made by BCC to Borrower; and (B) any
lines of credit in any amounts secured from a financial institution in connection with Borrower’s
business operations.

This amendment is effective March 31, 2006, and effective only if the line of credit is
finalized with by Suncoast Holdings, Inc. with Brooke Credit Corporation.

IN WITNESS WHEREOF, this Amendment has been executed as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Westwind Holding Company, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name (Print):	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title (Print):	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	Suncoast Holdings, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name (Print):	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title (Print):

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