Document:

Exhibit 10.61

 

FORM OF
 SAFETY INSURANCE GROUP, INC.
 2002 MANAGEMENT OMNIBUS INCENTIVE PLAN, AS AMENDED

 

NOTICE OF RESTRICTED STOCK GRANT
 FOR RESTRICTED STOCK WITH PERFORMANCE-BASED VESTING

 

You (the “Grantee”) have been granted the following shares of Restricted Stock of Safety Insurance Group, Inc. (the “Company”), par value $0.01 per share (“Share”), pursuant to the Safety Insurance Group, Inc. 2002 Management Omnibus Incentive Plan, as amended (the “Plan”):

 

	
Name   of Grantee:
    	
 
    	
[                      ]
    
	
 
    	
 
    	
 
    
	
Number   of Shares of Restricted Stock Granted:
    	
 
    	
[           ]*
    
	
 
    	
 
    	
 
    
	
Per   Share Value of Common Stock at Grant:
    	
 
    	
[           ]
    
	
 
    	
 
    	
 
    
	
Date   of Grant:
    	
 
    	
[           ]
    
	
 
    	
 
    	
 
    
	
Periods   of Restriction:
    	
 
    	
Subject   to the terms of the Plan and the Restricted Stock Award Agreement attached   hereto, provided you have not had a Termination of Service on or prior to   such date(s) (except under the limited circumstances set forth in Exhibit A),   and at least the minimum threshold performance is met, the Periods of   Restriction with respect to the Restricted Stock shall lapse, and the Shares   shall become free of the forfeiture and transfer restrictions contained in   the Restricted Stock Award Agreement, as follows:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
See   Exhibit A, which is attached to and made part of this document.
    

 

* Target performance will result in a payout equal to 50% of Number of Shares of Restricted Stock Granted.

 

 

By your signature and the signature of the Company’s representative below, you and the Company agree that the Restricted Stock evidenced hereby is granted under and governed by the terms and conditions of the Plan and the Restricted Stock Award Agreement, both of which are attached to and made a part of this document.

 

	
GRANTEE:
    	
SAFETY   INSURANCE GROUP, INC.:
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
						

 

 

EXHIBIT A

 

VESTING SCHEDULE FOR RESTRICTED STOCK
 INTENDED TO BE SUBJECT TO THE PERFORMANCE-BASED EXCEPTION

 

PERFORMANCE PERIOD. The “Performance Period” shall be the period commencing on [January 1, 2013], and ending on [December 31, 2015], except as otherwise specified below.

 

VESTING DATE. Except as otherwise specified below in connection with a Termination of Service, the Restricted Stock shall vest on the day the Committee certifies in writing the attainment of the performance measures described below.

 

AMOUNT OF PAYMENT. Subject to modification in connection with a Termination of Service, as specified below, the number of Shares that shall become free of the forfeiture and transfer restrictions contained in the Restricted Stock Award Agreement on the Vesting Date is determined by multiplying the Number of Shares of Restricted Stock Granted, as set forth in the Notice of Restricted Stock Grant, by the Final Payout Percentage, as defined below and determined and certified by the Committee, rounding up to the nearest whole Share (the “Shares Earned”).

 

EFFECT OF TERMINATION OF SERVICE. Except as otherwise expressly set forth below, in the event of the Grantee’s Termination of Service for any reason before the end of the Performance Period, whether voluntary or involuntary (including for Good Reason or without Cause), all unvested Restricted Stock shall be immediately forfeited without consideration.

 

(a)                                 DEATH OR DISABILITY. If, during the Performance Period, the Grantee’s Termination of Service occurs because of the Grantee’s death or Disability, the Restricted Stock shall not be forfeited on the date of Termination of Service, but the number of Shares Earned shall be equal to (i) the number of Shares determined based on a Performance Period that ends on the last day of the Company’s fiscal year during which the Termination of Service occurs multiplied by (ii) a fraction, the numerator of which is the number of months (rounded up to the next integer) from the beginning of the Performance Period until the date of Termination of Service, and the denominator of which is 36.

 

(b)                                 TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL. If, during the Performance Period, and within 24 months after a Change in Control, the Grantee’s Termination of Service is by the Company for any reason other than Cause or Disability or by the Grantee for Good Reason, any Restricted Stock that is assumed or substituted and remained outstanding after the Change in Control shall not be forfeited and shall vest as of the date of Termination of Service, but the number of Shares Earned shall be equal to 50% of the Number of Shares of Restricted Stock Granted, as set forth in the Notice of Restricted Stock Grant.

 

 

DEFINITIONS. Capitalized terms used in this Vesting Schedule are defined below or in the Notice of Restricted Stock Grant, the Restricted Stock Award Agreement, or the Plan:

 

(a)                                 “Average Price” means the average official closing price per Share over the 20-consecutive-trading days ending with and including the applicable day (or, if there is no official closing price on that day, the last trading day before that day).

 

(b)                                 “Combined Ratio” means, with respect to the Company, the sum of the loss ratio (losses and loss adjustment expenses incurred as a percent of net earned premiums) plus the expense ratio (underwriting and other expenses as a percent of net earned premiums), calculated on a GAAP basis, as reported in the Company’s filings with the Securities and Exchange Commission.

 

(c)                                  “Combined Ratio Percentage” means the percentage that corresponds to the Company’s average Combined Ratio for the Performance Period, as specified below:

 

	
Company’s Combined Ratio
    	
 
    	
Combined Ratio Percentage
    	
 
    
	
94.6% and below
    	
 
    	
100.0
    	
%
    
	
97.2%
    	
 
    	
75.0
    	
%
    
	
99.8%
    	
 
    	
50.0
    	
%
    
	
102.2%
    	
 
    	
37.5
    	
%
    
	
104.6%
    	
 
    	
25.0
    	
%
    
	
above 104.6%
    	
 
    	
0.0
    	
%
    

 

Between the levels specified above, the Combined Ratio Percentage is interpolated linearly, rounding to one decimal place. Without changing anything in the foregoing, the following is a graphical representation of the Combined Ratio Percentage:

 

(d)                                 “Final Payout Percentage” means the percentage that results from the sum of (1) the Combined Ratio Percentage times 60% plus (2) the TSR Percentage times 40%, rounded up to the next whole percentage; except that if the percentage that results from the formula is greater than 50%, but the Company’s TSR is negative, then the Final Payout Percentage shall be 50%, regardless of the result of such formula. Without changing anything in this Vesting Schedule, the following chart shows how the Final Payout Percentage is to be calculated:

 

 

(e)                                  “Performance Peer Company” means each company listed below, and each Performance Peer Company’s successor, so long as each Performance Peer Company has a class

 

 

of common securities listed for public trade on a national securities exchange or market from the beginning through the end of the Performance Period:

 

1.                                      Allstate Corporation

2.                                      Travelers Companies, Inc.

3.                                      Loews Corporation

4.                                      CNA Financial Corporation

5.                                      Chubb Corporation

6.                                      Progressive Corp.

7.                                      W.R. Berkley Corporation

8.                                      Old Republic International Corp.

9.                                      Cincinnati Financial Corp.

10.                               Erie Indemnity Company

11.                               White Mountains Insurance Group, Inc.

12.                               Hanover Insurance Group, Inc.

13.                               Markel Corp.

14.                               Horace Mann Educators Corp.

15.                               Selective Insurance Group Inc.

16.                               Tower Group Inc.

17.                               Mercury General Corporation

18.                               Navigators Group Inc.

19.                               United Fire Group, Inc.

20.                               Employers Holdings, Inc.

21.                               State Auto Financial Corp.

22.                               Meadowbrook Insurance Group Inc.

23.                               Infinity Property and Casualty Corp.

24.                               National Interstate Corporation

25.                               Donegal Group Inc.

26.                               EMC Insurance Group Inc.

27.                               Hilltop Holdings Inc.

28.                               Baldwin & Lyons Inc.

29.                               Hallmark Financial Services Inc.

 

(f)                                   “TSR” means total shareholder return, which is the percentage that results from the difference between (i) the quotient determined by dividing (A) the sum of (I) the cumulative amount of cash dividends for the Performance Period, plus (II) the Average Price at the end of the Performance Period by (B) the Average Price at the beginning of the Performance Period, which quotient is raised to the power of the result of one divided by the number of the Company’s fiscal years ending with or within the Performance Period, minus (ii) one. TSR expressed as a formula is as follows:

 

TSR = [(Cumulative Dividends + Average PriceEnd)/Average PriceBeginning](1/no. of yrs.) - 1

 

(g)                                  “TSR Percentile Ranking” means the Company’s percentile ranking relative to the Performance Peer Companies, based on TSR, calculated as follows (rounded up to the nearest whole percentile):

 

1 – [(Company Rank – 1)/(Total Number of Performance Peer Companies + the Company – 1)]

 

For example, if the Company is ranked third out of a group of 13 consisting of the 12 Performance Peer Companies plus the Company, the TSR Percentile Ranking is calculated as 1 – [(3 – 1)/(12 + 1 – 1)] or 1 – (2/12) or 1 – 0.1667 or the 83rd percentile. The Company’s rank is determined by ordering the Performance Peer Companies and the Company from highest to lowest based on TSR for the Performance Period and counting down from the entity with the highest TSR (ranked first) to the Company’s position on the list. If two entities are ranked equally, the ranking of the next entity shall account for the tie, so that if one entity is ranked first and two entities are tied for second, the next entity is ranked fourth.

 

 

(h)                                 “TSR Percentage” means the percentage that corresponds to the TSR Percentile Ranking, as specified below:

 

	
TSR Percentile Ranking
    	
 
    	
TSR Percentage
    	
 
    
	
90th and above
    	
 
    	
100.0
    	
%
    
	
70th
    	
 
    	
75.0
    	
%
    
	
50th
    	
 
    	
50.0
    	
%
    
	
40th
    	
 
    	
37.5
    	
%
    
	
30th
    	
 
    	
25.0
    	
%
    
	
below 30th
    	
 
    	
0.0
    	
%
    

 

 

FORM OF
 SAFETY INSURANCE GROUP, INC.
 RESTRICTED STOCK AWARD AGREEMENT
  FOR RESTRICTED STOCK WITH PERFORMANCE VESTING

 

SECTION 1.         GRANT OF RESTRICTED STOCK

 

(a)                                 RESTRICTED STOCK. On the terms and conditions set forth in the Notice of Restricted Stock Grant and this Restricted Stock Agreement (the “Agreement”), the Company grants to the Grantee on the Date of Grant the Restricted Stock set forth in the Notice of Restricted Stock Grant. The Restricted Stock Award is granted in respect of past services and services to be performed. It has been determined that the value of the past services performed by the Grantee equals or exceeds the par value of the Shares subject to this Agreement.

 

(b)                                 PLAN AND DEFINED TERMS. The Restricted Stock is granted pursuant to the Plan, a copy of which the Grantee acknowledges having received. All terms, provisions, and conditions applicable to the Restricted Stock set forth in the Plan and not set forth herein are hereby incorporated by reference herein. To the extent any provision hereof is inconsistent with a provision of the Plan, the provisions of the Plan will govern. All capitalized terms that are used in the Notice of Restricted Stock Grant or this Agreement and not otherwise defined therein or herein shall have the meanings ascribed to them in the Plan.

 

SECTION 2.         FORFEITURE AND TRANSFER RESTRICTIONS

 

(a)                                 FORFEITURE RESTRICTIONS.  Unless otherwise specified in the Notice of Restricted Stock Grant, Article 9 of the Plan shall govern the forfeiture to the Company of Shares of Restricted Stock upon Termination of Service.

 

(b)                                 TRANSFER RESTRICTIONS. The Restricted Stock may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of to the extent such Shares are subject to a Period of Restriction.

 

(c)                                  LAPSE OF RESTRICTIONS. The Period of Restriction shall lapse as to the Restricted Stock in accordance with the schedule set forth in the Notice of Restricted Stock Grant. Subject to the terms of the Plan and Section 4(a) hereof, upon lapse of the Period of Restriction, the Grantee shall own the Shares that are subject to this Agreement free of all restrictions otherwise imposed by this Agreement.

 

SECTION 3.                            DIVIDENDS, VOTING RIGHTS AND CUSTODY

 

The Grantee shall be entitled to vote and receive dividends on the Shares subject to this Agreement; provided, however, that no dividends shall be payable to the Grantee, and the Grantee will not be entitled to vote Shares of Restricted Stock, with respect to record dates occurring prior to the Date of Grant or with respect to record dates occurring on or after the date, if any, on which the Grantee has forfeited those Shares of Restricted Stock. Notwithstanding the foregoing, any dividends or distributions with respect to the Restricted Stock shall be credited to the Grantee’s book-entry account and shall be subject to the same restrictions as the Shares of Restricted Stock and shall otherwise be considered Restricted Stock for all purposes under this Agreement unless and until the Periods of Restriction lapse. For the avoidance of doubt, no portion of the dividends or distributions credited to the Grantee’s book-entry account shall be paid unless and until the Periods of Restriction lapse. The Shares subject to this Agreement shall be registered in the name of the Grantee and held in custody by the Company.

 

SECTION 4.         MISCELLANEOUS PROVISIONS

 

(a)                                 TAX WITHHOLDING. The Company may make such provisions as are necessary for the withholding of all applicable taxes on the Restricted Stock, in accordance with Article 16 of the Plan. With

 

 

respect to the minimum statutory tax withholding required with respect to the Restricted Stock, the Grantee may elect to satisfy such withholding requirement by having the Company withhold Shares from this Award.

 

(b)                                 RECOUPMENT POLICY. Notwithstanding anything to the contrary in this Agreement, all Restricted Stock payable (including any dividends or distributions with respect to the Restricted Stock) shall be subject to any recoupment policy adopted by the Company from time to time (including, but not limited to, any policy adopted in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law), regardless of whether the policy is adopted after the date on which the Restricted Stock are granted or the Periods of Restriction lapse.

 

(c)                                  RATIFICATION OF ACTIONS. By accepting this Agreement, the Grantee and each person claiming under or through the Grantee shall be conclusively deemed to have indicated the Grantee’s acceptance and ratification of, and consent to, any action taken under the Plan or this Agreement and Notice of Restricted Stock Grant by the Company, the Board, or the Committee.

 

(d)                                 NOTICE. Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the Grantee at the address that he or she most recently provided in writing to the Company.

 

(e)                                  CHOICE OF LAW. This Agreement and the Notice of Restricted Stock Grant shall be governed by, and construed in accordance with, the laws of New York, as such laws are applied to contracts entered into and performed in such state.

 

(f)                                   COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(g)                                  MODIFICATION OR AMENDMENT. This Agreement may only be modified or amended by written agreement executed by the parties hereto; provided, however, that the adjustments permitted pursuant to Section 4.2 of the Plan may be made without such written agreement.

 

(h)                                 SEVERABILITY. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included.Exhibit 10.10.2

 

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This Second Amendment to Employment Agreement is made this 29th day of December, 2008, by and between Standard Parking Corporation, a Delaware corporation (the “Company”), and John Ricchiuto (the “Executive”).

 

RECITALS

 

A.                                    The Executive and APCOA/Standard Parking, L.P., a Delaware Corporation, previously executed a certain Employment Agreement dated as of December 1, 2002 (the “Original Employment Agreement”). The Original Employment Agreement was modified by that certain First Amendment to the Amended and Restated Executive Employment Agreement dated as of April 1, 2005. The Amended and Restated Executive Employment Agreement, as modified by said First Amendment, being hereafter referred to collectively as the “Agreement”).

 

B.                                    The Company and Executive desire to amend the Agreement in order, among other things, to comply with Section 409A of the Internal Revenue Code of 1986 (the “Code”) and the final regulations and guidance promulgated thereunder.

 

NOW, THEREFORE, in consideration of the Recitals, the mutual promises and undertakings herein set forth, the receipt and sufficiency of which consideration are hereby acknowledged, the parties hereby agree that the Agreement shall be deemed modified and amended, effective immediately, as follows:

 

1.                                    Section 3(b) of the Agreement shall be amended to read as follows:

 

“ (b) Bonus. For each calendar year ending during the Employment Period, the Executive shall be eligible to receive an annual bonus (the “Annual Bonus”) based upon terms and conditions of an annual bonus program established for peer executives of the Company (the “Animal Bonus Program”). The Annual Bonus will be paid in the calendar year immediately following the year for which it is earned, no later than March 15 of such year. In all events, the Executive’s target Annual Bonus (the “Target Annual Bonus”) will be a percentage of the Annual Base Salary, with the actual amount of the Annual Bonus determined in accordance with the terms of the Annual Bonus program ......”

 

2.                                    Section 5(c) of this Agreement shall be amended to add the following sentence to the end thereof;

 

“ The Annual Base Salary and bonus payments to be made hereunder shall be made as and When such amounts would be paid in accordance with paragraphs 3(a) and (b) above.

 

3.                                    A new Section 16 shall be added to the Agreement to read as follows:

 

 

“ 16. Compliance with Section 409A. Payments under Sections 5 and 6 shall be paid or provided only at the time of a termination of the Executive’s employment that constitutes a “separation from service” within the meaning of Section 409A of the Code. Further, if the Executive is a “specified employee” as such term is defined under Section 409A of the Code, any payments described in Section 5 or Section 6 shall be delayed for a period of six (6) months following the Executive’s separation from service to the extent and up to an amount necessary to ensure such payments are not subject to the penalties and interest under Section 409A of the Code, and shall thereafter be paid for the duration set forth in Section 5 or Section 6.”

 

4.                                    Except as expressly modified above, all of the remaining terms and provisions of the Agreement are hereby ratified and confirmed in all respects, and shall remain in full force and effect in accordance with their terms.

 

IN WITNESS “WHEREOF, the Company and Executive have executed this Fifth Amendment to Employment Agreement as of the day and year first above written.

 

	
COMPANY;
    	
 
    	
EXECUTIVE:
    
	
 
    	
 
    	
 
    
	
STANDARD PARKING CORPORATION,
    	
 
    	
 
    
	
a Delaware corporation
    	
 
    	
/s/ John Ricchiuto
    
	
 
    	
 
    	
 
    	
 
    	
John Ricchiuto
    
	
 
    	
By:
    	
/s/ James A. Wilhelm
    	
 
    	
 
    
	
 
    	
James A. Wilhelm
    	
 
    	
 
    
	
 
    	
President and Chief Executive Officer
    	
 
    	
 
    

 

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