Document:

ex10-1.htm

 

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made by and between Republic Bank (the “Bank”), a wholly owned subsidiary of Republic First Bancorp, Inc. (the “Company”), and __________________ (“Employee”).

WITNESSETH:

WHEREAS, the Bank seeks to employ the Employee and Employee is willing to be employed by the Bank on the terms herein stated.

NOW, THEREFORE, in consideration of their mutual promises set forth below and intending to be legally bound hereby, the parties agree as follows:

1.      Employment.  The Bank hereby employs the Employee as __________________________ of the Bank.  Employee agrees and accepts such position, subject to the general supervision, advice and direction of the Chief Executive Officer, or his designee, of the Bank and further subject to the terms and conditions of this Agreement.

 

2.      Employment Date.  This Agreement shall be effective as of ___________ (“Effective Date”) and continue until terminated as provided for in Paragraph 5 below.

 

3.      Duties.  Employee shall perform such duties customarily performed by an employee in a similar position, and such additional duties as may be assigned from time to time by the Chief Executive Officer, or his designee, of the Bank.  Employee agrees to devote his full business time and to perform faithfully and efficiently the responsibilities assigned to him hereunder except Employee may represent the Bank and actively participate in social, professional associations, seminars, civic, charitable and trade organizations to the extent that such participation is deemed beneficial to the Bank or to the extent such participation does not conflict with Employee’s obligations to the Bank or interfere with Employee’s responsibilities under this Agreement.  Employee will not engage in any outside business activity, including, but not limited to, any activity as a consultant, agent, partner or officer or provide services of any nature directly or indirectly to a corporation or other business enterprise without the prior written consent of the Bank.

 

4.      Compensation.

(a)           Regular Compensation.  For all services rendered by the Employee under this Agreement, the Bank shall pay the Employee in accordance with the normal payment practices of the Bank an annual base salary of _______________ (the “Base Salary”).  The Base Salary may be increased, but not decreased, at the sole discretion of the Compensation Committee of the Board of Directors (the “Compensation Committee”), which determination shall be made taking into account objective financial criteria as determined by the Compensation Committee.

(b)           Stock and Other Compensation Plans.  The Employee shall be eligible to participate in any stock purchase, stock grant, stock option, retirement, savings, or other compensation plans presently or hereafter maintained by the Company or the Bank for its senior executives.  Except as set forth in this subsection, eligibility in no way guarantees the Employee’s receipt of any stock grant, stock option or other compensation pursuant to such plans.  Employee participation in such plans shall be in the sole discretion of the Compensation Committee, based on criteria established for this purpose from year to year.  All options granted to the Employee shall be at a purchase price per share equal to the fair market value of a share as of the date of grant, which options shall be vested in accordance with Company policies, but subject in all regards to the availability of shares under the terms of the 2014 Equity Incentive Plan (“Stock Plan”) and to such terms and conditions as are applicable under the Stock Plan.  In addition, and in light of the Employee’s having attained what the Compensation Committee believes to be a reasonable retirement age, all equity-based awards currently held by the Employee shall be fully vested in accordance with the Company’s policies.

(c)           Annual Bonuses.  The Employee shall also be able to earn an annual bonus based on criteria established for that purpose from year to year by the Compensation Committee, which criteria may, by way of illustration only, include, for the Company, net income, stock price, new programs, etc. or, as to the Bank, net income, core deposits, loan growth, income from loan programs, and such other criteria as shall be set by the Compensation Committee.

(d)           Payment of Bonuses.  All bonuses provided for under Section 4(c) shall be in accordance with the Bank’s policies and practices.

(e)           Health, Disability and Retirement.  The Bank shall maintain such medical and disability insurance coverage and such retirement plan or plans for the Employee and his  dependents as it maintains for other senior the Employees.  The Employee shall be entitled to 30 days paid time off.

(f)            Travel Expenses.  During the term of this Agreement, the Employee shall be reimbursed for normal and reasonable travel expenses incurred on behalf of the Bank.

(g)           Entertainment Expenses.  The Employee will be reimbursed for all reasonable expenses incurred by the Employee in fulfillment of his duties on behalf of the Bank.

(h)           Other Benefits.  Employee will be entitled to a parking space provided by the Bank in the garage at Two Liberty Place.

(i)            Approvals.  All expenses incurred by the Employee under subparagraphs (f) and (g) hereof shall be approved by the Chief Financial Officer of the Company or his designee provided appropriate documentation of such expenses, consistent with the Company’s reimbursement policies, has been provided in connection with any request for reimbursement.

 

 

 

 

  

  

  

 

 

5.          Term; Termination.

(a)           Unless earlier terminated in accordance with the provisions of this Section 5, the Employee’s employment under this Agreement shall be for a one-year period commencing on the date first set forth above; provided, however, in the event neither party shall have given written notice that they desire to terminate the Agreement at least six (6) months prior to the termination date, the Agreement shall automatically continue annually thereafter.  In the event the Company provides notice of its desire not to renew the Agreement pursuant to this Section 5(a), the termination of the Employee’s employment shall be treated as a termination of employment by the Bank without Good Reason.

(b)           The Employee may terminate this Agreement upon six (6) months written notice to the Bank.

(c)           This Agreement shall automatically terminate upon the death of the Employee without any additional payments of salary or other benefits to the Employee except as may be required by law and as set forth in this Agreement.

(d)           This Agreement shall automatically terminate upon the Employee’s Disability, as hereinafter defined.

(e)           The Bank may terminate the Employee immediately for “Cause” as hereinafter defined.

(f)            Employee may terminate this Agreement for Good Reason, as hereinafter defined.

 

(g)           Definitions.  For purposes of this Agreement, the following definitions apply:

(1)           “Cause” means (a) a material failure or refusal to follow reasonable and lawful directives of the Board, the Chief Executive Officer, or his designee, or Employee’s immediate supervisor; (b) behavior that has a material adverse impact on the Company or the Bank; (c) the material breach of any fiduciary duty owed to, or any agreement with or written policy of, the Company or the Bank; (d) the commission of any act of gross negligence or willful misconduct in the course of employment; (e) indictment or conviction or plea of guilty or nolo contendere of a crime involving moral turpitude or dishonesty; (f) alcohol or controlled substance abuse; or (g) any requirement, request or recommendation of a regulator to the Bank to terminate the Employee or reduce the Employee’s duties, if such requirement, request or recommendation arises in connection with actions or conduct of Employee or an individual supervised by Employee.

(2)           “Change of Control” means the occurrence of any of the following in one transaction or a series of related transactions: (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming a “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the Company’s then outstanding securities; (b) a consolidation, share exchange, reorganization or merger of the Company resulting in the stockholders of the Company immediately prior to such event not owning at least a majority of the voting power of the resulting entity’s securities outstanding immediately following such event; or (c) the sale or other disposition of all or substantially all the assets of the Company, other than in connection with a bankruptcy proceeding.  The foregoing notwithstanding, a transaction (or a series of related transactions) will not constitute a Change in Control if such transaction results in the Company, any successor to the Company, or any successor to the Company’s business, being controlled, directly or indirectly, by the same person(s) who controlled the Company, directly or indirectly, immediately before such transaction(s).

(3)           “Competing Business” means any business or activity engaged in by any federally or state chartered bank, savings bank, savings and loan association, trust company and/or credit union, including, without limitation, the taking and accepting of deposits, the provision of trust services, the making of loans and/or the extension of credit, brokering loans, the provision of insurance and investment services and the sale of similar financial products.

(4)           “Confidential Information” means any and all information regarding the organization, business or finances of the Bank or any of its affiliates, including, but not limited to, any and all business plans and strategies, financial information, marketing plans and information, cost information, customer information, personnel data, pricing information, concepts and ideas, information respecting existing and proposed investments and acquisitions, and information regarding customers and suppliers.  The term “Confidential Information” does not include information that is publicly available.

(5)           “Disability” means a condition entitling Employee to benefits under the Bank’s long term disability plan, policy or arrangement.  For avoidance of doubt, a termination of Employee’s employment due to a Disability will not be deemed a termination by the Bank “without Cause.”

(6)            “Good Reason” means any of the following: (a) a material, adverse change in Employee’s title, authority or duties (including the assignment of duties materially inconsistent with Employee’s position); (b) relocation of Employee’s principal worksite outside of the Philadelphia Metropolitan Statistical Area; or (c) a material breach by the Bank of this Agreement.  However, none of the foregoing events or conditions will constitute Good Reason unless: (x) Employee provides the Bank with written objection to the event or condition within 30 days following the occurrence thereof, (y) the Bank does not reverse or otherwise cure the event or condition within 30 days of receiving that written objection, and (z) Employee resigns his employment within 30 days following the expiration of that cure period.

 

 

 

 

  

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6.          Termination.  In the event of the termination of the Employee’s employment, excluding a Change of Control, or failure of the Bank to continue the Employee’s employment at the termination of this Agreement or any subsequent employment agreement (a “Termination Event”), but excluding the Employee’s death, Disability, resignation by the Employee without Good Reason or termination of the Employee for Cause, as consideration for the Employee’s services to the Bank prior to the Employee’s termination, the Bank shall pay to the Employee a sum equal to two times the amount of the Employee’s annual Base Salary in effect immediately prior to his termination.  The total compensation set forth in this Section 6 shall hereinafter be referred to as “Severance Payment”.  In the event Employee’s employment is terminated upon a Change of Control or in contemplation of a Change of Control, unless Employee is offered a comparable position, in the Philadelphia metropolitan area, for a period of at least twenty-four months after the Change of Control in the surviving company with compensation substantially similar to or greater than Employee’s compensation with the Bank immediately prior to the Change of Control, Employee shall be entitled to Severance Payment by the Bank.  Severance Payment shall be paid within thirty (30) days of occurrence of the Termination Event or Change of Control.

 

7.      Return of Corporate Property.  Upon any cessation of his employment with the Bank, Employee shall deliver all property (including keys, records, notes, data, memoranda and equipment) that is in Employee’s possession or under Employee’s control, which is the Bank’s property or related to the Bank’s business.

 

8.      Confidentiality.  Employee acknowledges and agrees that his employment by the Bank will afford him an opportunity to acquire Confidential Information.  Employee will not use Confidential Information for the benefit of anyone other than the Bank and its affiliates or disclose any Confidential Information for any purpose whatsoever except as directed or authorized by the Bank.  Employee will not remove any materials containing Confidential Information from the premises of the Bank or its affiliates, in either original or duplicate form, except as necessary for the performance of services hereunder.  Upon any cessation of his employment, Employee will immediately surrender to the Bank all materials in his possession, custody or control that contain Confidential Information.

 

9.      Non-Solicitation.  Employee agrees that during his  employment and for a period of 12 months following any cessation of that employment (regardless of the reason for that cessation and whether that cessation was initiated by Employee or the Bank), Employee will not, directly or indirectly, without the written consent of the Bank:

(a)           solicit any current or prospective customer on behalf of any Competing Business or direct any current or prospective customer to another person for goods or services that the Company, the Bank or their affiliates provide;

(b)           encourage any person (including, without limitation, any customer, supplier, consultant, partner, vendor or agent) to modify or terminate any agreement, relationship or course of dealing with the Company, the Bank or their affiliates; or

(c)           employ or retain (or facilitate the employment or retention by another person) of any person who has performed personal services for the Company, the Bank or their affiliates.

 

10.      Non-Competition.  Employee agrees that during his employment and for a period of 12 months following any cessation of that employment (regardless of the reason for that cessation and whether that cessation was initiated by Employee or the Bank, but excluding termination due to a Change of Control as hereinbefore defined), Employee shall not, directly or indirectly, engage or participate in any Competing Business anywhere in the Philadelphia Metropolitan Statistical Area or become interested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent or consultant) any person or entity engaged in a Competing Business, unless such engagement or participation is expressly authorized in writing by the Bank; provided, that the foregoing shall not prevent the Employee’s passive ownership of two-percent (2%) or less of the equity securities of any publicly traded company.

 

 

 

 

  

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11.      Enforcement.

(a)           Specific Enforcement. Employee acknowledges that any breach, willfully or otherwise, of Sections 7, 8 or 9 of this Agreement (the “Restrictive Covenants”) will cause continuing and irreparable injury to the Bank for which monetary damages would not be an adequate remedy.  Employee will not, in any action or proceeding to enforce any of the provisions of this Agreement, assert the claim or defense that such an adequate remedy at law exists.  In the event of any breach by Employee of the Restrictive Covenants, the Bank will be entitled to injunctive or other similar equitable relief in any court, without any requirement that a bond or other security be posted, and this Agreement will not in any way limit remedies of law or in equity otherwise available to the Bank.

(b)           Judicial Modification.  If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or scope of such provision, such court will have the power to modify such provision and, in its modified form, such provision will then be enforceable.

(c)           Accounting.  If Employee breaches any of the Restrictive Covenants, the Bank will have the right and remedy to require Employee to account for and pay over to the Bank all compensation, profits, monies, accruals, increments or other benefits derived or received by Employee as the result of such breach.  This right and remedy will be in addition to, and not in lieu of, any other rights and remedies available to the Bank under law or in equity.

(d)           Enforceability.  If any court holds the Restrictive Covenants unenforceable by reason of their breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Bank to the relief provided above in the courts of any other jurisdiction within the geographic scope of the Restrictive Covenants.

(e)           Disclosure of Restrictive Covenants.  Employee agrees to disclose the existence and terms of the Restrictive Covenants to any person for whom Employee performs services while the Restricted Covenants remain applicable.

(f)           Acknowledgements.  Employee acknowledges that the Restrictive Covenants are reasonable and necessary to protect the legitimate interests of the Bank and its affiliates, that the duration and scope of the Restrictive Covenants are reasonable given the nature of this Agreement and the position Employee will hold within the Bank, and that the Bank would not enter into this Agreement or otherwise employ Employee unless Employee agrees to be bound by the Restrictive Covenants.

 

12.      Section 409A.

(a)           Payment Timing.  If a cessation of employment giving rise to payments described in Section 6 of this Agreement is not a “Separation from Service” within the meaning of Treas. Reg. § 1.409A-1(h)(1) (or any successor provision), then the amounts otherwise payable pursuant to those sections will instead be deferred without interest and will not be paid until the Employee experiences a Separation from Service.  In addition, to the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Code to payments due to the Employee upon or following his Separation from Service, then notwithstanding any other provision of this Agreement (or any otherwise applicable plan, policy, agreement or arrangement), any such payments that are otherwise due within six months following the Employee’s Separation from Service (taking into account the preceding sentence) will be deferred without interest and paid to the Employee in a lump sum immediately following that six month period.  This paragraph should not be construed to prevent the application of Treas. Reg. § 1.409A-1(b)(9)(iii)(or any successor provision) to any amount payable to Employee.  For purposes of the application of Treas. Reg. § 1.409A-1(b)(4)(or any successor provision), each payment in a series of payments will be deemed a separate payment.

(b)           Reimbursements and In-Kind Payments.  Notwithstanding any other policy, practice or agreement of the Bank, to the extent any expense, reimbursement or in-kind benefit provided to Employee constitutes a “deferral of compensation” within the meaning of Section 409A (i) the amount of expenses eligible for reimbursement or in-kind benefits provided to Employee during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Employee in any other calendar year, (ii) the reimbursements for expenses for which Employee is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred, and (iii) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

 

13.      Notices.  All notices required or permitted by this Agreement shall be in writing and shall be deemed delivered when delivered in person or received by US Mail at the following addresses:

Bank – Republic First Bank

Two Liberty Place

50 S. 16th Street, Suite 2400

Philadelphia PA 19102

Attn: President; Chief Executive Officer

Employee –

 

 

 

 

  

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14.      Entire Agreement; Amendments.  This Agreement contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter.  This Agreement may not be changed or modified, except by an agreement in writing signed by each of the parties hereto.

 

15.      Waiver.  The failure of either party to enforce any provision of this Agreement shall be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this Agreement.

 

16.      Other Agreements.  Employee represents and warrants to the Bank that there are no restrictions, agreements or understandings whatsoever to which he is a party that would prevent or make unlawful his execution of this Agreement, that would be inconsistent or in conflict with this Agreement or Employee’s obligations hereunder, or that would otherwise prevent, limit or impair the performance by Employee of his duties under this Agreement.

 

17.      Successors and Assigns.  The Bank may assign this Agreement to any successor to substantially all its assets.  For avoidance of doubt, such an assignment will not be deemed a termination of Employee’s employment hereunder for purposes of Section 5(f).  The duties of Employee hereunder are personal to Employee and may not be assigned.

 

18.      Applicable Law.  This Agreement is to be construed pursuant to the laws of the Commonwealth of Pennsylvania, without regard to the principles of conflicts of laws.  Each of the parties irrevocably agree that any action or proceeding arising out of or in any way related to this Agreement or any relationship of the parties hereto shall be brought only in Philadelphia County, Commonwealth of Pennsylvania.  All parties to this Agreement waive any objection they may have or hereafter have to the venue of any such action or proceeding in such court or that such action was brought in an inconvenient court and agrees not to plead or claim the same.

 

19.      Withholding.  All payments due to Employee from the Bank or its affiliates will be subject to withholding for all taxes, FICA or other amounts required to be withheld pursuant to any applicable law.

 

20.      Legal Representation.  Each of the Bank and Employee have had the opportunity to be separately represented by counsel in connection with this Agreement and neither party have relied upon counsel for the other party in connection with any advice pertaining hereto.

 

IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed by its duly authorized officer, and Employee has executed this Agreement, in each case on ____________, 2015.

 

	  	
BANK:

	  
	 	 	 
	  	
By:

	
__________________________

	 	 	 
	  	
Title:

	
__________________________

	  	  	  
	 	 	 
	  	
EMPLOYEE:

	  
	 	 	 
	 	
                                                                                     

 

 

 

 -5-Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this “Agreement”) is dated and effective as of July 8, 2015 (the “Effective Date”) between Aon Corporation, a Delaware corporation (the “Company”) and Stephen P. McGill (the “Executive”).

 

WHEREAS, the Company desires to continue to employ the Executive, and the Executive desires to continue to serve and to be employed by the Company, upon the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereby agree as follows:

 

1.  Extended Employment Term; Title; Responsibilities; Outside Activities.

 

(a)           Extended Employment Term; Title.  The Company will continue to employ the Executive as Chairman and Chief Executive Officer, Risk Solutions, and Group President of Aon plc, a public limited company incorporated under English law (the “Parent”), which positions are currently directly below that of the Parent’s Chief Executive Officer (“CEO”); provided, however, that it will not be a breach of this Agreement if the Executive’s title is changed by the Company so long as the new title is a Level 1A senior executive role for the Company (or a comparable level if levels are changed).  The Company will continue to employ the Executive pursuant to this Agreement for an extended term (the “Term of Employment”) ending on December 1, 2020, unless renewed pursuant to Section 3 hereof, or terminated during the Term of Employment as fully set forth in Section 3.

 

(b)           Responsibilities.  The Executive will report to the CEO.  The Executive will have the authority and responsibility consistent with the positions in which he will serve.  The Executive will also perform other duties on behalf of the Company and its subsidiaries as may from time to time be authorized or directed by the CEO.

 

(c)           Outside Activities.  The Executive may engage in charitable, civic or community activities and, with the prior approval of the General Counsel of Aon plc (the “GC”), may serve as a director of any other business corporation, provided that (i) such activities or service do not interfere with the Executive’s duties hereunder or violate the terms of any of the covenants contained in Sections 4 or 6 hereof, (ii) such activities are consistent with the Aon Code of Business Conduct and reviewed and approved by the GC, and (iii) such other business corporation provides the Executive with director and officer insurance coverage which, in the opinion of the Company, is adequate under the circumstances.

 

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2.  Compensation during Term of Employment.

 

(a)           Base Salary.  During the Term of Employment, the Company will continue to pay to the Executive a base salary at the rate of $1,100,000 per year (“Base Salary”), payable semi-monthly in accordance with the Company’s executive payroll policy.  Such Base Salary will be reviewed annually on the Company’s regular executive salary review schedule, and will be subject to increase (but not decrease) at the discretion of the CEO and the Organization and Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”), which increased amount will be thereafter the Executive’s “Base Salary” for all purposes hereunder.

 

(b)       Annual Incentive Compensation.  The Executive will be eligible to participate in the annual incentive compensation program for the Company’s senior executives in accordance with the provisions of such program, as amended from time to time.  The Executive’s target bonus will continue to be 175% of the Executive’s Base Salary in effect at the end of such year, and the maximum bonus will be three times target (unless a lesser maximum is established pursuant to the Company’s incentive compensation program).  The Executive acknowledges and agrees that the annual incentive compensation awards earned hereunder will be subject to payment pursuant to and in accordance with the Aon Incentive Stock Program, payable in a combination of cash and an Aon equity-based award, if applicable.

 

(c)         Long-Term Incentive Compensation.  Throughout the Term of Employment the Executive will be eligible to participate in the long-term incentive compensation programs for the Company’s senior executives in accordance with the provisions of such programs, as amended from time to time.

 

In addition, without limiting the foregoing, the Company will, subject to the approval of the Compensation Committee, provide the Executive with an additional award under its Leadership Performance Program, a sub-plan of the Amended and Restated Aon plc 2011 Incentive Plan (the “Stock Plan”), or any successor plan, for the performance period beginning January 1, 2016 and ending December 31, 2018, and the grant date value of such award will be $6,000,000. Such award is intended to be granted no later than April 1, 2016.  It is intended that such award value will reflect the Executive’s performance to date and his commitment to the extended Term of Employment set forth herein.  The $6 million value will be in addition to the value to be otherwise granted pursuant to the Company’s regular annual long-term incentive award process, and will be earned based on the same performance criteria and weightings as the regular award, which will also be the same for other corporate participants for the performance period.

 

(d)        Employee Benefits.  During the course of employment, the Executive will be entitled to participate in the Company’s employee benefit plans generally available to senior executives of the Company.  Nothing in this Agreement will require the Company to establish, maintain or continue any of the benefits already in existence or hereafter adopted for executives 

 

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of the Company and nothing in this Agreement will restrict the right of the Company to amend, modify or terminate such programs.

 

(e)         Vacation Time.  The Executive will be entitled to paid vacation time in accordance with usual Company policies and procedures. The Company will not pay the Executive any additional compensation for any vacation time not used by the Executive except as required by law.

 

(f)         Expense Reimbursement.  In accordance with Company policies and procedures and on prescribed Company forms, the Company will reimburse the Executive for all proper expenses incurred by the Executive in the performance of his duties hereunder.

 

(g)         International Assignment.  As of and prior to the Effective Date, the Executive is serving an international assignment to the Parent at its London, England headquarters pursuant to the Company’s letter to the Executive dated January 12, 2012 and amended effective July 1, 2014 (the “International Assignment Letter”).  Pursuant to the International Assignment Letter, the Executive is entitled to additional compensation and protections related to his temporary relocation.  The parties do not intend for this Agreement to supersede or modify in any way the International Assignment Letter.

 

3.          Renewal; Termination.

 

(a)        Renewal.  This Agreement may be renewed upon (i) the issuance by the Company of a notice of renewal (“Notice of Renewal”) to the Executive at least six (6) months prior to the end date of the Term of Employment or any renewal period thereof and (ii) the written acceptance of the Notice of Renewal by the Executive within (60) days thereafter.

 

(b)        Termination.

 

(i)  Death or Disability.  This Agreement will be terminated immediately upon the death or total disability of the Executive (as defined under the Aon Long Term Disability Plan or its successor plan) or in the event that the Executive becomes otherwise disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of the Executive’s duties and responsibilities for one hundred eighty (180) consecutive calendar days.

 

(ii)       Without Cause or for Good Reason.  This Agreement may be terminated by the Company without cause on no less than three hundred sixty-five (365) days advance notice by the Company or by the Executive without cause on no less than forty-five (45) days, but no more than 365 days, advance notice to the Company or by the Executive for Good Reason.  The notice from either party will specify the effective date of the Executive’s employment termination (the 

 

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“Termination Date”).  If terminated without cause by the Company or for Good Reason by the Executive, the Company will pay a lump sum cash payment to the Executive equal to all accrued but unpaid Base Salary and benefits as of the date such notice of termination is delivered (the “Notice Date”).  In addition, if this Agreement is terminated without cause by the Company or for Good Reason by the Executive, so long as the Executive continues to abide by the provisions of Sections 4(b), 4(c) and 6 herein and further provided that the Executive signs and returns an agreement containing a release of claims in a form typically used by or otherwise acceptable to the Company within the period of time set forth therein (without revoking it, if applicable), the Company will continue to pay to the Executive an amount equal to the Base Salary as and when it would be paid to its executives generally through the Termination Date. On the Termination Date, the Company will provide the Executive with a lump sum cash payment equal to the Executive’s annual Base Salary as of the Notice Date.

 

As used herein, “Good Reason” will mean any of the following which remains uncured by the Company for twenty (20) days after the Notice Date: (a) a substantial adverse alteration in the then-current responsibilities of the Executive; (b) any material breach of this Agreement by the Company, including any purported termination of the Executive’s employment which breaches this Agreement; or (c) the failure of the Company to obtain from any successor an express written and unconditional assumption of the Company’s obligations under this Agreement.

 

Notwithstanding anything to the contrary in this Section 3(b)(ii), the Company may require the Executive to leave Company premises immediately on the Notice Date. Such a requirement will not relieve the Company of its obligations herein, including its obligation to continue Base Salary and benefits through the Termination Date.

 

In the event the Executive terminates this Agreement without cause or Good Reason, the Company will only be required to pay or provide to the Executive all accrued but unpaid Base Salary and benefits as of the date of such termination; provided, however, that in such event the Executive will not be waiving his rights or entitlements pursuant to any employee benefit plan or program or equity plan or agreement.

 

(iii)        For Cause.  The Company may at any time during the initial Term of Employment and during any renewals thereof, terminate this Agreement for “cause”, effective immediately by written notice of termination given to the Executive setting forth the basis for such termination.  For the purposes of this Agreement, “cause” will mean the Executive’s: (A) performing a deliberate act of dishonesty, fraud, theft, embezzlement, or misappropriation involving the

 

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Executive’s employment with the Company, or breach of the duty of loyalty to the Company; (B) performing an act of race, sex, national origin, religion, disability, or age-based discrimination, or sexual harassment, which after investigation, the Company reasonably concludes will result in material exposure to the Company’s business reputation or counsel to the Company reasonably concludes will result in material liability being imposed on the Company and/or the Executive; (C) material violation of the Company’s written policies and procedures including, but not limited to, the Aon Code of Business Conduct; (D) material non-compliance with the terms of this Agreement, including but not limited to Sections 4 and 6, which is not cured within twenty (20) days after written notice (with specificity as to the noncompliance) is given to the Executive; or (E) admission or conviction of, or a plea of nolo contendere, to a felony or any crime involving moral turpitude or misrepresentation.

 

In the event of a termination for “cause,” the Company will only be required to pay or provide to the Executive all accrued but unpaid Base Salary and benefits as of the date of such termination; provided, however, that in such event the Executive will not be waiving his rights or entitlements pursuant to any employee benefit plan or program or equity plan or agreement.

 

(iv) As of the effective date of termination, the Executive agrees that the Secretary of the Company may, as an irrevocable proxy and in the Executive’s name and stead, execute all documents and things which the Company deems necessary and desirable to effect the Executive’s resignation as an officer or director of the Company, the Parent and their subsidiaries and affiliates.

 

(v)  Upon the effective date of termination, or other expiration of this Agreement, the obligations of the parties under this Agreement, other than the Executive’s obligations under Sections 3(c), 4, 5, 6, and 8(e) and the Company’s obligations under Sections 2(b) and 3(b), will cease; provided further that any other provision which contemplates performance or observance by either or both parties subsequent to any termination of this Agreement will survive any termination of this Agreement and continue in full force and effect.

 

(vi) Any agreement herein by the Company to continue to pay Base Salary or any other benefits after the termination of employment will be reduced by any benefits provided by the Aon Severance Plan.

 

(vii)  For purposes of this Agreement, the terms “retirement,” “termination of employment,” “terminated,” “termination,” “this Agreement will be terminated” and variations thereof, as used in this Agreement, are intended to mean a termination of employment that constitutes a “separation from service” under 

 

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Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”).

 

(c)         The Executive agrees that, prior to the commencement of any new employment in the insurance brokerage, reinsurance brokerage or human capital consulting business, the Executive will furnish the prospective new employer with a copy of this Agreement.  The Executive also agrees that the Company may advise any prospective new employer of the Executive of the existence and terms of this Agreement and furnish the prospective new employer with a copy of this Agreement.

 

4.    Noncompetition; Nonsolicitation.

 

(a)            General.  The Executive acknowledges that in the course of his employment with the Company, and any predecessor company or affiliated company, the Executive has and will become familiar with trade secrets and other confidential information concerning the Company, the Parent and their subsidiaries and that the Executive’s services will be of special, unique and extraordinary value to the Company and its affiliates.

 

(b)              Noncompetition.  The Executive agrees that during the Term of Employment and for a period of twelve months beginning on effective date of the Executive’s termination of employment (the “Noncompetition Period”) the Executive will not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership or as an officer, director, stockholder, investor or employee of or consultant to any other corporation or enterprise or otherwise, engage or be engaged, or assist any other person, firm, corporation or enterprise in engaging or being engaged, in any business in which the Executive was involved or had knowledge, being conducted by, or contemplated by, the Company, the Parent or any of their subsidiaries as of the termination of the Executive’s employment in any geographic area in which the Company, the Parent or any of their subsidiaries is then conducting such business.

 

(c)           Nonsolicitation.  The Executive further agrees that during the Noncompetition Period the Executive will not in any manner, directly or indirectly, induce or attempt to induce any employee of the Company, the Parent or any of their subsidiaries to terminate or abandon his employment with the Company for any purpose whatsoever.

 

(d)              Exceptions.   Nothing in this Section 4 will prohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investment company or (ii) a passive owner of not more than two percent of the outstanding stock of any class of a corporation, any securities of which are publicly traded, so long as the Executive has no active participation in the business of such corporation.

 

(e)              Reformation.  If, at any time of enforcement of this Section 4, a court holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties

 

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hereto agree that the maximum period, scope or geographical area reasonable under such circumstances will be substituted for the stated period, scope or area and that the court will be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law.  This Agreement will not authorize a court to increase or broaden any of the restrictions in this Section 4.

 

(f)                                           Consideration; Breach.  The Company and the Executive agree that the payments to be made, and the benefits to be provided, by the Company to the Executive pursuant to Section 3 hereof will be made and provided in consideration of the Executive’s agreements contained in Section 4 hereof.  In the event that the Company determines that the Executive has committed a material breach of any provision of Section 4 hereof, on written notice to the Executive setting forth the basis for such determination, the Company will be entitled immediately to terminate making all remaining payments and providing all remaining benefits pursuant to Section 3 hereof and upon such termination the Company will have no further liability to the Executive under this Agreement; provided, however, that if a court of law determines that no such material breach occurred, the Company will be obligated to make such payments in a timely manner.

 

5.  Company’s Right to Injunctive Relief.

 

The Executive acknowledges that the Executive’s services to the Company are of a unique character which gives them a special value to the Company, the loss of which cannot reasonably or adequately be compensated in damages in an action at law, and that a breach of Section 4 and 6 of this Agreement will result in irreparable and continuing harm to the Company and that therefore, in addition to any other remedy which the Company may have at law or in equity, the Company will be entitled to injunctive relief for a breach of this Agreement by the Executive.

 

6.  Trade Secrets and Confidential Information; Inventions.

 

(a)                         Trade Secrets and Confidential Information.  The Executive acknowledges that the Company’s business depends to a significant degree upon the possession of information which is not generally known to others, and that the profitability of the business of the Company requires that this information remain proprietary to the Company.

 

The Executive will not, except as required in the course of employment by the Company, disclose or use during or subsequent to the course of employment, any trade secrets or confidential or proprietary information relating to the business of the Company or Parent of which the Executive becomes aware by reason of being employed by the Company or to which the Executive gains access during his employment by the Company and which has not been publicly disclosed (other than by the Executive in breach of this provision).  Such information includes client and customer lists, data, records, computer programs, manuals, processes, methods and intangible rights which are either developed by the Executive during the course of 

 

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employment or to which the Executive has access.  All records and equipment and other materials relating in any way to any confidential information relating to clients or to the business of the Company or Aon Group will be and remain the sole property of the Company during and after the end of employment.  Notwithstanding the foregoing, the Executive may comply with legal process or governmental inquiry after, to the extent legally permitted, giving the Company written notice of record thereof.

 

Upon termination of employment, the Executive will promptly return to the Company all materials and all copies or tangible embodiments of materials involving any confidential information in the Executive’s possession or control.

 

(b)                         Inventions.  The Executive hereby assigns to the Company his entire right, title and interest in and to all discoveries and improvements, patentable or otherwise, trade secrets and ideas writings and copyrightable material, which may be conceived by the Executive or developed or acquired by the Executive during the Term of Employment, which may pertain directly or indirectly to the business of the Company or any of its affiliates, parent companies, or subsidiaries. The Executive agrees to disclose fully all such developments to the Company upon its request, which disclosure will be made in writing promptly following any such request. The Executive will upon the Company’s request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or desirable to enable the Company or any of its affiliates, parent companies, or subsidiaries to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks, and copyrights in all countries.

 

7.                              Mergers and Consolidations; Assignability.

 

The rights and obligations under this Agreement will inure to the benefit of and be binding upon the Company and its successors and assigns so long as any assignee, successor or transferee of the Company has provided an express written and unconditional assumption of the Company’s obligations under this Agreement.  This Agreement will not be assignable by the Executive, but in the event of the Executive’s death it will be binding upon and inure to the benefit of the Executive’s legal representatives to the extent required to effectuate its terms.

 

8.  Miscellaneous.

 

(a)                         Integration; Amendment; Counterparts.  Except as is otherwise provided herein, this Agreement contains all of the terms and conditions agreed upon by the parties relating to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements, negotiations, correspondence, undertakings and communications of the parties, whether oral or written, respecting the subject matter of this Agreement (with the sole exception of the International Assignment Letter described in Section 2(g) herein).

 

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This Agreement may not be amended, altered or modified without the prior written consent of both parties and such instrument must acknowledge that it is an amendment or modification of this Agreement.

 

This Agreement may be executed in two counterparts, each of which will be deemed an original and both of which together will constitute one and the same instrument.

 

(b)                         Waiver.  Waiver of any term or condition of this Agreement by any party will not be construed as a waiver of a subsequent breach or failure of the same term or condition, or a waiver of any other term or condition of this Agreement.  Any waiver must be in writing.

 

(c)                          Captions.  The captions in this Agreement are not part of its provisions, are merely for reference and have no force or effect.  If any caption is inconsistent with any provision of this Agreement, such provision will govern.

 

(d)                         Governing Law. The validity, interpretation, construction, performance, enforcement and remedies of, or relating to, this Agreement, and the rights and obligations of the parties hereunder, will be governed by and construed in accordance with the substantive laws of the State of Illinois, without regard to the conflict of law principles, rules or statutes of any jurisdiction.

 

(e)                                  Agreement To Be Available In Future Proceedings.  During the period of employment, and after employment termination (and subject to the Executive’s then-current employment obligations), the Executive agrees, subject to the advice of legal counsel, to voluntarily make himself available to the Company and its legal counsel, at the Company’s request, without the necessity of obtaining a subpoena or court order, in the Company’s investigation, preparation, prosecution and/or defense of any actual or potential legal proceeding, regulatory action, or internal matter.  Subject to the advice of legal counsel, the Executive agrees to provide any information reasonably within the Executive’s recollection.  Payment or reimbursement of the Executive’s expenses will be made promptly and in no event later than December 31 of the year following the year in which such expenses were incurred, and the amount of such expenses eligible for payment or reimbursement, or in-kind benefits provided, in any year will not affect the amount of such expenses eligible for payment or reimbursement, or in-kind benefits to be provided, in any other year.  Additionally, any right to expense reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit.

 

(f)                           Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held by a court of competent jurisdiction to be prohibited or unenforceable for any reason, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

 

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(g)                          Notice.  All notices given hereunder will be in writing and will be sent by registered or certified mail or delivered by hand and, if intended for the Company, will be addressed to it or delivered to it at its principal office for the attention of the Chief Human Resources Officer of the Company.  If intended for the Executive, notices will be delivered personally or will be addressed (if sent by mail) to the Executive’s then current residence address as shown on the Company’s records, or to such other address as the Executive directs in a notice to the Company.  All notices will be deemed to be given on the date received at the address of the addressee or, if delivered personally, on the date delivered.

 

(h)                         Prohibition on Acceleration of Payments.  The time or schedule of any payment or amount scheduled to be paid pursuant to the terms of this Agreement, including but not limited to any restricted stock unit or other equity-based award, payment or amount that provides for the ‘deferral of compensation’ (as such term is described under Code Section 409A), may not be accelerated except as otherwise permitted under Code Section 409A and the guidance and Treasury regulations issued thereunder.

 

(i)                             Code Section 409A.  The parties intend that this Agreement and the benefits provided hereunder be interpreted and construed to comply with Code Section 409A to the extent applicable thereto. The time and form of payment of incentive compensation, disability benefits, severance payments, expense reimbursements and payments of in-kind benefits described herein will be made in accordance with the applicable sections of this Agreement, provided that with respect to termination of employment for reasons other than death, the payment at such time can be characterized as a “short-term deferral” for purposes of Code Section 409A or as otherwise exempt from the provisions of Code Section 409A, or if any portion of the payment cannot be so characterized, and the Executive is a “specified employee” under Code Section 409A, such portion of the payment will be delayed until the earlier to occur of the Executive’s death or the date that is six months and one day following the Executive’s termination of employment (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this section will be paid or reimbursed to the Executive in a lump sum, and any remaining payments due under this Agreement will be payable at the same time and in the same form as such amounts would have been paid.  Further, if the Executive is a “specified employee” and if any equity-based awards granted to the Executive by the Company, pursuant to this Agreement or otherwise, continue to vest upon the Executive’s termination of employment, and are deemed a “deferral of compensation” (as such term is described under Code Section 409A), the equity-based awards will not be settled or released until the expiration of the Delay Period.  For purposes of applying the provisions of Code Section 409A, each separately identifiable amount to which the Executive is entitled will be treated as a separate payment.  In addition, the disability benefits and severance payments will be treated as a series of separate payments.

 

Although the Company intends to administer the Agreement so that it will comply with the requirements of Code Section 409A, the Company does not represent or warrant that the Agreement will comply with Code Section 409A or any other provision of federal, state, local,

 

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or non-United States law.  Provided that the Company administers this Agreement in a manner consistent with the terms of this Agreement, neither the Company, its subsidiaries, nor their respective directors, officers, employees or advisers will be liable to the Executive (or any other individual claiming a benefit through the Executive) for any tax, interest, or penalties the Executive may owe as a result of compensation paid under the Agreement, and the Company and its subsidiaries will have no obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes pursuant to Code Section 409A.

 

The provisions of this Agreement will be construed in a manner in favor of complying with any applicable requirements of Code Section 409A to avoid taxation under Code Section 409A.  If any compensation or benefits provided by this Agreement result in the application of Code Section 409A, the Company will modify this Agreement in the least restrictive manner necessary in order to comply with the provisions of Code Section 409A, other applicable provisions of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions and, in each case, without material diminution in the value of the payments or benefits to the Executive.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

 

	
 
    	
AON CORPORATION
    
	
 
    	
 
    
	
 
    	
/s/ Gregory J. Besio
    
	
 
    	
By: Gregory J. Besio
    
	
 
    	
Its: Executive Vice   President and Chief
    
	
 
    	
Human Resources Officer
    

 

I have read the above Agreement and understand and agree to be bound by its terms.

 

 

	
 
    	
/s/ Stephen P. McGill
    
	
 
    	
Stephen P. McGill
    

 

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