Document:

ex_270898.htm

Exhibit 10.2

 

 EXECUTION VERSION

 

VOTING AND SUPPORT AGREEMENT

 

This VOTING AND SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of August 1, 2021, by and among Sky Harbour LLC, a Delaware limited liability company (the “Company”), Yellowstone Acquisition Company, a Delaware corporation (“Buyer”), BOC Yellowstone LLC, a Delaware limited liability company (“Sponsor I”) and BOC Yellowstone II LLC, a Delaware limited liability company (“Sponsor II” and, together with Sponsor I, “Sponsors”, and each a “Sponsor”), and as to Section 4.11, Boston Omaha Corporation, a Delaware corporation (“Boston Omaha”). The Company, Buyer, and each Sponsor are collectively referred to herein as the “Parties” and each a “Party”.

 

WHEREAS, Buyer and Company are concurrently herewith entering into an Equity Purchase Agreement (as the same may be amended, restated or supplemented, the “Business Combination Agreement”; capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Business Combination Agreement);

 

WHEREAS, each Sponsor is, as of the date of this Agreement, the sole legal owner of the number and class of shares of Buyer Common Stock and Buyer Warrants set forth opposite each such Sponsor’s name on Schedule A hereto (such Buyer Common Stock and Buyer Warrants, together with any other Buyer Common Stock the voting power over which is acquired by any Sponsor during the period from the date hereof and through the date on which this Agreement terminates in accordance with Section 4.6 hereof (the “Voting Period”), being collectively referred to herein as the “Subject Shares”); and

 

WHEREAS, in order to induce the Company to enter into the transactions contemplated in the Business Combination Agreement and the Additional Agreements (the “Transactions”) and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows.

 

NOW, THEREFORE, the Parties hereto agree as follows:

 

ARTICLE I

Representations and Warranties of Sponsors

 

Each Sponsor hereby represents and warrants to the Company and Buyer as follows:

 

1.1    Organization and Standing. Such Sponsor has been duly organized and is validly existing and in good standing under the Laws of the State of Delaware and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Such Sponsor is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.

 

1.2    Authorization; Binding Agreement. Such Sponsor has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereunder; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other proceedings on the part of such Sponsor are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been or shall be when delivered, duly and validly executed and delivered by such Sponsor and, assuming the due authorization, execution and delivery of this Agreement by the other Parties hereto, constitutes, or when delivered shall constitute, the valid and binding obligation of such Sponsor, enforceable against such Sponsor in accordance with its terms, subject to the Remedies Exception.

 

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1.3    Governmental Approvals. No consent of or with any Authority on the part of such Sponsor is required to be obtained or made in connection with the execution, delivery or performance by such Sponsor of this Agreement or the consummation by such Sponsor of the transactions contemplated hereby, other than (a) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, and the rules and regulations thereunder and (b) where the failure to obtain or make such consents or to make such filings or notifications has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of such Sponsor to enter into and perform this Agreement and to consummate the transactions contemplated hereby.

 

1.4    Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by such Sponsor will not (a) conflict with or violate any provision of the Organizational Documents of such Sponsor, (b) conflict with or violate any Law, permit, Order or Consent applicable to such Sponsor or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by such Sponsor under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Lien) upon any of the properties or assets of such Sponsor under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material Contract of such Sponsor, except for any deviations from any of the foregoing clauses (b) or (c) that has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of such Sponsor to enter into and perform this Agreement and to consummate the transactions contemplated hereby.

 

1.5    Subject Shares. As of the date of this Agreement, such Sponsor is the sole legal owner of the Buyer Common Stock and Buyer Warrants set forth opposite such Sponsor’s name on Schedule A hereto, and all such Subject Shares are owned by such Sponsor free and clear of all liens or encumbrances, other than liens or encumbrances pursuant to this Agreement, the Organizational Documents of Buyer or applicable federal or state securities laws. Such Sponsor does not legally own any shares of Buyer other than the Subject Shares. Such Sponsor has the sole right to vote the Subject Shares, and none of the Subject Shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting of the Subject Shares, except as contemplated by this Agreement, the Letter Agreement, dated as of October 21, 2020, among Sponsor I, Buyer and certain of Buyer’s officers and directors (the “Letter Agreement”), or the Organizational Documents of Buyer.

 

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1.6    Business Combination Agreement. Such Sponsor understands and acknowledges that the Company and Buyer are entering into the Business Combination Agreement in reliance upon each such Sponsor’s execution, delivery and performance of this Agreement. Such Sponsor has received a copy of the Business Combination Agreement and is familiar with the terms thereof.

 

ARTICLE II

Representations and Warranties of Buyer

 

Buyer hereby represents and warrants to Sponsors and the Company as follows:

 

2.1    Organization and Standing. Buyer is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Buyer has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Buyer is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.

 

2.2    Authorization; Binding Agreement. Buyer has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceedings on the part of Buyer are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been or shall be when delivered, duly and validly executed and delivered by Buyer and, assuming the due authorization, execution and delivery of this Agreement by the other Parties hereto, constitutes, or when delivered shall constitute, the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the Remedies Exception.

 

2.3   Governmental Approvals. No consent of or with any Authority on the part of Buyer is required to be obtained or made in connection with the execution, delivery or performance by Buyer of this Agreement or the consummation by Buyer of the transactions contemplated hereby, other than (a) applicable requirements, if any, of the Securities Act, the Exchange Act, and/or any state “blue sky” securities Laws, and the rules and regulations thereunder and (b) where the failure to obtain or make such consents or to make such filings or notifications has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of Buyer to enter into and perform this Agreement and to consummate the transactions contemplated hereby.

 

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2.4    Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by Buyer will not (a) conflict with or violate any provision of Organizational Documents of Buyer, (b) conflict with or violate any Law, permit, Order or Consent applicable to Buyer or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by Buyer under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Lien) upon any of the properties or assets of Buyer under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material Contract of Buyer, except for any deviations from any of the foregoing clauses (b) or (c) that has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of Buyer to enter into and perform this Agreement and to consummate the transactions contemplated hereby.

 

ARTICLE III

Representations and Warranties of the Company

 

The Company hereby represents and warrants to Buyer and Sponsors as follows:

 

3.1    Organization and Standing. The Company is a limited liability company duly formed, validly existing and in good standing under the Laws of the State of Delaware. The Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.

 

3.2    Authorization; Binding Agreement. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby. This Agreement has been or shall be when delivered, duly and validly executed and delivered by and, assuming the due authorization, execution and delivery of this Agreement by the other Parties hereto, constitutes, or when delivered shall constitute, the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Remedies Exception.

 

3.3    Governmental Approvals. No consent of or with any Authority on the part of the Company is required to be obtained or made in connection with the execution, delivery or performance by the Company of this Agreement or the consummation by the Company of the transactions contemplated hereby, other than (a) applicable requirements, if any, of the Securities Act, the Exchange Act, and/ or any state “blue sky” securities Laws, and the rules and regulations thereunder and (b) where the failure to obtain or make such consents or to make such filings or notifications has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Company to enter into and perform this Agreement and to consummate the transactions contemplated hereby.

 

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3.4    Non-Contravention. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby and compliance with any of the provisions hereof by the Company will not (a) conflict with or violate any provision of Organizational Documents of the Company, (b) conflict with or violate any Law, permit, Order or Consent applicable to the Company or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by the Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien (other than Permitted Lien) upon any of the properties or assets of the Company under, (viii) give rise to any obligation to obtain any third party consent from any Person or (ix) give any Person the right to declare a default, exercise any remedy, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions of, any material Contract of the Company, except for any deviations from any of the foregoing clauses (b) or (c) that has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Company to enter into and perform this Agreement and to consummate the transactions contemplated hereby.

 

ARTICLE IV

Agreement to Vote; Certain Other Covenants of Sponsor

 

Each Sponsor covenants and agrees during the term of this Agreement as follows:

 

4.1    Agreement to Vote.

 

(a)    In Favor of the Transactions. At any duly called meeting of the stockholders of Buyer called during the Voting Period to seek the approval of the stockholders of Buyer with respect to the Buyer Stockholder Approval Matters, or at any adjournment thereof, or in connection with any written consent of the stockholders of Buyer or in any other duly authorized circumstances upon which a vote, consent or other approval is properly sought with respect to the Transactions or any Buyer Stockholder Approval Matters, each Sponsor shall (i) if a meeting is held, appear at such meeting, in person or by proxy, or otherwise cause the Subject Shares to be counted as present at such meeting for purposes of establishing a quorum, and (ii) vote or cause to be voted (including by class vote and/or written consent, if applicable), in person or by proxy, the Subject Shares in favor of approving the Buyer Stockholder Approval Matters or, if there are insufficient votes in favor of approving the Buyer Stockholder Approval Matters, in favor of the adjournment such meeting of the stockholders of Buyer to a later date.

 

(b)    Against Other Transactions. At any duly called meeting of stockholders of Buyer called during the Voting Period or at any adjournment thereof, or in connection with any written consent of the stockholders of Buyer or in any other duly authorized circumstances upon which Sponsors’ vote, consent or other approval is properly sought, each Sponsor shall vote (or cause to be voted), in person or by proxy, the Subject Shares (including by withholding class vote and/or written consent, if applicable) against (i) any business combination agreement, merger agreement or merger (other than the Business Combination Agreement and the Transactions), scheme of arrangement, business combination, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by Buyer or any public offering of any shares of Buyer, other than in connection with the Transactions, (ii) any offer or proposal relating to an Alternative Proposal, and (iii) any amendment of Organizational Documents of Buyer or other proposal or transaction involving Buyer or any of its Subsidiaries, which, in each of cases (i) and (iii) of this sentence, would be reasonably likely to in any material respect impede, interfere with, delay, adversely affect, prevent or nullify any provision of the Business Combination Agreement or any Additional Agreement, the Transactions or change in any manner the voting rights of any class of Buyer’s share capital.

 

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(c)    Revoke Other Proxies. Each Sponsor represents and warrants that any proxies heretofore given in respect of the Subject Shares that may still be in effect are not irrevocable, and such proxies have been or are hereby revoked, other than the voting and other arrangements under the Organizational Documents of Buyer and the Letter Agreement.

 

(d)    Irrevocable Proxy. Each Sponsor hereby appoints the Company and any individual designated in writing by the Company, and each of them individually, during the Voting Period (upon expiration of which this proxy shall automatically be revoked) as such Sponsor’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of such Sponsor, to vote the Subject Shares, or grant a written consent until the expiration of the Voting Period in respect of the Subject Shares in a manner consistent with Section 4.1(a). Each Sponsor understands and acknowledges that the Company is entering into the Business Combination Agreement in reliance upon such Sponsor’s execution and delivery of this Agreement. The irrevocable proxy granted hereunder shall only terminate upon the termination of this Agreement or earlier expiration of the Voting Period.

 

(e)    Other than (x) pursuant to this Agreement, (y) upon the consent of the Company and Buyer or (z) to an Affiliate of such Sponsor (provided that such Affiliate shall enter into a written agreement, in form and substance reasonably satisfactory to the Company and Buyer, agreeing to be bound by this Agreement to the same extent as such Sponsor was with respect to such transferred Subject Shares), from the date of this Agreement until the date of termination of this Agreement or earlier expiration of the Voting Period, each Sponsor shall not, directly or indirectly, grant any proxies or enter into any voting arrangement, whether by proxy, voting agreement, voting trust, voting deed or otherwise (including pursuant to any loan of Subject Shares), or enter into any other similar agreement, with respect to voting any Subject Shares, in each case, other than as set forth in this Agreement or the voting and other arrangements under the Organizational Documents of Buyer, or as otherwise agreed to by Company and Buyer.

 

4.2    No Transfer. Other than (x) pursuant to this Agreement, (y) upon the consent of the Company and Buyer or (z) to an Affiliate of such Sponsor (provided that such Affiliate shall enter into a written agreement, in form and substance reasonably satisfactory to the Company and Buyer, agreeing to be bound by this Agreement to the same extent as such Sponsor was with respect to such transferred Subject Shares), from the date of this Agreement until the date of termination of this Agreement or earlier expiration of the Voting Period, each Sponsor shall not, directly or indirectly (a) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder, any Subject Share, (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Subject Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) publicly announce any intention to effect any transaction specified in clause (a) or (b) (the actions specified in clauses (a)-(c), collectively, “Transfer”), other than pursuant to the Transactions. Any action attempted to be taken in in violation of the preceding sentence will be null and void. Except as otherwise permitted, each Sponsor agrees with, and covenants to, the Company and Buyer that such Sponsor shall not request that Buyer register the Transfer (by book-entry or otherwise) of any certificated or uncertificated interest representing any of the Subject Shares.

 

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4.3    No Redemption. Such Sponsor irrevocably and unconditionally agrees that, from the date hereof and until the termination of this Agreement, such Sponsor shall not elect to cause Buyer to redeem any Subject Shares now or at any time legally or beneficially owned by such Sponsor, or submit or surrender any of its Subject Shares for redemption, in connection with the transactions contemplated by the Business Combination Agreement or otherwise.

 

4.4    New Shares. In the event that prior to the Closing (i) any Buyer Common Stock or other securities are issued or otherwise distributed to any Sponsor pursuant to any stock dividend or distribution, or any change in any of the Buyer Common Stock or other share capital of Buyer by reason of any stock split-up, recapitalization, combination, exchange of shares or the like, (ii) any Sponsor acquires legal or beneficial ownership of any Buyer Common Stock after the date of this Agreement, including upon exercise of options, settlement of restricted share units or capitalization of working capital loans or (iii) any Sponsor acquires the right to vote or share in the voting of any Buyer Common Stock after the date of this Agreement (collectively, the “New Securities”), the terms “Subject Shares” shall be deemed to refer to and include such New Securities (including all such stock dividends and distributions and any securities into which or for which any or all of the Subject Shares may be changed or exchanged into).

 

4.5     Sponsor Letter Agreement. Each of Sponsor and Buyer hereby agree to comply with, and fully perform all of its obligations, covenants and agreements set forth in the Letter Agreement; and agree that from the date hereof until the termination of this Agreement, none of them shall, or shall agree to, amend, modify or vary the Letter Agreement, except as otherwise provided for under this Agreement, the Business Combination Agreement or any Additional Agreement, unless otherwise agreed to by the parties thereto in furtherance of the transactions contemplated by the Business Combination Agreement.

 

4.6    Termination. This Agreement shall automatically terminate without any further action of the Parties, and none of the Parties shall have any rights, obligations, or liabilities hereunder other than obligations or liabilities for any willful and material breach of this Agreement or fraud by such Party occurring prior to such termination, and this Agreement shall become null and void and have no effect upon the earliest to occur of (i) the Closing (provided, however, that upon such termination, this Section 4.6, Section 4.7, Section 5.1 and Section 5.2 shall survive indefinitely), (ii) the termination of the Business Combination Agreement in accordance with its terms, and (iii) as to each Sponsor, the mutual written consent of Company and such Sponsor.

 

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4.7    Additional Matters. Each Party shall, from time to time at the other Party’s request, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments necessary or desirable to consummate the transactions contemplated by this Agreement.

 

4.8    No Inconsistent Agreement. Each Sponsor hereby represents and covenants that such Sponsor has not entered into, and shall not enter into, any agreement that would restrict, limit or interfere with the performance of such Sponsor’s obligations hereunder.

 

4.9    No Obligation as Director or Officer. Nothing in this Agreement shall be construed to impose any obligation or limitation on votes or actions taken by any director, officer, employee, agent or other representative of any Sponsor or by any direct or indirect shareholder of Sponsor that is a natural person, in each case, in his or her capacity as a director or officer of Buyer.

 

4.10  Waiver of Anti-Dilution Protection. Each Sponsor hereby waives, forfeits, surrenders and agrees not to exercise, assert or claim, to the fullest extent permitted by applicable Law, the ability to adjust the Initial Conversion Ratio (as defined in the Buyer Charter (as defined below)) set forth in Section 4.3(b) of Buyer’s Certificate of Incorporation dated as of October 21, 2020 (the “Buyer Charter”) in connection with the Business Combination Agreement. Notwithstanding the foregoing, the Company acknowledges and agrees that the number of shares of Buyer Class A Common Stock into which all of the outstanding shares of Buyer Class B Common Stock shall convert shall be 3,399,724 shares of Buyer Class A Common Stock, without further deduction or modification, other than in connection with any stock split, reverse stock, split, stock dividend or any similar adjustment.

 

4.11   Back-Stop.

 

(a)          If, at the time of the Closing, the Available Buyer Funding (disregarding clause (z) of the definition of “PIPE Financing Amount”) would be less than the Minimum Available Buyer Funding Amount, then Boston Omaha shall, or shall cause one or more of its affiliates to, purchase shares of PubCo Class A Common Stock through a combination (as determined by Boston Omaha in its discretion) of (x) cash and (y) a number of Back-Stop Shares (free and clear of all Liens) with an aggregate Share Value, (the sum of (x) and (y) being the “Back-Stop Amount”), sufficient to cause Available Buyer Funding to equal Minimum Available Buyer Funding Amount. Boston Omaha and its affiliates making such purchase shall receive in exchange for payment of the Back-Stop Amount that number of shares of PubCo Class A Common Stock equal to (xx) the Back-Stop Amount, divided by (yy) ten (10). Notwithstanding any other provision in this Section 4.11, in no event shall the Back-Stop Amount exceed the sum of $45 million.

 

(b) Any and all sums due under this Section 4.11 shall be paid in the manner as described in Section 4.11(a) at the Closing by wire transfer and/or acceptable transfer of Back-Stop Shares.

 

ARTICLE V

General Provisions.

 

5.1    Notice. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to the Company and Buyer hereto in accordance with Section 8.1 of the Business Combination Agreement and to each Sponsor at its address set forth on Schedule A hereto (or at such other address for a Party as shall be specified by like notice).

 

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5.2    Governing Law. This Agreement, and all Actions or causes of action based upon, arising out of, or related to this Agreement or the Transactions, shall be construed and enforced in accordance with and governed by the Laws (both substantive and procedural) of the State of Delaware, without giving effect to the conflicts of Laws principles thereof.

 

5.3    Miscellaneous. The provisions of Article VII of the Business Combination Agreement are incorporated herein by reference, mutatis mutandis, as if set forth in full herein.

 

[Signature pages follow]

 

 

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IN WITNESS WHEREOF, each Party has duly executed this Agreement, all as of the date first written above.

 

	 	
			SKY HARBOUR LLC

			 

			 

			Signature: Tal Keinan                                              

			 

			Name: Tal Keinan

			 

			Title: Chief Executive Officer

			

 

 

[Signature Page to Sponsor Voting and Support Agreement]

 

 

 

 

IN WITNESS WHEREOF, each Party has duly executed this Agreement, all as of the date first written above.

 

	 	
			YELLOWSTONE ACQUISITION 

			COMPANY

			 

			 

			Signature: Alex B. Rozek                                        

			 

			Name: Alex B. Rozek

			 

			Title: President

			

 

 

[Signature Page to Sponsor Voting and Support Agreement]

 

 

 

 

IN WITNESS WHEREOF, each Party has duly executed this Agreement, all as of the date first written above.

 

	 	
			BOC YELLOWSTONE LLC

			 

			 

			Signature: Alex B. Rozek                                        

			 

			Name: Alex B. Rozek

			 

			Title: President

			

 

 

[Signature Page to Sponsor Voting and Support Agreement]

 

 

 

 

IN WITNESS WHEREOF, each Party has duly executed this Agreement, all as of the date first written above.

 

	 	
			BOC YELLOWSTONE II LLC

			 

			Signature: Alex B. Rozek                                        

			 

			Name: Alex B. Rozek

			 

			Title: President

			

 

 

[Signature Page to Sponsor Voting and Support Agreement]

 

 

 

 

 

 

Schedule A

 

	
			Sponsor / Address

				
			Number and Class of Buyer

			Common Stock

				
			Number of Buyer

			Warrants

			
	
			BOC Yellowstone LLC

				
			3,193,474

				
			7,719,779

			
	
			BOC Yellowstone II LLC

				
			206,250

				
			0

			

 

 

Schedule ADocument

Exhibit 10.1

EMPLOYERS HOLDINGS, INC. 

KEY EXECUTIVE CHANGE IN CONTROL AND SEVERANCE PLAN
AND SUMMARY PLAN DESCRIPTION

1.Introduction.  This Employers Holdings, Inc. Key Executive Change in Control and Severance Plan (as may be amended from time to time, this “Plan”) has been adopted by Employers Holdings, Inc. (the “Company”), and is effective as of August 1, 2021 (the “Effective Date”), in order to provide specified severance pay and benefits to Eligible Employees who (a) incur qualifying terminations of employment, and (b) abide by the terms and conditions for participation in, and receipt of such pay and benefits, as set forth in the Plan.  This Plan is an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended.  This document constitutes both the written instrument under which the Plan is maintained and the summary plan description for the Plan.
2.Important Terms.  The following capitalized words and phrases will have the meanings set forth in this Section 2:
2.1.“Administrator” means the Company, acting through the Board (as defined below), the Human Capital Management and Compensation Committee of the Board or another duly constituted committee of members of the Board, or any person to whom the Administrator or the Board has delegated any authority or responsibility with respect to the Plan pursuant to Section 13, but only to the extent of such delegation.
2.2.“Annual Base Salary” means a Participant’s annual base salary rate in effect immediately before the date on which his or her Involuntary Termination occurs; provided, however, that if the Involuntary Termination is a Good Reason Termination, relating to a material reduction by the Company in the Participant’s then-current annual base salary, then Participant’s Annual Base Salary will be not less than his/her annual base salary rate in effect immediately prior to such reduction; provided, further, that in the event Participant’s Involuntary Termination occurs during the Change in Control Period, then the Eligible Employee’s Annual Base Salary will be not less than his or her annual base salary rate in effect immediately before the Change in Control Period.  The determination of the amount of a Participant’s Annual Base Salary will be made by the Administrator, in accordance with the records of the Employer.
2.3.“Board” means the Board of Directors of the Company.
2.4.“Cause” means the first occurrence of any of the following events on or after the Effective Date:
(a)Failure or inability of the Employee to obtain or maintain any required licenses or certificates; 
(b)Willful violation by the Employee of any law, rule or regulation, including but not limited to any material insurance law or regulation, which violation may, as determined by the Company, adversely affect the ability of the Employee to perform her duties hereunder or may subject the Company to liability or negative publicity; or
(c)Conviction or commission of or the entry of a guilty plea or plea of no contest to any felony or to any other crime involving moral turpitude. 
The determination of whether grounds for Cause exists, including the determination of the cure of any event and/or action, omission or event constituting grounds for Cause, will be made in all cases by the Administrator in accordance with authorities and deference afforded to the Administrator under Section 13 of the Plan.

2.5.“Change in Control” means the first occurrence of any of the following events on or after the Effective Date:
(a)Any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; or
(b)Any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or
(c)A majority of members of the Board is replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or
(d)Any one person or group acquires (or has acquired during the immediately preceding twelve (12)-month period ending on the date of the most recent acquisition) assets of the Company with an aggregate gross fair market value of not less than forty percent (40%) of the aggregate gross fair market value of the assets of the Company immediately prior to such acquisition.  For this purpose, gross fair market value shall mean the fair value of the affected assets determined without regard to any liabilities associated with such assets.  
Notwithstanding the foregoing, (1) a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity that owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions, and (2) a “Change in Control” shall not be deemed to have occurred as result of any secondary offering of Company common stock to the general public through a registration statement filed with the Securities and Exchange Commission.  The Board shall determine whether a Change in Control has occurred hereunder in a manner consistent with the provisions of Section 409A. 
2.6.“Change in Control Period” means, the time period beginning on the date six (6) months prior to the consummation of a Change in Control and ending on (and inclusive of) the date that is twenty-four (24) months following such Change in Control. 

2.7.“Code” means the Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code or regulation under the Code will include such section or regulation, and any valid regulation or other formal guidance of general or direct applicability promulgated under such section, and any comparable provision of any future legislation amending, supplementing or superseding such section or regulation. 
2.8.“Company” means Employers Holdings, Inc., a Nevada corporation, and any successor as described in Section 24.
2.9.“Deferred Payments” means any Severance Benefits to be paid or provided to a Participant pursuant to this Plan and any other severance payments or separation benefits to be paid or provided to such Participant, that in each case, when considered together, are considered deferred compensation under Section 409A. 
2.10.“Disability” means a Participant is deemed to be disabled in accordance with the policies of the Company, or the law, or if the Participant is unable to perform the essential job functions of the Participant’s position with the Company, with or without reasonable accommodation, for a period of more than 100 business days in any 120 consecutive business day period.  The Administrator will determine whether a Participant has incurred a Disability based on such evidence as the Administrator deems necessary or advisable.  The Administrator’s determination as to a Participant’s Disability will be final and binding.
2.11.“Effective Date” has the meaning assigned to it in Section 1 of the Plan. 

2.12.“Eligible Employee” means an employee who is a member of a “select group of management or highly compensated employees” (within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA) of the Company or of any parent or subsidiary of the Company and who has been designated by the Administrator as being eligible to participate in the Plan and has been provided a Participation Agreement by the Administrator.  
2.13.“Employer” means, with respect to an Eligible Employee, the Company or the parent or subsidiary of the Company that directly employs such employee.
2.14.“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.  Any reference to a specific section of ERISA will include such section and any valid regulation or other applicable guidance that has been promulgated under such section and is in effect and any comparable provision of any future legislation amending, supplementing or superseding such section then in effect. 
2.15.“Good Reason Termination” means Participant’s voluntary termination of employment with the Company after one or more of the following is undertaken (through a single action or series of actions) without Participant’s written consent: (a) a material reduction by the Company in the Participant’s then-current Annual Base Salary as compared to the base salary in effect immediately prior to such reduction; or (b) a material reduction of the Participant’s authority, duties or responsibilities, unless Participant is provided with a comparable position.  An event or action will not give the Participant grounds to terminate employment as a Good Reason Termination unless (i) Participant gives the Company written notice within sixty (60) days after the Participant knows or should know of the initial existence of such event or action, (ii) such event or action is not reversed, remedied or cured, as the case may be, by the Company as soon as possible but in no event later than thirty (30) days of receiving such written notice from the Participant (the “Cure Period”), and (iii) the Participant terminates employment within sixty (60) days following the end of the Cure Period.  The determination of whether a Good Reason Termination exists, including the determination of the cure of any event and/or breach constituting a Good Reason Termination, will be made in all cases by the Administrator in accordance with authorities and deference afforded to the Administrator under Section 13 of the Plan.
2.16.“Involuntary Termination” means the termination of a Participant’s employment with the Employer under the circumstances described in Section 4.  For the avoidance of doubt, an Involuntary Termination will not be considered to occur upon transfer of a Participant’s employment between Employers. 
2.17.“Participant” means an Eligible Employee who has timely and properly executed and timely delivered his or her Participation Agreement to the Administrator, as set forth therein.  A Participant’s Severance Benefit levels will be determined by the Administrator and reflected in the Participant’s Participation Agreement, as designated by the Administrator in its sole discretion.
2.18.“Participation Agreement” means the individual agreement provided by the Administrator to an employee of an Employer designating such employee as an Eligible Employee under the Plan.  A form of Participation Agreement is attached hereto as Appendix A.
2.19.“Section 409A” means Section 409A of the Code.
2.20.“Severance Benefits” means the separation-related compensation and other benefits that a Participant will be provided in the circumstances described in Section 4 and set forth in his or her Participation Agreement.
2.21.“Target Bonus” means a Participant’s annualized target bonus amount under the applicable Employer bonus plan, as in effect for the performance period in which the Participant’s Involuntary Termination occurs; provided, however, that in the event such Involuntary Termination occurs during the Change in Control Period, then the Participant’s Target Bonus will be not less than such target bonus amount for the Participant as in effect for the performance period in which the Change in Control occurs.  The determination of the amount of a Participant’s Target Bonus will be made by the Administrator, in accordance with the records of the Employer. 
3.Eligibility for Severance Benefits.  A Participant is eligible for Severance Benefits under the Plan, as described in Section 4, only if he or she is an Eligible Employee on the date he or she experiences an Involuntary Termination and otherwise satisfies the requirements of the Plan. 

4.Involuntary Termination.  
4.1.Involuntary Termination During Change in Control Period.  If, during the Change in Control Period, (a) the Employer terminates a Participant’s employment with the Employer for a reason other than (x) Cause, (y) the Participant’s death, or (z) the Participant’s Disability, or (b) the Participant terminates his or her employment with the Employer due to a Good Reason Termination, then, solely to the extent specifically provided in the Participant’s Participation Agreement, the Participant will receive the following Severance Benefits, subject to Section 5 and Sections 7 through 12 and the Participant’s compliance with Sections 6.1 and 6.2:
    4.1.1    Cash Severance Benefit.  Payments of cash severance for the period and in the amounts set forth in the Participant’s Participation Agreement.
    4.1.2    COBRA Benefit.  If the Participant and any spouse and/or other dependents of the Participant (“Family Members”) have coverage under the group health plan(s) sponsored by the Company on the date of the Participant’s Involuntary Termination (such coverage, “Qualifying Health Coverage”), a lump sum payment representing the premiums as of the date of Participant’s Involuntary Termination for medical, vision and dental coverage for Participant and Participant’s eligible dependents under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended or comparable applicable state law (“COBRA”) (such lump sum payment, the “COBRA Benefits”) for the period set forth in the Participant’s Participation Agreement.
    4.1.3    Miscellaneous Benefit(s).  The Participant will be entitled to such additional benefits, if any, to the extent and on the terms and conditions provided in the Participant’s Participation Agreement.
4.2.Involuntary Termination Other Than During the Change in Control Period.  If (a) the Employer terminates a Participant’s employment for a reason other than (x) Cause, (y) the Participant’s death, or (z) the Participant’s Disability, or (b) the Participant terminates his or her employment with the Employer due to a Good Reason Termination and in either case such Involuntary Termination does not occur during the Change in Control Period, then, solely to the extent specifically provided in the Participant’s Participation Agreement, the Participant will receive the following Severance Benefits, subject to Section 5 and Sections 7 through 12 and the Participant’s compliance with Sections 6.1 and 6.2:
    4.2.1    Cash Severance Benefit.  Payments of cash severance for the period and in the amounts set forth in the Participant’s Participation Agreement;
    4.2.2    COBRA Benefit.  If the Participant and any Family Members have Qualifying Health Coverage, COBRA Benefits for the period set forth in the Participant’s Participation Agreement.
    4.2.3    Miscellaneous Benefit(s).  The Participant will be entitled to such additional benefits, if any, to the extent and on the terms and conditions provided in the Participant’s Participation Agreement. 
5.Limitation on Payments.
5.1.Reduction of Severance Benefits.  If any payment or benefit that Participant would receive from the Company, an Employer or any other party whether in connection with the provisions in this Plan or otherwise (the “Payments”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Payments will be either delivered in full, or delivered as to such lesser extent that would result in no portion of the Payments being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in Participant’s receipt, on an after-tax basis, of the greatest amount of Payments, notwithstanding that all or some of the Payments may be subject to the Excise Tax.  If a reduction in Payments is made in accordance with the immediately preceding sentence, the reduction will occur, with respect to the Payments considered parachute payments within the meaning of Code Section 280G, in the following order:  (i) reduction of cash payments in reverse chronological order (that is, the cash payment owed on the latest date following the occurrence of the event triggering the Excise Tax will be the first cash payment to be reduced); (ii) cancellation of equity awards that were granted “contingent on a change in ownership or control” within the meaning of Section 280G of the Code in the reverse order of date of grant of the equity awards (that is, the most recently granted equity awards will be cancelled first); (iii) reduction of the accelerated vesting of equity awards in the reverse order of date of grant of the equity awards (that is, the vesting of the most recently granted equity awards will be cancelled first); and (iv) reduction of employee benefits in reverse chronological order 

(that is, the benefit owed on the latest date following the occurrence of the event triggering the Excise Tax will be the first benefit to be reduced).  In no event will Participant have any discretion with respect to the ordering of Payment reductions.  Participant will be solely responsible for the payment of all personal tax liability that is incurred as a result of the payments and benefits received under this Plan, and neither the Company nor any Employer or other affiliate of the Company will have any responsibility, liability or obligation to reimburse, indemnify or hold harmless any Participant for any of those payments of personal tax liability.
5.2.Determination of Excise Tax Liability.  Any determinations required under this Section 5 will be made in writing by a nationally recognized accounting or valuation firm (the “Firm”) selected by the Company, whose determinations will be conclusive and binding upon Participant and the Company for all purposes.  For purposes of making the calculations required by this Section 5, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Participant will furnish to the Firm such information and documents as the Firm reasonably may request in order to make determinations under this Section 5.  The Company will bear the costs and make all payments required to be made to the Firm for the Firm’s services that are rendered in connection with any calculations contemplated by this Section 5.  Neither the Company, the Employer nor any parent, subsidiary, or other affiliate of the Company will have any liability to Participant for the determinations of the Firm.
6.Conditions to Receipt of Severance Benefits.
6.1.Severance Benefits Release Requirement. Notwithstanding any contrary Plan provision, as a condition to receiving any Severance Benefits, a Participant will be required to sign and not revoke a separation agreement and release of claims in a form reasonably satisfactory to the Company (the “Severance Release”).  In all cases, the Severance Release must become effective and irrevocable no later than the sixtieth (60th) calendar day following the Participant’s Involuntary Termination (the “Severance Release Deadline Date”).  If the Severance Release does not become effective and irrevocable by the Severance Release Deadline Date, the Participant will forfeit any right to receive any and all Severance Benefits.  In no event will any Severance Benefits be paid or provided until the Severance Release becomes effective and irrevocable.  
6.2.Other Requirements.  A Participant’s receipt of Severance Benefits will be subject to the Participant continuing to comply with the provisions of the Participant’s Severance Release, which will include provisions including but not limited to: applicable restrictive covenants related to non-competition, non-solicitation, confidentiality, return of Company (or Employer, as applicable) property, post termination cooperation and work for hire provisions.  Any Severance Benefits will terminate immediately for a Participant if the Participant at any time, violates any such agreement and/or his or her Severance Release, and Participant will be obligated to repay all Severance Benefits paid or provided to the Participant. 
7.Payment Timing.
7.1.Severance Benefits.  Provided that a Participant’s Severance Release becomes effective and irrevocable by the Severance Release Deadline Date (as defined in Section 6.1) and subject to Section 9 and the terms of the Participant’s Participation Agreement, any Severance Benefits will be paid, or in the case of installments, will commence, within a sixty(60) day period following the Participant’s Involuntary Termination (the “Payment Date”), and any Severance Benefits otherwise payable to the Participant during the period immediately following the Participant’s Involuntary Termination through the Payment Date will be paid in a lump sum to the Participant on the Payment Date, with any remaining payments to be made as provided in the Plan or the Participant’s Participation Agreement, as applicable; provided, however, to the extent that any Severance Benefits are a Deferred Payment, such payment shall be made in the later year if the sixty (60) day period spans two taxable years.  Further, and notwithstanding the foregoing, if Participant’s Involuntary Termination occurs before a Change in Control and additional Severance Benefits become payable as a result of the Change in Control occurring within three (3) months following such Involuntary Termination, then any additional Severance Benefits, will be paid on the later of (a) the first regularly scheduled payroll date of the Company following the Severance Release Deadline, or (b) the date of the Change in Control, in each case subject to any delay required by Section 9.  
8.Exclusive Benefits; Non-Duplication of Benefits.  

8.1.Prior Benefits.  Effective as of the date the Participant enters into a Participation Agreement, after the expiration of their applicable employment agreements, the benefits, if any, provided under this Plan will be the exclusive benefits for a Participant related to his or her termination of employment with the Employer and/or a change in control of the Company and will supersede and replace any severance and/or change in control benefits set forth in any offer letter, employment and/or severance agreement between the Participant and the Company or the Employer, as applicable; provided however, the Plan will not supersede or replace any benefits provided under the applicable equity plan and corresponding equity agreements or the applicable annual bonus program.
8.2.Future Benefits.  In the event that, after becoming a Participant, the Participant becomes entitled to receive a Severance Benefit under this Plan and such benefit duplicates a benefit that otherwise would be provided to the Participant under any other Company or Employer plan, program or arrangement, or under a written employment agreement or offer of employment letter between the Participant and the Company or Employer (collectively, the “Other Plan”), as a result of the Participant’s termination of Participant’s employment with the Employer, then the Participant will be entitled to receive the greater of (a) the Severance Benefit available under this Plan, and (b) the benefit available under such Other Plan.  
8.3.Benefits Under this Plan.  For purposes of clarity, in the event of an Involuntary Termination that occurs during the three (3) month period immediately preceding a Change in Control, any Severance Benefits to be provided to Participant under Section 4.1 will be reduced by any amounts that already were provided to Participant under Section 4.2.
9.Section 409A.
9.1.General.  Notwithstanding anything to the contrary in this Plan or any Participation Agreement, no Deferred Payments, if any, will be paid or provided until the Participant has a “separation from service” within the meaning of Section 409A (a “Separation from Service”).  Similarly, no Severance Benefits payable to a Participant, if any, which otherwise would be exempt from Section 409A pursuant to Treasury Regulations Section 1.409A-1(b)(9), will be payable until the Participant has a Separation from Service. 
9.2.Exemption; Compliance.  It is intended that none of the Severance Benefits will constitute Deferred Payments so will not constitute deferred compensation within the meaning of Section 409A, but rather that all payments and benefits under this Plan will be exempt from Section 409A as payments that would fall within the “short-term deferral period” or result from an involuntary separation from service (as defined in Section 409A), as described in Section 9.4.  It also is intended that, to the extent any such Severance Benefits otherwise are not excluded from coverage under Section 409A pursuant to the exceptions in the immediately preceding sentence, they are excluded from coverage under Section 409A pursuant to the “limited payment” exception under Treasury Regulations Section 1.409A-1(b)(9)(v)(D), but only to the extent permitted by such regulation.  In no event will a Participant have discretion to determine the taxable year of payment of any Deferred Payment.  
9.3.Required Delay.  Notwithstanding any contrary Plan provision, if a Participant is a “specified employee” within the meaning of Section 409A at the time of his or her Separation from Service (other than due to death), then the Deferred Payments, if any, that are payable within the first six (6) months following such Separation from Service, will become payable on the date that is six (6) months and one (1) day following the date of such Separation from Service.  Any subsequent Deferred Payment, if any, will be payable in accordance with the payment schedule applicable to such payment.  Notwithstanding anything herein to the contrary, in the event of the Participant’s death following his or her Separation from Service, but before the date six (6) months following such Separation from Service, then any payments delayed in accordance with this Section 9.3 will be payable in a lump sum as soon as administratively practicable after the date of the Participant’s death and any other Deferred Payment will be payable in accordance with the payment schedule applicable to such payment.  Each payment, installment and benefit payable under this Plan is intended to constitute a separate payment under Treasury Regulations Section 1.409A-2(b)(2).
9.4.Certain Exemptions. Any amount paid under this Plan that (x) satisfies the requirements of the “short-term deferral” rule set forth in Treasury Regulations Section 1.409A-1(b)(4) or (y) qualifies as a payment made as a result of an involuntary separation from service pursuant to Treasury Regulations Section 1.409A-1(b)(9)(iii) that does not exceed the limit set forth in Treasury Regulations Section 1.409A-1(b)(9)(iii)(A) 

will not constitute a Deferred Payment for purposes of Section 9.1. All amounts paid under this Plan will be paid to the applicable Participant as provided under the Plan and the Participant’s Participation Agreement, but in no event later than the last day of the second taxable year of the Participant following the taxable year of the Participant in which the Participant’s Separation from Service occurs.
9.5.Interpretation; Other Requirements.  The foregoing provisions are intended to comply with or be exempt from the requirements of Section 409A so that none of the Severance Benefits to be provided under the Plan will be subject to the additional tax imposed under Section 409A, and any ambiguities and ambiguous terms herein will be interpreted to so comply or be exempt.  For purposes of the Plan, to the extent required to be exempt from or comply with Section 409A, any references to Participant’s Involuntary Termination or similar phrases relating to the termination of an Participant’s employment will be references to his or her Separation from Service (as defined in Section 9.1).  Notwithstanding any contrary Plan provision, including but not limited to Section 16, the Company, by action of the Administrator, reserves the right to amend the Plan as it deems necessary or advisable, in its sole discretion and without the consent of any Participant or other person or entity, to comply with Section 409A or to avoid income recognition under Section 409A or to otherwise avoid the imposition of additional tax under Section 409A prior to the actual payment or provision of any Severance Benefits.  In no event will the Company, any Employer or any parent, subsidiary or other affiliate of the Company have any responsibility, liability or obligation to reimburse, indemnify or hold harmless Participant for any taxes, penalties or interest that may be imposed, or other costs that may be incurred, as a result of Section 409A.
10.Withholdings.  The Employer and/or Company (and/or any parent, subsidiary or other affiliate of the Company, as applicable) will have the right and authority to deduct from any payments or benefits all applicable federal, state, local, and/or nonU.S. taxes or other required withholdings and payroll deductions (“Withholdings”).  Prior to the payment of any amounts or provision of any benefits under this Plan, the Employer and/or Company (and/or any parent, subsidiary or other affiliate of the Company, as applicable) is permitted to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any applicable Withholdings with respect to such payments and benefits.  Neither the Company, the Employer nor any parent, subsidiary or other affiliate of the Company will have any responsibility, liability, or obligation to pay the Participant’s taxes arising from or relating to any payments or benefits under this Plan.
11.Mitigation.  The Participant shall not be required to mitigate damages or the amount of any payment provided under this Agreement by obtaining other employment or otherwise after the termination of employment hereunder, and any amounts earned by the Participant, whether from self-employment or other employment shall not reduce the amount of any Severance Benefits, as the case may be, called for herein.

12.Indebtedness of Participants. If a Participant is indebted to the Company (or Employer, as applicable) on the date of the Participant’s Involuntary Termination, the Company reserves the right to offset the payment of any Severance Benefits under the Plan by the amount of such indebtedness.  Such offset shall be made only to the extent permitted under applicable laws.  The Participant’s execution of the Participant’s Participation Agreement constitutes knowing written consent to the foregoing.
13.Administration.  The Company is the administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).  The Plan will be administered, interpreted and operated by the Administrator (in its sole discretion).  The Administrator will have the exclusive right and full discretion to (a) interpret the Plan, (b) designate the management or highly compensated employees of the Employer who are eligible to participate in the Plan and to provide Participation Agreements to any such Eligible Employees, (c) decide any and all matters arising under the Plan or any Participation Agreement (including the right to remedy possible ambiguities, inconsistencies, or omissions), (d) make, amend and rescind such rules as it deems necessary or appropriate for the proper administration of the Plan, and (e) make all other determinations and resolve all questions of fact necessary or advisable for the administration of the Plan, including eligibility for any benefit or payment under the Plan.  Any decision made or other action taken by the Administrator (or its authorized delegates) with respect to the Plan, and any interpretation by the Administrator (or its authorized delegates) of any term or condition of the Plan (including but not limited with respect to whether an Involuntary Termination or a Change in Control has occurred), or any related document, will be final, conclusive and binding on all persons and be given the maximum possible deference allowed by law.  In accordance with Section 2.1, the Administrator (a) in its sole discretion and on such terms and 

conditions as it may provide, may delegate in writing to one or more officers of the Company all or any portion of its authority or responsibility with respect to the Plan, and (b) has the authority to act for the Company as to any matter pertaining to the Plan.  The Administrator is the appropriate named fiduciary of the Plan solely for purposes of the Plan’s claims and appeal procedures set forth in Section 17.
14.Eligibility to Participate.  To the extent that the Administrator has delegated administrative authority or responsibility to one or more officers of the Company in accordance with Sections 2.1 and 13, each such officer will not be excluded from participating in the Plan if otherwise eligible, but he or she is not entitled to act upon or make determinations regarding any matters pertaining specifically to his or her own benefit or eligibility under the Plan.  The Administrator will act upon and make determinations regarding any matters pertaining specifically to the benefit or eligibility of each such officer under the Plan.
15.Term.  The Plan will become effective upon the Effective Date and will terminate automatically upon the completion of all benefits (if any) under the terms of the Plan.
16.Amendment or Termination.  The Company, by action of the Board or the Administrator, reserves the right to amend or terminate the Plan at any time, without advance notice (except as otherwise provided below) to any Participant or other person or entity, and without regard to the effect of the amendment or termination on any Participant or such other person or entity.  Any amendment or termination of the Plan must be in writing.  In addition, notwithstanding the preceding, upon, in connection with or after a Change in Control, the Company, without a Participant’s written consent, may neither amend or terminate the Plan in any way nor take any other action under the Plan, which (i) prevents that Participant from becoming eligible for Severance Benefits, or (ii) reduces or alters to the detriment of the Participant the Severance Benefits, if any, payable, or potentially payable, to him or her (including, without limitation, imposing additional conditions).  
17.Claims and Review Procedures.
17.1.General.  Any Participant who believes he or she is entitled to but has not received a benefit or payment under the Plan or disagrees with the determination of the amount of any Plan benefit or payment or any other decision regarding his or her interest under the Plan (or his or her authorized legal representative) (the “Claimant”) must submit such claim (the “Claim”) in writing to the Administrator at the following address within ninety (90) calendar days after the date the Claimant first knew or should have known of the facts on which the Claim is based, unless the Administrator consents otherwise in writing or ERISA provides otherwise:  Employers Holdings, Inc., Plan Administrator of the Employers Holdings, Inc. Key Executive Change in Control and Severance Plan, 10375 Professional Circle, Reno, NV 89521-4802.  The Claim must set forth the nature of the benefit claimed, the amount of such benefit and the basis for claiming entitlement to such benefit.
17.2.Non-Disability Benefit Claims.  
17.2.1.Non-Disability Benefit Claims Procedure.  If a Claimant submits a Non-Disability Benefit Claim (as defined below) to the Administrator in accordance with the requirements set forth in Section 17.1, and the Non-Disability Benefit Claim is denied (in full or in part), the Claimant will be provided a written notice of such denial within ninety (90) calendar days after the Administrator’s receipt of the Non-Disability Benefit Claim, unless special circumstances require an extension of time (up to ninety (90) more calendar days), in which case written notice of the extension will be given to the Claimant within the initial ninety (90)-day review period.  This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision on the Non-Disability Benefit Claim.  The denial notice will include: (a) the specific reason(s) for the denial; (b) references to the specific Plan provision(s) on which the denial was based; (c) a description of any additional material or information that is necessary to perfect the Claim and an explanation of why such material or information is necessary; (d) a description of the Plan’s procedures for appealing the denial and the time limits applicable to such procedures; (e) a statement regarding the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on appeal pursuant to the Plan’s procedures; and (f) any other information required by ERISA.  A “Non-Disability Benefit Claim” means a Claim that does not involve any determination of Disability by the Administrator.
17.2.2.Appeal Procedure.  A Claimant may appeal a denied Non-Disability Benefit Claim by filing a request for review of such denial in writing with the Administrator at the address noted in Section 17.1.  Such request must be made no later than sixty (60) calendar days following the date the Claimant received the 

written notice of denial or such later deadline as may be prescribed by ERISA.  The Claimant then has the right to review and obtain copies of all documents and other information relevant to the Non-Disability Benefit Claim, upon written request and at no charge, and to submit comments, documents and other information relating to such Claim in writing.  If the Claimant files a timely appeal, as described above, the Administrator will provide written notice of its decision on review (whether or not adverse) within sixty (60) calendar days after it received the timely request for review, unless special circumstances require a longer period of time, in which case a decision will be rendered as soon as possible, but not later than one hundred and twenty (120) calendar days after receipt of the timely review request.  The Claimant will be given written notice of any such extension before the end of the original 60-day review period, as well as the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision.  If the Administrator denies the appealed Non-Disability Benefit Claim, the notice of denial will include: (a) the specific reason(s) for the denial; (b) references to the specific provision(s) of the Plan on which the denial was based; (c) a statement that the Claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents and other information relevant to such Claim; (d) a statement regarding the Claimant’s right to bring a civil action under Section 502(a) of ERISA following the denial on review pursuant to the Plan’s procedures; and (e) any other information required by ERISA.
17.3.Disability Benefit Claims.  
17.3.1.Disability Benefit Claims Procedure.  If a Claimant submits a Disability Benefit Claim (as defined below) to the Administrator in accordance with the requirements set forth in Section 17.1, and the Disability Benefit Claim is denied (in full or in part), the Claimant will be provided a written notice of such denial within forty-five (45) calendar days after the Administrator’s receipt of the Disability Benefit Claim.  However, this forty-five (45)-day time period may be extended for up to thirty (30) more calendar days for matters beyond the control of the Administrator, in which case the Claimant will be notified in writing of the extension of time before the end of the initial forty-five (45)-day review period.  This notice of extension will indicate the circumstances requiring the extension of time and the date by which the Administrator expects to render its decision on the Disability Benefit Claim.  If, before the end of the first thirty (30)-day extension period, the Administrator determines that, due to matters beyond its control, a decision cannot be rendered within that extension period, then the period for making the determination may be extended for up to thirty (30) more calendar days, in which case the Claimant will be notified in writing of the additional extension of time before the end of the initial thirty (30)-day extension period.  This notice of extension will indicate the circumstances requiring the additional extension of time and the date by which the Administrator expects to render its decision on the Disability Benefit Claim.  Any notice of extension also will explain the standards on which entitled to the applicable benefit is based, the unresolved issues that prevent a decision on the Disability Benefit Claim, the additional information needed to resolve those issues, and notice that the Claimant will be afforded at least forty-five (45) calendar days within which to provide the specified information.  
The denial notice will include: (a) the specific reason(s) for the denial; (b) references to the specific Plan provision(s) on which the denial was based; (c) a description of any additional material or information that is necessary to perfect the Disability Benefit Claim and an explanation of why such material or information is necessary; (d) a statement that the Claimant will be provided, upon request and free of charge, reasonable access to and copies of, all documents and other information relevant to the Disability Benefit Claim; (e) a description of the Plan’s procedures for appealing the denial and the time limits applicable to such procedures; (f) a statement regarding the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on appeal pursuant to the Plan’s procedures, including a description of the contractual limitations period that applies to bringing such action, as well as the calendar date on which the contractual limitations period expires; (g) a copy of any internal rule, guideline, protocol or other similar criteria relied on in denying the Disability Benefit Claim or a statement that such rule, guideline, protocol or other similar criteria do not exist; (h) a discussion of the Administrator’s decision, including an explanation of the Administrator’s basis for disagreeing with, or not following, as applicable: (1) the views of the Claimant’s treating health care professionals and/or vocational experts who evaluated the Claimant, if provided by the Claimant,  (2) the views of medical and/or vocational experts whose advice was obtained on behalf of the Plan in connection with the denial, without regard to whether the Administrator relied upon such advice in making the benefit determination, and (3) the federal Social Security Administration’s determination of disability, if provided by the Claimant; and (i) any other information 

required by ERISA.  A “Disability Benefit Claim” means a Claim that involves a determination of Disability by the Administrator.
17.3.2.Appeal Procedure.  A Claimant may appeal a denied Disability Benefit Claim by filing a request for review of such denial in writing with the Administrator at the address noted in Section 17.1.  Such request must be made no later than one hundred eighty (180) calendar days following the date the Claimant received the written notice of denial or such later deadline as may be prescribed by ERISA.  The Claimant then has the right to review and obtain copies of all documents and other information relevant to the Disability Benefit Claim, upon written request and at no charge, and to submit comments, documents and other information relating to such Claim in writing.  If the Claimant files a timely appeal, as described above, the Administrator will provide written notice of its decision on review (whether or not adverse) within forty-five (45) calendar days after it received the timely request for review, unless special circumstances require a longer period of time, in which case a decision will be rendered as soon as possible, but not later than ninety (90) calendar days after receipt of the timely review request.  The Claimant will be given written notice of any such extension before the end of the original 45-day review period, as well as the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision.  Before any denial on review may be issued, however, the Administrator will provide the Claimant, free of charge, with any new or additional evidence considered, relied upon or generated in connection with the Disability Benefit Claim.  Moreover, before any denial on review based on a new or additional rationale may be issued, the Administrator will provide the Claimant, free of charge, with such rationale.  Any evidence or rationale will be provided as soon as possible and sufficiently in advance of the date when the Administrator must issue its decision on review to give the Claimant a reasonable opportunity to respond before that date.  The review of the appealed Disability Benefit Claim will be conducted by the Administrator (who will not be the individual who decided the initial Disability Benefit Claim nor the subordinate of such individual).  In deciding an appeal of any denied Disability Benefit Claim that is based in full or in part on a medical judgment, the Administrator will consult with a health care professional (who will neither be an individual who was consulted in connection with the initial Disability Benefit Claim nor the subordinate of such individual) who has appropriate training and experience in the field of medicine involved in the medical judgment.  Any medical or vocational experts whose advice was obtained on behalf of the Administrator in connection with such denied Claim will be identified, regardless of whether the advice was relied upon in denying the Disability Benefit Claim.
If the Administrator denies the appealed Disability Benefit Claim, the denial notice will include: (a) the specific reason(s) for the denial; (b) references to the specific provision(s) of the Plan on which the denial was based; (c) a statement that the Claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents and other information relevant to the Disability Benefit Claim; (d) a copy of any internal rule, guideline, protocol or other similar criteria relied on in denying the Disability Benefit Claim or a statement that such rule, guideline, protocol or other similar criteria do not exist; (e) a discussion of the Administrator’s decision, including an explanation of the Administrator’s basis for disagreeing with, or not following, as applicable: (1) the views of the Claimant’s treating health care professionals and/or vocational experts who evaluated the Claimant, if provided by the Claimant, (2) the views of medical and/or vocational experts whose advice was obtained on behalf of the Plan in connection with the denial, without regard to whether the Administrator relied upon such advice in making the benefit determination, and (3) the federal Social Security Administration’s determination of disability, if provided by the Claimant; (f) a statement regarding the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on appeal pursuant to the Plan’s procedures, including a description of the contractual limitations period that applies to bringing such action, as well as the calendar date on which the contractual limitations period expires; and (g) any other information required by ERISA.
If the Administrator does not strictly adhere to the Plan’s claims and appeal procedures for Disability Benefit Claims, as set forth in this Section 17.3 (the “Disability Claim Procedures”), the Claimant may be deemed to have exhausted the Plan’s administrative remedies and may be able to seek judicial review of the Claimant’s Disability Benefit Claim.  Such deemed exhaustion does not apply, however, if the Administrator’s failure to strictly adhere to the Disability Claim Procedures was a de minimis violation not likely to cause prejudice or harm to the Claimant and if the other applicable requirements under ERISA are met.  The Claimant may request a written explanation of such a violation from the Administrator.  Within ten (10) calendar days of the Claimant’s request, the Administrator will provide such explanation, including a specific description of the bases, if any, for 

asserting that the violation should not cause the Disability Claim Procedures to be deemed exhausted.  A Disability Benefit Claim rejected by a court for immediate review based on deemed exhaustion will be considered refiled under the Plan upon the Plan’s receipt of the court’s decision.  Within a reasonable time after receipt of the court’s decision, the Administrator will provide the Claimant with notice of the Disability Benefit Claim’s resubmission.
17.4.COVID-19.  Notwithstanding the foregoing, the sixty (60)-day period following the announced end of the COVID-19 U.S. national emergency or such other date announced by the Internal Revenue Service and the Employee Benefits Security Administration in a future notification will be disregarded for any Claimant in determining the date by which the Claimant may file a Claim or file an appeal of an adverse benefit determination under the Plan
17.5.Exhaustion of Plan’s Claims and Appeal Procedure Required; Limitations on any Legal Actions; Venue.  Exhaustion of the Plan’s applicable claims and appeal procedure set forth in this Section 17 is mandatory for resolving any Claim under the Plan before initiating any legal action relating to the Claim.  Any legal action with respect to a Claim, if permitted, must be brought (a) no later than one (1) year after the Administrator’s denial of such Claim on appeal, regardless of any state or federal statutes establishing provisions relating to limitations on actions, and (b) in the U.S. District Court for Nevada.  In any such action, all determinations made by the Administrator (and its authorized delegates) in connection with its review of the Claim will be afforded the maximum possible deference permitted by law.
18.Attorneys’ Fees.  The parties will each bear their own expenses, legal fees and other fees incurred in connection with this Plan.
19.Source of Payments.  The Plan will be maintained at all times in a manner to be considered “unfunded” for purposes of ERISA.  Any Severance Benefits will be paid from the general funds of the Company; no separate fund will be established under the Plan, and the Plan will have no assets.  No right of any person to receive any payment or benefit under the Plan will be any greater than the right of any other general unsecured creditor of the Company, the Employer or any other parent, subsidiary or affiliate of the Company. 
20.No Guarantee of Tax Consequences.  Participants (or their beneficiaries) solely will be responsible for any and all taxes with respect to any payments or benefits provided under the Plan.  None of the Administrator, the Company, the Employer or any parent, subsidiary or other affiliate of the Company makes any guarantees regarding the tax treatment to any person of any payments or benefits provided under the Plan.
21.Inalienability.  In no event may any current or former employee of any Employer sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan, except as provided in this Section.  Any other attempted assignment, transfer, conveyance, or other disposition of a Participant’s right to compensation or other benefits will be null and void.  At no time will any of a Participant’s rights or interests under the Plan be subject to the claims of creditors nor liable to attachment, execution or other legal process. If any payments or benefits are payable to a Participant who is unable to care for his or her affairs, payment may be made directly to his or her legal guardian or personal representative.  
22.Death.  Notwithstanding anything to the contrary in the Plan, if a Participant dies after his or her Involuntary Termination and after the Participant (or the authorized representative of the Participant’s estate) have timely executed and returned the Severance Release, as applicable, to the Administrator (without having timely revoked it) but before receiving all of the payments and benefits otherwise payable to him or her, such remaining payments and benefits instead will be paid to the executor of the Participant’s estate, on behalf of the estate, at the time(s) and in the form(s) applicable to such payments and benefits, as applicable, under the Plan.
23.No Enlargement of Employment Rights.  Neither the establishment or maintenance or amendment of the Plan, nor the making of any benefit payment hereunder, will be construed to confer upon any individual any right to continue to be an employee of the Company, the Employer or any parent, subsidiary or other affiliate of the Company.  The Company and the applicable Employers expressly reserve the right to discharge any of their employees at any time and for any reason, with or without cause or notice, as permitted by applicable law.  However, as described in the Plan, a Participant may be entitled to benefits under the Plan depending upon the circumstances of the termination of his or her employment.

24.Successors.  Any successor to the Company of all or substantially all of the Company’s business and/or assets (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or other transaction) will assume the obligations under the Plan and agree expressly to perform the obligations under the Plan in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under the Plan, the term “Company” will include any successor to the Company’s business and/or assets which become bound by the terms of the Plan by operation of law, or otherwise.
25.Applicable Law.  The Plan is intended to be an unfunded deferred compensation plan within the meaning of U.S. Department of Labor Regulations Section 2520.104-23 and will be construed, administered and enforced as such in accordance with ERISA.  The provisions of the Plan will be construed, administered and enforced in accordance with ERISA and, to the extent applicable, the internal substantive laws of the State of Nevada (but not its conflict of laws provisions).  
26.Severability.  If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.
27.Headings.  Headings in this Plan document are for purposes of reference only and will not limit or otherwise affect the meaning, construction or interpretation of the Plan’s provisions.
28.Indemnification.  The Company hereby agrees to indemnify and hold harmless the officers and employees of the Company, and the members of the Board, from all losses, claims, costs or other liabilities arising from their acts or omissions in connection with the administration, amendment or termination of the Plan, to the maximum extent permitted by applicable law.  This indemnity will cover all such liabilities, including judgments, settlements and costs of defense.  The Company will provide this indemnity from its own funds to the extent that insurance does not cover such liabilities.  This indemnity is in addition to and not in lieu of any other indemnity provided to such person by the Company.
29.Protected Activity.  Notwithstanding any contrary provision of the Plan or of the Severance Release, nothing in this Plan, the Severance Release shall prohibit or impede Participant from engaging in any Protected Activity.  For purposes of this Plan, “Protected Activity” shall mean (i) filing and/or pursuing a charge or complaint with, or otherwise communicating or cooperating with or participating in any investigation or proceeding that may be conducted by, any federal, state or local government agency or commission, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board (“Government Agencies”); (ii) discussing the terms, wages, and working conditions of their employment among employees, as protected by applicable law; (iii) disclosing information pertaining to sexual harassment or any unlawful or potentially unlawful conduct, as protected by applicable law.  Notwithstanding the foregoing, the Participant agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company confidential information as defined in the Participant’s Severance Release.  The Participant further understands that Protected Activity does not include disclosure of any Company attorney-client privileged communications or attorney work product.  The Participant understands and acknowledges that pursuant to the Defend Trade Secrets Act of 2016 (A) an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (i) in confidence to a Federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and (B) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

30.Additional Information.
						
	Plan Name:	Employers Holdings, Inc. Key Executive Change in Control and Severance Plan
	Plan Sponsor:	Employers Holdings, Inc.
General Counsel
10375 Professional Circle
Reno, Nevada 89521-4802
	Identification Numbers:	EIN:  04-3850065
PLAN:  #505

	Plan Year:	Company’s Fiscal Year
	Plan Administrator:	Employers Holdings, Inc.
10375 Professional Circle
Reno, Nevada 89521-4802
Attention: Administrator of the Employers Holdings, Inc. Key Executive Change in Control and Severance Plan 
775-327-2708

		
	Agent for Service of
Legal Process:	Employers Holdings, Inc.
Attention: General Counsel
10375 Professional Circle
Reno, Nevada 89521-4802
775-327-2547

		Service of process may also be made upon the Administrator.
	Type of Plan	Severance Plan/Employee Welfare Benefit Plan
	Plan Costs	The cost of the Plan is paid by the Company.

31.Statement of ERISA Rights.
As a Participant under the Plan, you have certain rights and protections under ERISA:
You may examine (without charge) all documents governing the Plan, including a copy of the latest annual report (Form 5500 Series), if any, filed with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.  These documents are available for your review in the Company’s Human Resources Department during regular business hours.
You may obtain copies of all documents governing the operation of the Plan, including copies of the latest annual report (Form 5500 Series), if any, upon written request to the Administrator.  A reasonable charge may be made for such copies.
In addition to creating rights for Participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan.  The people who operate the Plan (called “fiduciaries”) have a duty to do so prudently and in the interests of you and the other Participants.  No one, including the Company or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit under the Plan or exercising your rights under ERISA.  However, this rule neither guarantees your employment with the Company or any parent or subsidiary of the Company, nor affects the Company’s, or its parent’s or subsidiary’s, or your right to terminate your employment for other reasons.  If your claim for a Plan benefit is denied, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge and to request a review of any denial, all within certain time schedules.  (The claim review procedure is explained in Section 17 above.)
Under ERISA, there are steps you can take to enforce the above rights.  For example, if you request a copy of Plan documents and do not receive them within thirty (30) days, you may file suit in a federal court.  In such a case, the court may require the Administrator to provide such documents and to pay you up to $110 a day until you 

receive them, unless the documents were not sent because of reasons beyond the control of the Administrator.  If you have a claim for a Plan benefit that is denied, in whole or in part, and you have been through the Plan’s claims and review procedure set forth in Section 17, or you have a claim for a Plan benefit that is ignored, you may file suit in a state or federal court.  However, any lawsuit or other court action must be filed no later than one (1) calendar year after receipt of the final claim denial, regardless of any state or federal statutes establishing provisions relating to limitations on actions.  If you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court.
The court will decide who will pay court costs and legal fees.  If you are successful, the court may order the person you have sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds that your claim is frivolous.
If you have any questions regarding the Plan, please contact the Administrator.  If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Administrator, you should contact the nearest area office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210.  You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
*          *          *
    

Appendix A
FORM OF 

EMPLOYERS HOLDINGS, INC. 
KEY EXECUTIVE CHANGE IN CONTROL AND SEVERANCE PLAN

PARTICIPATION AGREEMENT

Employers Holdings, Inc. (the “Company”) is pleased to inform you, [NAME], that you have been selected to participate in the Company’s Key Executive Change in Control and Severance Plan (the “Plan”).  A copy of the Plan has been delivered to you with this Participation Agreement.  Your participation in the Plan is subject to all of the terms and conditions of the Plan, including this Participation Agreement. 
In order to actually become a Participant in the Plan, as described in the Plan, you must complete and sign this Participation Agreement and return it to [NAME] by no later than [DATE].
The Plan describes in detail certain circumstances under which you, if you are a Participant in the Plan, may become eligible for Severance Benefits and certain other benefits enumerated hereunder.  Any capitalized term used in this Participation Agreement that is not otherwise defined herein will have the meaning ascribed to such term in the Plan.
As described more fully in the Plan, if you are a Participant in the Plan, you may become eligible for certain Severance Benefits under Section 4.1 if during the Change in Control Period as set forth in Section A below, or Section 4.2 if not during the Change in Control Period as set forth in Section B below. 
A.    Involuntary Termination of Employment During the Change in Control Period.
In the event of an Involuntary Termination that occurs under the circumstances described in Section 4.1 of the Plan and subject to the terms and conditions of the Plan (including the Severance Release requirement under the Plan), you will receive the following Severance Benefits: 
1.Cash Severance Benefits.  
a.A lump sum cash payment in an aggregate amount equal to [CEO: three hundred percent (300%)] OR [EVP: two hundred percent (200%)] OR [SVP: one hundred percent (100%)] of your Annual Base Salary, subject to normal withholdings; and
b.A lump sum cash payment in an aggregate amount equal to [CEO: three hundred percent (300%)] OR [EVP: two hundred percent (200%)] OR [SVP: one hundred percent (100%)] of your Target Bonus, subject to normal withholdings, will be paid as set forth in the Plan. 
2.COBRA Benefit.  If you and any Family Members have Qualifying Health Coverage (as defined in Section 4.1.2 of the Plan), COBRA Benefits will consist of a lump sum payment equal to [CEO: thirty-six (36)] OR [EVP: twenty-four (24)] OR [SVP: twelve (12)] months of the premiums for medical, vision and dental coverage for Participant and Participant’s eligible dependents under COBRA.
3.No Equity Award Vesting Acceleration Benefit.  For the avoidance of doubt, you will not be entitled to any Equity Award vesting acceleration benefit under the Plan.
B.    Involuntary Termination of Employment Not During the Change in Control Period.
In the event of an Involuntary Termination that occurs under the circumstances described in Section 4.2 of the Plan and subject to the terms and conditions of the Plan (including the Severance Release requirement under the Plan), you will receive the following Severance Benefits: 
1.Cash Severance Benefits.  
a.A cash payment in an aggregate amount equal to [CEO: two hundred percent (200%)] OR [EVP: one hundred and twenty-five percent (125%)] OR [SVP: fifty percent (50%)] of your Annual Base Salary, subject to normal withholdings; and

b.A cash payment in an aggregate amount equal to [CEO: two hundred percent (200%)] OR [EVP: one hundred and twenty-five percent (125%)] OR [SVP: fifty percent (50%)] of your Target Bonus, subject to normal withholdings.
c.The cash severance benefits set forth in B.1.a. and B.1.b. will be payable in installments on the Company’s normal payroll dates over a [CEO: twenty-four (24)] OR [EVP: fifteen (15)] OR [SVP: six (6)] month period.
2.COBRA Benefit.  If you and any Family Members have Qualifying Health Coverage (as defined in Section 4.1.2 of the Plan), COBRA Benefits will consist of a lump sum payment equal to [CEO: twenty-four (24)] OR [EVP: fifteen (15)] OR [SVP: six (6)] months of the premiums for medical, vision and dental coverage for Participant and Participant’s eligible dependents under COBRA.
3.No Equity Award Vesting Acceleration Benefit.  For the avoidance of doubt, you will not be entitled to any Equity Award vesting acceleration benefit under the Plan.
Severance Release Requirement.  In order to receive any Severance Benefits for which you otherwise become eligible under the Plan, you must sign and deliver to the Administrator the Severance Release, which must become effective and irrevocable within the requisite period set forth in the Severance Release and is subject to the Severance Release timing requirements specified in the Plan.  
Golden Parachute Tax Reduction. Also, as explained in the Plan, your Severance Benefits (if any) will be reduced if necessary to avoid the Severance Benefits from becoming subject to “golden parachute” excise taxes under the Internal Revenue Code.  
Please note that your Employer has the right to withhold from any Severance Benefits any applicable U.S. federal, state, local and non-U.S. taxes required to be withheld and any other required payroll deductions.
By your signature below, you and the Company agree that your participation in the Plan is governed by this Participation Agreement and the provisions of the Plan.  Your signature below confirms that: (1) you have received a copy of the Employers Holdings, Inc. Key Executive Change in Control and Severance Plan; (2) you have carefully read this Participation Agreement and the Plan, including, but not limited to, the terms and conditions for participation in, and receipt of any Severance Benefits under the Plan; and (3) the decisions and determinations by the Administrator under the Plan will be final and binding on you and your successors, and will be given the maximum possible deference permitted by law.

EMPLOYERS HOLDINGS, INC.            [NAME OF ELIGIBLE EMPLOYEE]

                                                    
Signature                        Signature
                                                    
Name                            Date
                    
Title

Attachment:    Employers Holdings, Inc. Key Executive Change in Control and Severance Plan

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