Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Alexander & Alexander 22 136K
2: EX-3.3 Articles of Incorporation/Organization or By-Laws 14 27K
3: EX-3.4 Articles of Incorporation/Organization or By-Laws 35 86K
5: EX-10.20 Material Contract 5 18K
6: EX-10.23 Material Contract 7 33K
7: EX-10.24 Material Contract 11 50K
8: EX-10.25 Material Contract 292 562K
9: EX-10.26 Material Contract 303 841K
4: EX-10.3 Material Contract 8 27K
10: EX-13.0 Annual or Quarterly Report to Security Holders 50 241K
11: EX-21 Subsidiaries of the Registrant 8 46K
12: EX-23.0 Consent of Experts or Counsel 1 8K
EX-10.24 — Material Contract
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EMPLOYMENT AGREEMENT
--------------------
AGREEMENT, dated as of October 25, 1993, between Alexander
-----------
& Alexander Services Inc., a Maryland corporation (the
"Company"), and Mr. Lawrence E. Burk ("Executive").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Executive has served the Company in several
capacities over a period of years, most recently as Global
Managing Director, Business Development;
WHEREAS, the Company believes that the services performed to
date by Executive have been of substantial value to the Company
and that Executive's continued service would be of great value to
the Company; and
WHEREAS, the Company desires to assure itself of Executive's
continued employment and Executive is willing to continue his
employment with the Company upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and of the mutual benefits herein provided, the
Company and Executive hereby agree as follows:
1. Term of Employment.
------------------
Except as provided in Section 8, the Company shall employ
Executive for the period commencing on October 1, 1993 (the
"Effective Date") and ending on August 31, 1996 ("Retirement
Date").
2. Duties.
------
During Executive's employment hereunder, Executive agrees to
serve as (i) Global Managing Director of the Company and (ii) to
perform such duties as may be assigned to him from time to time
by the Company which are consistent with Executive's skill,
position, training and ability. During his employment hereunder,
Executive shall devote his entire time, energy and skill during
regular business hours (other than during periods of illness,
vacation and other approved absences) to the affairs of the
Company and to the promotion of its interests.
3. Base Compensation.
-----------------
During the term of this Agreement, the Company shall pay
Executive a base salary at an annual rate of not less than
$308,350 in approximately equal installments payable semi-
monthly. The Company shall annually review Executive's base
salary and he shall be eligible for an increase in such then
existing base salary, contingent on his performance and the
Company's then existing merit increase guidelines applicable to
employees with responsibilities and skills similar to those of
Executive. During the term hereof, the Company shall not have
the ability to decrease the then existing base salary of
Executive without his consent.
4. Incentive Compensation.
----------------------
During the term of this Agreement, Executive will
participate in the Company's annual and long term incentive
compensation programs at a level commensurate with his position
at the Company and consistent with then current policies and
practices.
5. Restricted Stock.
----------------
In addition to any awards otherwise granted or to be granted
under the terms of the Company's 1988 Long Term Incentive Compen-
sation Plan or any successor plan thereto (the "Stock Plan"), but
subject to the execution of this Agreement, Executive has been
granted 15,000 shares of the Company's common stock which shall
be restricted as to transfer and subject to forfeiture (the
"Restricted Shares"). Such award of Restricted Shares shall be
subject to the general terms and conditions of the Stock Plan as
well as to those conditions contained in this Section 5. The
restrictions on the Restricted Shares shall lapse in accordance
with the following schedule, provided that Executive is still in
the Company's employ on the dates set forth below:
Anniversary of Number of
the Effective Date Shares Vested
------------------ -------------
Third 6,000
Fifth 9,000
Notwithstanding the foregoing, Executive's right to receive the
Restricted Shares shall automatically vest (i) if Executive is
-
still in the Company's employ on the date a Change of Control (as
defined in the Stock Plan) occurs or (ii) upon the termination of
--
Executive's employment (A) due to his death, Disability (as
-
defined in Section 9(c) hereof) or retirement with the Company's
consent, (B) by the Company other than for "Cause", as described
-
in Section 9(a) (ii) hereof, or (C) by Executive for "Good
-
Reason," as described in Section 9(a)(iv). If Executive's
employment terminates for any reason other than those stated in
subsection (ii) above at a time at which all or any portion of
--
the Restricted Shares are still subject to the restrictions
described hereunder, Executive shall forfeit all right, title and
interest to such Restricted Shares.
6. Supplemental Retirement Benefits.
--------------------------------
(a) Pre-55 Age and Service Supplement. If, prior to the
-----------------------------------
Retirement Date, Executive's employment is terminated (i) by
-
reason of his death, (ii) by the Company other than for Cause,
--
(iii) by the Executive for Good Reason or (iv) on account of
--- --
Executive's becoming disabled within the meaning of Section 9(c),
then the Company shall pay Executive (or his beneficiary, if
applicable) an additional retirement benefit in an amount equal
to the excess, if any, of (x) the benefit that would have been
-
payable to Executive (or his beneficiary, if applicable) under
the terms of the Company's Supplemental Executive Retirement Plan
for Senior Management (the "SERP") if Executive had remained in
the Company's employ until the Retirement Date and earned
compensation during such period of deemed employment at a rate
equal to the amount of his actual compensation in effect
immediately prior to such termination over (y) the actual benefit
-
payable to Executive (or his beneficiary, if applicable) under
the SERP. The Company shall have no obligation to Executive (or
his beneficiary) under this Section 6(a) if (i) the Company
-
terminates Executive's employment for Cause (as described in
Section 9(a)(ii)), (ii) Executive terminates his employment
--
hereunder for any reason except on account of Good Reason (as
described in Section 9(a)(iv) or (iii) Executive materially
---
breaches any of the covenants contained in Sections 10 through 15
hereof and fails to cure such breach within 10 days of receiving
written notice from the Company of the actions constituting such
breach.
(b) Special Spouse's Benefit. If Executive dies prior to
-------------------------
the Retirement Date while an employee of the Company or while
receiving severance benefits under Section 9(b)(i) or the special
disability benefit payable under Section 9(c), the Company shall
pay Executive's spouse a special spouse's benefit, commencing as
of the first day of the calendar month immediately following the
date of Executive's death, and continuing until the first day of
the month next following the Retirement Date in an amount equal
to the sum of (x) the benefits that would be payable to
-
Executive's spouse under the SERP and (y) the benefits, if any,
-
that would be payable to Executive's spouse under Section 6(a),
in each case determined as though Executive had lived until age
55, commenced payment of his benefits in the form of a 50% joint
and survivor annuity and died immediately thereafter.
(c) Manner of Payment. Except as provided in Section 6(b)
-----------------
above as to the time of payment of the special spouse's benefit,
the additional retirement benefits payable in accordance with
this Section shall be paid at the same time, in the same manner
and subject to the same terms and conditions as, benefits payable
to Executive under the SERP, except that in no event shall the
benefits be less than the actuarial equivalent of the benefit
payable thereunder at the age at which Executive elects to
3
commence receipt of his retirement benefits. Without limiting
the
generality of the foregoing, upon the occurrence of a Change of
Control of the Company, as defined in the SERP, the Company shall
contribute to a grantor trust an amount sufficient to fund, on a
present value basis, the Company's obligations, if any, to
Executive (or his spouse) under Sections 6(a) or 6(b).
(d) No Mitigation. Notwithstanding anything in this
--------------
Agreement or the SERP to the contrary, the benefits payable to
Executive under Section 6(a) shall not be reduced, offset or
otherwise altered by reason of Executive's employment with any
other employer during the period that such benefits are payable,
unless, in connection with such employment, Executive breaches
his covenants under this Agreement.
7. Benefits and Perquisites.
------------------------
Executive shall be entitled to participate in the employee
benefit plans, policies and programs which are available
generally to the Company's employees. Executive shall be
provided with perquisites in accordance with the Company's plans,
programs and policies generally applicable to senior officers.
8. Expenses.
--------
The Company agrees to reimburse Executive for expenses
properly incurred by him in the performance of his duties
hereunder in accordance with policies established from time to
time by the Company. Executive will provide the Company with
substantiation of such expenses in such manner as is reasonably
requested by the Company.
9. Termination of Employment and This Agreement.
--------------------------------------------
(a) Executive's employment hereunder shall cease and
terminate upon the earliest of the events specified below:
(i) The death of Executive.
(ii) Termination of Executive's employment for Cause,
limited to (A) a finding by the Board of Directors of the Company
-
that Executive has willfully and materially failed, refused or
neglected to perform and discharge his duties and
responsibilities hereunder for at least 10 business days after
written notice from the Company setting forth the actions or
omissions, as the case may be, which constitute such failure,
refusal or neglect, (B) a violation of any of the covenants set
-
forth in Sections 10 through 15 hereof, (C) a material breach of
-
Executive's fiduciary duties to the Company or any subsidiary or
affiliate which results in a material detriment to the Company,
(D) repeated material gross misconduct by Executive, (E)
- -
4
commission by Executive of an intentional tort against the
business and operations of the Company or any member of the same
controlled group of corporations (the "A&A Group") which
results in a material detriment to the Company or any member of
the A&A Group or (F) Executive's commission of an act
-
constituting a criminal act which the Board of Directors of the
Company determines in good faith will have a material adverse
impact on the business or reputation of the Company or any member
of the A&A Group if Executive remains in the Company's employ.
(iii) Termination of Executive's employment by the Company
other than for Cause pursuant to 90 days' written notice to
Executive.
(iv) Termination of Executive's employment by Executive for
Good Reason, limited to a termination occurring (A) within 90
-
days following a reduction in Executive's base salary payable
under Section 3, (B) within 90 days following a material breach
-
of this Agreement by the Company, (C) within 90 days following
-
the relocation of Executive's principal place of employment to
any location other than a principal city in North America, the
United Kingdom, or Western Europe or (D) within 36 months
-
following a Change of Control (as defined in the Stock Plan, as
in effect on the date hereof and expressly incorporated herein by
reference) which is a termination for Good Reason under the A&A
Services Senior Executive Severance Plan (the "Severance Plan").
Notwithstanding the foregoing, no termination by Executive shall
be treated as having been for Good Reason unless Executive shall
have given the Company at least 30 days prior written notice of
his intention to terminate his employment.
(b) Post-Termination Matters.
------------------------
(i) Severance Benefits. If Executive's employment is
-------------------
terminated by the Company pursuant to Section 9(a)(iii) or by
Executive pursuant to Section 9(a)(iv), Executive shall be
entitled to receive from the Company the amount payable to
Executive in accordance with the Severance Plan as in effect on
the Effective Date; provided, however, that if the amount payable
under the Severance Plan is increased at any time after the
Effective Date, Executive shall be entitled to receive such
greater amount. In addition, if Executive's employment is
terminated pursuant to either Section 9(a)(iii) or 9(a)(iv) prior
to the Retirement Date and Executive's Salary Continuation Period
under the Severance Plan expires prior to such time, the Company
shall continue to pay Executive additional severance payments in
accordance with Option A of the Severance Plan from the end of
the Salary Continuation Period until the first day of the
calendar month next following the Retirement Date; provided,
however, that the Company's obligation to make such additional
severance payments shall lapse in the event that Executive (x)
-
begins other employment (including self-employment), (y) breaches
-
5
any terms or conditions of the Severance Agreement (as defined in
the Severance Plan) or (z) breaches any of his obligations under
-
this Agreement. The amounts paid to Executive pursuant to this
Section shall be paid as liquidated
damages and shall be in lieu of all other amounts which may be
due to Executive as severance pay or otherwise as a result of the
termination of Executive's employment hereunder, except that
Executive's rights under Section 6 hereof and any benefit plan,
policy or arrangement providing benefits other than severance
shall be determined under the terms of such Section or such plan,
policy or arrangement.
(ii) Breach by Executive. Executive agrees that his failure
-------------------
to remain in the Company's employ in accordance with the terms of
this Agreement may result in disruption of the ongoing business
affairs of the Company. Executive therefore agrees that, in
addition to any other rights or remedies available to the
Company, if Executive terminates his employment hereunder other
than for Good Reason as described in 9(a)(iv) and obtains (or
intends to obtain) other employment, Executive shall not disclose
any information regarding such employment to any third party,
including, without limitation, any Client (as defined in Section
10 hereof), without the written consent of the Company for a
period of 90 days after giving the Company written notice of his
intent to terminate his employment with the Company.
Additionally, if the Company provides Executive with written
notice not later than two business days after the termination of
Executive's employment, Executive shall refrain from commencing
such other employment and shall refrain from publicizing his
obtaining of such other employment for the period of time
specified in such notice ("Notice Period"), which Notice Period
shall not exceed ninety (90) days from the date of such notice.
During the Notice Period, the Company shall continue
compensation, benefits and perquisites for Executive at the rate
and level in effect as of the termination of his employment and
shall not require Executive to perform any services on behalf of
the Company except to reasonably cooperate in any appropriate
announcement of Executive's termination of employment with the
Company.
(c) Disability. Except as otherwise provided in Section 6,
----------
in the event that Executive is unable to perform his duties
hereunder for a period of 180 consecutive days due to illness or
physical or mental disability, the Company shall be under no
further obligation to make payments to Executive under the terms
of this Agreement; provided, however, that Executive shall be
entitled to such benefits, if any, as are payable, and such
period of leave as is available, under the Company's general
employee benefit plans and policies. Notwithstanding the
foregoing, if Executive becomes disabled (as determined under the
preceding sentence) prior to the Retirement Date, the Company
shall pay Executive until the first day of the calendar month
6
next following the Retirement Date a special disability benefit
in monthly installments equal to the excess of (i) the monthly
-
amount of severance benefits that would have been payable to
Executive under Option A of the Severance Plan, were benefits
payable under that plan, over (ii) the monthly amount of any
--
other disability benefits payable to Executive under
a plan, program or arrangement, whether public or private,
maintained by the Company or to which the Company contributes;
provided, however, that, the Company's obligation to make such
special disability payments shall lapse in the event that
Executive (x) recommences active employment with the Company or
-
begins other employment (including self-employment ) or (y)
-
breaches any of his obligations under this Agreement.
10. Confidentiality and Non-Disclosure.
----------------------------------
It is understood that in the course of Executive's
employment with the Company, Executive has become and will
continue to become acquainted with Confidential Information (as
defined below). Executive recognizes that Confidential
Information has been developed by the members of the A&A Group at
great expense, is confidential and proprietary to the members of
the A&A Group, and is and shall remain the exclusive property of
the members of the A&A Group. Executive agrees that Executive
will not without the express, written consent of the Company
during the term of employment and for two (2) years after the
Termination Date, disclose, copy, make any use of, or remove from
the Company's premises Confidential Information (as defined
below), except as may be required in the course of Executive's
employment. "Confidential Information" shall mean the
confidential and proprietary information of any member of the A&A
Group relating to: (a) internal business and management
-
practices and procedures; (b) sources with which insurance is
-
placed; (c) Clients' policy expiration dates, policy terms,
-
conditions, and rates; (d) Clients' risk characteristics and
-
confidential information; (e) insurance markets and marketing for
-
Clients; (f) salary, bonus and other personal information
-
relating to employees of any member of the A&A Group; (g)
-
corporate financial and business information, strategies and
plans of the Company, any member of the A&A Group, or the A&A
Group as a whole; (h) corporate human resource information,
-
strategies and plans of the Company, any member of the A&A Group,
or the A&A Group as a whole; (i) decisions and deliberations of
-
committees or boards of any member of the A&A Group in which
Executive participates; or (j) litigation affecting any member(s)
-
of the A&A Group. As used in this section and in Section
9(b)(ii) above, "Client" shall mean those actual clients and
customers, and those active prospective clients or customers of
any member of the A&A Group which Executive alone, or in
combination with others, handled, serviced or solicited at any
time during the two year period immediately preceding the
Termination Date.
7
11. Recruitment of Employees.
------------------------
Executive recognizes that the employees of each member of
the A&A Group are a valuable resource of each such member.
Executive agrees that he shall not, for a period of two (2) years
following the Termination Date, either alone or in conjunction
with any other person or entity solicit, induce or recruit any
employee to leave the employ of any member of the A&A Group.
12. Right to New Ideas.
------------------
Any invention, improvement, innovation, new product,
process, or idea made or developed by Executive, alone or in
conjunction with others, during the course of Executive's
employment with the Company, relating to the business of any
member of the A&A Group, shall be deemed to have been made or
developed by Executive solely for the benefit of such member and
shall be the sole and exclusive property of such member.
Executive shall not, either during the course of Executive's
employment or after the Termination Date, use or disclose to any
third party such invention, improvement, innovation or new
product, process or idea, except as expressly authorized by the
Company in writing.
13. Return of Confidential Information.
----------------------------------
As of the Termination Date Executive shall promptly return
to the Company originals or copies of any and all materials,
documents, notes, manuals or lists containing or embodying
Confidential Information, or relating directly or indirectly to
the business of any member of the A&A Group, in the possession or
control of Executive.
14. Prior Covenants.
---------------
Executive agrees that the covenants contained in this
Agreement are in addition to and not in lieu of the covenants
previously entered into between Executive and members of the A&A
Group ("Prior Covenants"), which Prior Covenants are set forth in
Exhibit A attached hereto. Executive reaffirms the validity,
reasonableness and his willingness to be bound by the terms of
the Prior Covenants.
15. Disclosure of this Agreement.
----------------------------
As soon as reasonably possible prior to the commencement by
Executive of employment with any third party during the two (2)
year period following the Termination Date, Executive shall
promptly furnish such new employer with a copy of this Agreement.
16. Remedies with Respect to Covenants.
----------------------------------
8
(a) The parties recognize that irreparable injury will
result to the A&A Group, its business and its property in the
event of a breach by Executive of the covenants contained in
Section 9(b)(ii), and Sections 10 through 15 of this Agreement (a
"Breach"). It is agreed that in the event of any Breach, or
threatened Breach, the Company shall be entitled, in addition to
any other remedies and damages available, to an injunction to
restrain such Breach or threatened Breach. Executive agrees that
any member of the A&A
Group for which Executive performs services may enforce this
Agreement. Executive and the Company agree that all reasonable
expenses, including attorneys' fees, that are incurred by the
party that is successful in any action involving any such
covenant shall be borne by the losing party.
(b) If Executive shall have committed a Breach under
Section 10 or 11, and if the Company shall bring legal action for
injunctive or other relief, such relief shall have the duration
specified in such Section, commencing from the date such relief
is granted, but reduced by the period of time elapsed between the
Termination Date and such Breach.
17. Nature and Reformation of Covenants.
-----------------------------------
(a) Executive agrees and acknowledges that nothing
contained in this Agreement or the enforcement of any covenant
herein alters or shall alter Executive's ability to obtain a
livelihood for Executive or his family. Executive recognizes
that the covenants contained in this Agreement are reasonably
necessary to protect the Company's legitimate interest in the
customers and accounts Executive develops as an employee and to
protect Confidential Information. Executive further acknowledges
that the business of the Company and the A&A Group is not
confined to a specific geographical area, and that the absence of
a geographical limitation in Sections 10 and 11 hereof is, in
view of the nature of the business, reasonable.
(b) Executive agrees that the covenants contained in
Section 9(b)(ii) and Sections 10 through 15 are a substantial
part of the consideration being received by the Company in
respect of this Agreement, and are being made by Executive
expressly to induce the Company to enter into this Agreement.
Executive and the Company agree that if any provision of any such
covenant cannot be enforced as written, due to the length or
scope of the prohibitions contained therein or for any other
reason, a court or arbitrator having jurisdiction over this
Agreement shall reform any such unenforceable provision so that
it shall be enforceable in the manner which provides the Company
and each member of the A&A Group with the greatest level of
protection permissible at law.
18. Assignment.
----------
9
This Agreement shall not be assigned by either Executive or
the Company except that the Company shall have the right to
assign its rights hereunder to any direct or indirect parent or
subsidiary of the Company or to any successor in interest of the
Company whether by merger, consolidation, purchase of assets or
otherwise. The Company represents and warrants that it currently
has no intention to enter into any transaction which could result
in this Agreement being assigned.
19. Survival.
--------
The provisions of Section 6, Section 9(b), Section 9(c) and
Sections 10 through 17 shall survive the term of this Agreement
and shall continue in full force and effect in accordance with
their terms.
20. Notices.
-------
All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been
given if delivered by hand or mailed within the continental
United States by first-class, registered or certified mail,
return receipt requested, postage and registry fees prepaid and
addressed as follows:
(a) if to the Company:
Alexander & Alexander Services Inc.
1211 Avenue of the Americas
New York, NY 10036
Attn: General Counsel
(b) if to Executive:
Lawrence E. Burk
6 Seminole Way
Chatham, New Jersey 07928
Addresses may be changed by notice in writing signed by the
addressee.
21. Disputes.
--------
Any disputes arising under this Agreement (excepting
disputes relating to the covenants set forth in Sections 10, 11,
12, 13, 14 and/or 15) shall be resolved by binding arbitration
under the rules of the American Arbitration Association then in
effect in the State of New York, by an arbitrator acceptable to
both the Company and Executive. If the parties cannot agree on
an acceptable arbitrator, the dispute shall be heard by a panel
of three arbitrators, one appointed by each of the parties and
the third appointed by the other two arbitrators. Any such
10
arbitration shall be held in New York, New York, and the costs of
such arbitration shall be borne by the party who loses such
arbitration.
22. Miscellaneous.
-------------
(a) Entire Agreement. Except as otherwise expressly
-----------------
provided, this Agreement embodies the entire understanding
between Executive and the Company, except that nothing in this
Agreement shall be deemed to limit, restrict, constrain,
supersede or
otherwise impair the Company's rights and benefits under the
terms of the Prior Covenants or of any other agreement(s) between
the Company and Executive in effect on the date hereof regarding
confidentially, non-competition by Executive, non-solicitation or
any other matter discussed and described in Sections 10 through
17 hereof.
(b) Amendments. No amendment, change, alteration or other
----------
modification of this Agreement shall be made except in writing
signed by both parties hereto.
(c) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not be considered as part
of this Agreement nor limit or otherwise affect the meaning
hereof.
(d) Severability. In case any one or more of the
------------
provisions contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
(e) Governing Law. This Agreement shall in all respects be
-------------
governed and construed in accordance with the laws of the State
of Maryland.
(f) Withholding. Any payments provided for herein shall be
-----------
reduced by any amounts required to be withheld by the Company
from time to time under applicable Federal, State or local income
tax laws or similar statutes then in effect.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first above
written.
ALEXANDER & ALEXANDER SERVICES INC.
By:
-------------------------------
LAWRENCE E. BURK
-----------------------------------
12
Dates Referenced Herein and Documents Incorporated by Reference
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