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Exhibit 10(ll)
INCENTIVE AGREEMENT
IN THE EVENT OF A SALE OF SOURCE ONE
The following will occur at the close of a sale of the company:
1. Sale Incentive: Each of the individuals listed on the enclosed schedule
shall be entitled to a special bonus in connection with the sale of the
company which will consist of two elements:
a. One third of all shares allocated under the LTIP in each earning
period (26,442.97 shares in the aggregate) will become fully earned
and vested to participants on the date of close, the value of which
will be determined by using the Market Price (as defined in the
Plan) of XXXX shares on the closing date of the sale;
b. Each listed individual will be entitled to a share (represented by
the pro rata factor) of the purchase price in excess of GAAP book.
The bonus amount payable to Messrs. Xxxxxxxx and Xxxxxxxx will be a minimum of
$356,092 and $360,616, respectively.
Payment of bonus amounts shall be made one year after the sale with interest
accruing from the date of sale at the "Daily Prime Rate," as defined in the
Company's Voluntary Deferred Compensation Plan. Notwithstanding the foregoing,
however, the payment described above for each individual will be reduced by the
smallest amount required so that no part of the payment is not deductible under
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), so
long as such reduction is less than the excise tax that would otherwise be
assessed under Section 4999 of the Code upon the payment of bonus amounts
absent such reduction.
The payout of the bonus is contingent upon continuation of the executive's
employment with Source One for a period of one year from the sale, unless
involuntarily terminated other than for "Cause" or as a result of "Constructive
Termination," both as defined under the LTIP, or in connection with a material
reduction in benefits as defined in Paragraph 2 below, in which case payment
will be made at time of termination.
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2. Current Benefits: Fund American will attempt to secure continuation of
benefits reasonably comparable to those currently in place for a period of
at least 36 months after the sale. Such programs include retirement
plans, ESOP, LTIP, EICP, deferred compensation plans, health and life
insurance, car leases and allowances, and club memberships. A material
reduction in these benefits would constitute "Constructive
Termination." In addition, Xxx Xxxxxx and Xxx Xxxxxxxx will be provided
supplemental retirement benefits that will permit each of them to begin
receiving retirement benefits (starting at the time of termination,
constructive or otherwise) as if they had reached age fifty-eight (for
purposes of eligibility for an early retirement benefit, determining
Benefit Service and the percentage reduction in benefits due to the start
of benefits before the normal retirement date) under the Company's
retirement plan and SERP and begin receiving post retirement medical
benefits coverage as if each had reached age fifty-five at the time of
termination, if his employment should be involuntarily terminated other
than for "Cause" or if "Constructive Termination" occurs, as defined above
and under the LTIP. Finally, Xxx Xxxxxx and Xxx Xxxxxxxx will be entitled
to any additional benefits available to terminated employees in such case.
3. Transaction Pool: A pool of $200,000 will be established by the Company
for possible distribution to certain employees, other than members of the
Management Committee, who deserve special consideration for making
the sale a success.
Date: 2-15-96 Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President and CEO
Source One Mortgage
Services Corporation
Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
Fund American Enterprises, Inc.
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SALE BONUS
BASE SHARES PRO RATA FACTOR
(%)
Xxxxxx 8,892.33 1.6814
Xxxxxxxx 6,351.67 1.2010
Xxxxxxxx 3,176.00 .6006
Xxxxxxxx 3,176.00 .6006
Xxxxxxx 333.33 .1890
Xxxxx 635.33 .0000
Xxxxxxxx 635.33 .1201
Xxxxxxx 635.33 .1201
Xxxxxxx 635.33 .1201
Xxxxxxx 333.33 .0630
Gillies 333.33 .0630
Xxxxxx 333.33 .0630
Xxxxxxxx 333.33 .0630
Xxxxxx 333.33 .0630
Xxxxxx 305.67 .0580
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26,442.97 5.1260
