Exhibit 10.1
UNDERTAKING AND AGREEMENT
Undertaking and Agreement made this 26th day of May, 1999, by and among
Motor Club of America, a New Jersey corporation having offices at ▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Motor Club"), North East Insurance Company, a
Maine corporation having offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual residing at ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, Motor Club and the Company have entered into an Agreement and
Plan of Merger dated the date hereof (the "Merger Agreement"), whereby a
to-be-formed wholly owned subsidiary of Motor Club will merge with and into the
Company, with the Company being the surviving corporation (the "Merger"); and
WHEREAS, Motor Club, the Company and ▇▇▇▇▇ desire to provide for and
facilitate the Merger, the election of ▇▇▇▇▇ as a director, President and Chief
Operating Officer of the Company as of the Effective Time of the Merger (as
defined in the Merger Agreement) and the revision of his employment arrangements
with the Company.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and other good and valuable consideration hereinafter set forth, the
parties hereto agree as follows:
1. It is Motor Club's position that, by virtue of paragraph 14 of the
Employment Agreement dated as of December 1, 1998, by and between
▇▇▇▇▇ and the Company (the "Employment Agreement"), the Employment
Agreement supersedes in its entirety the Employment Continuity
Agreement dated October 26, 1996 by and between ▇▇▇▇▇ and the
Company (the "ECA"), and it is Libby's position that the ECA
continues in full force and effect, and that paragraph 14 of the
Employment Agreement has no effect thereon.
2. As of the Effective Time of the Merger:
a. Motor Club shall grant options to ▇▇▇▇▇, in accordance with
Section 2.02 (a)(i) of the Merger Agreement;
▇. ▇▇▇▇▇ shall be elected as a director, President and Chief
Operating Officer of the Company;
c. Paragraph 3 of the Employment Agreement shall be deleted and
the following inserted in its stead:
"For his services hereunder the Company shall pay the
Executive a base salary of One Hundred Thirty-Five Thousand
Dollars ($135,000) per annum (the "Base Salary")"
3. In the event ▇▇▇▇▇ seeks to assert any claim of right or rights
under the ECA (a "Claim"), he shall do soonly in writing. If within
30 days of the Company's receipt thereof, the Company and ▇▇▇▇▇ do
not resolve the Claim to their mutual satisfaction, then the parties
shall resolve the Claim through binding arbitration proceedings in
accordance with the procedures for commercial arbitration of the
American Arbitration Association. The decision rendered in
accordance with this paragraph shall be final and may not be
appealed to any court of law or equity.
4. If an event giving rise to a Claim would also entitle ▇▇▇▇▇ to
payment under the Employment Agreement (such event to be known as a
"Double Claim Event"), and pursuant to paragraph 3 hereof it is
determined that such Claim is enforceable under the ECA, then the
aggregate of all payments made to ▇▇▇▇▇ by the Company for such
Double Claim Event shall not exceed the amount to which ▇▇▇▇▇ is
determined to be entitled for said Double Claim Event under the ECA.
5. Subject to paragraph 1 hereof, after the Effective Time of the
Merger:
a. Paragraph 5 of the ECA shall no longer be in effect;
b. Paragraph 7 of the ECA shall be amended by changing the notice
address of the Company for the purposes of the ECA to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board
North East Insurance Company
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇;
c. The Merger is acknowledged to be a "Change in Control Event"
as defined in Paragraph 2 of the ECA.
IN WITNESS WHEREOF, the parties have executed this Undertaking and
Agreement on the day and year first above written.
North East Insurance Company Motor Club of America
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇