UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________
FORM
8-K
_____________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): December 17, 2008
EMPLOYERS
HOLDINGS, INC.
(Exact
Name of Registrant as Specified in its Charter)
_____________________
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NEVADA
(State
or Other Jurisdiction of
Incorporation)
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001-33245
(Commission
File Number)
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04-3850065
(I.R.S.
Employer Identification No.)
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10375
Professional Circle
Reno,
Nevada
(Address
of Principal Executive Offices)
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89521
(Zip
Code)
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Registrant's
telephone number including area code: (888)
682-6671
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No
change since last report
(Former
Name or Address, if Changed Since Last
Report)
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_____________________
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section
5 – Corporate Governance and Management
On December 17, 2008, Employers Holdings, Inc. ("Employers Holdings")
entered into an employment agreement with each of the following four
executives: Douglas D. Dirks, Chief Executive Officer; Ann W. Nelson,
Executive Vice President, Corporate and Public Affairs; Lenard T. Ormsby,
Executive Vice President, Chief Legal Officer and General Counsel; and William
E. Yocke, Executive Vice President and Chief Financial Officer. On
December 17, 2008, Employers Insurance Company of Nevada ("Employers Insurance")
entered into an employment agreement with Martin J. Welch, President and Chief
Operating Officer.
These
executives were parties to employment agreements that needed to be amended no
later than December 31, 2008 to comply with deferred compensation legislation
under section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"). In addition, the existing employment agreements with Messrs.
Ormsby, Welch and Yocke and Ms. Nelson were scheduled to expire on December 31,
2008. In light of the requirement to amend the agreements with all of
the executives, and in the interests of keeping these agreements substantially
similar in form, either Employers Holdings or Employers Insurance, as
applicable, entered into new agreements with each of the
executives.
The
following description summarizes the employment agreements for these executives;
however, the summaries do not purport to be complete and are qualified in their
entirety by reference to the copies of the employment agreements, each of which
are attached hereto and incorporated by reference herein.
Employment Agreement with
Douglas D. Dirks
The term
of Mr. Dirks' employment agreement will commence on January 1, 2009 and will
continue for four years until December 31, 2012, thereafter to renew
automatically for successive two-year periods, unless either he or Employers
Holdings gives written notice to the other party no later than six months prior
to the expiration of the initial term or any successive term, as applicable, of
an intent not to renew the agreement or the agreement is terminated earlier in
accordance with its terms.
During
the term of his employment agreement, Mr. Dirks will receive an annual base
salary of not less than $675,000, subject to review and
adjustment. Mr. Dirks also will receive an annual incentive based on
his and Employers Holdings' performance, as determined in the sole discretion of
the board of directors of Employers Holdings (the "Board") or a committee
thereof, with a minimum target percentage of 70% of his annual base
salary. In addition, to the extent not duplicative of other benefits
provided by the employment agreement, Mr. Dirks will be entitled to (i) the
compensation and benefits that are provided generally to other senior officers
of Employers Holdings at a level determined in the sole discretion of the Board
or a committee thereof, (ii) all perquisites generally provided from time to
time to other similarly situated officers of Employers Holdings and (iii) an
automobile allowance of $1,300 per month, life
insurance
in an amount equal to three times Mr. Dirks' base salary and an annual executive
physical examination as part of Employers Holdings' executive wellness
program.
If,
during the term of his employment agreement, Mr. Dirks' employment is terminated
other than for (a) death, (b) disability or (c) by Employers Holdings for cause,
in each case, other than either during the 24-month period following a change in
control of Employers Holdings or during the six-month period prior to, but in
connection with, a change in control of Employers Holdings, then he will be
entitled to (i) severance payment equal to two times his base salary payable in
bi-weekly installments for 24 months and (ii) continued medical, dental and
vision insurance coverage for 18 months following the termination
date.
If,
during the term of his employment agreement, Mr. Dirks terminates his employment
for good reason or his employment is terminated for any reason other than (a)
death, (b) disability or (c) by Employers Holdings for cause, in each case,
either within 24 months following a change in control of Employers Holdings or
within six months prior to, but in connection with, a change in control of
Employers Holdings, then he will be entitled to receive (i) a lump sum cash
payment equal to three times the sum of (x) his base salary and (y) the average
of the annual bonus amounts he earned for the three years preceding the year in
which the change in control occurs or, if the termination date is before January
1, 2010, the average of the annual bonus amounts he earned in 2007 and 2008, and
(ii) continued medical, dental and vision insurance coverage for 18 months
following the termination date. In addition, if Mr. Dirks will be
subject to a golden parachute excise tax imposed under section 4999 of the Code,
then he will be entitled to payment in an amount that is necessary to place Mr.
Dirks in the same after-tax financial position that he would have been in if he
had not been subject to this excise tax (the "Gross-Up
Payment"). However, if payments and benefits to which Mr. Dirks is
entitled by reason of the change in control do not exceed 110% of the largest
amount that would result in no portion of these benefits and compensation being
subject to the excise tax, then Mr. Dirks will not be entitled to a Gross-Up
Payment, and instead his payments and benefits will be reduced so that he is not
subject to the excise tax.
In
exchange for the severance compensation and other benefits, if Mr. Dirks or
Employers Holdings terminates Mr. Dirks' employment for any reason other than
his death or disability (whether or not during the term of his employment), Mr.
Dirks will be subject to certain non-competition and non-solicitation
restrictions for 24 months after the termination date, in addition to other
restrictive covenants. Additionally, Mr. Dirks will be required to
sign a global release of liability. Moreover, if Mr. Dirks'
employment is terminated (a) during the term of his agreement by him for other
than good reason, death or disability, or (b) following the expiration of the
term (by either him or Employers Holdings) for any reason other than (i) by
Employers Holdings for cause or (ii) by reason of his death or disability, then
Mr. Dirks will be entitled to non-competition payments equal to two times his
base salary payable in bi-weekly installments for 24 months following his
termination of employment. If the non-competition provisions in his
employment agreement are nonenforceable, however, then Mr. Dirks will not be
entitled to any unpaid non-competition payments.
Employment Agreement with
Martin J. Welch
The term
of Mr. Welch's employment agreement will commence on January 1, 2009 and will
continue for three years until December 31, 2011, thereafter to renew
automatically for
successive
two-year periods, unless either he or Employers Insurance gives written notice
to the other party no later than six months prior to the expiration of the
initial term or any successive term, as applicable, of an intent not to renew
the agreement or the agreement is terminated earlier in accordance with its
terms.
During
the term of his employment agreement, Mr. Welch will receive an annual base
salary of not less than $420,000, subject to review and
adjustment. Mr. Welch also will receive an annual incentive based on
his and Employers Insurance's performance, as determined in the sole discretion
of the board of directors of Employers Insurance or a committee thereof, with a
minimum target percentage of not less than 70% of his annual base
salary. In addition, to the extent not duplicative of other benefits
provided by the employment agreement, Mr. Welch will be entitled to (i)
compensation and benefits that are provided generally to other senior officers
of Employers Insurance at a level determined in the sole discretion of the board
of directors of Employers Insurance or a committee thereof, (ii) all perquisites
generally provided from time to time to other similarly situated officers of
Employers Insurance and (iii) an automobile allowance of $1,200 per month, life
insurance in an amount equal to three times Mr. Welch's base salary and an
annual executive physical examination as part of Employers Insurance's executive
wellness program.
If,
during the term of his employment agreement, Mr. Welch terminates his employment
for good reason or his employment is terminated for other than (a) death, (b)
disability or (c) by Employers Insurance for cause, in each case, other than
either during the 18-month period following a change in control of Employers
Insurance or during the six-month period prior to, but in connection with, a
change in control of Employers Insurance, Mr. Welch will be entitled to (i)
severance payment equal to one times his base salary payable in bi-weekly
installments for 12 months and (ii) continued medical, dental and vision
insurance coverage for 12 months following the termination date.
If,
during the term of Mr. Welch's employment agreement, he terminates his
employment for good reason or his employment is terminated for any reason other
than (a) death, (b) disability or (c) by Employers Insurance for cause, in each
case, either within 18 months following a change in control of Employers
Insurance or within six months prior to, but in connection with, a change in
control of Employers Insurance, Mr. Welch will be entitled to receive (i) a lump
sum cash payment equal to two times the sum of (x) his base salary and (y) the
average of the annual bonus amounts earned by Mr. Welch for the three years
preceding the year in which the change in control occurs or, if the termination
is before January 1, 2010, the average of the annual bonus amounts earned by Mr.
Welch in 2007 and 2008, and (ii) continued medical, dental and vision insurance
coverage for 18 months following the date of termination. In
addition, if Mr. Welch will be subject to a golden parachute excise tax imposed
under section 4999 of the Code, then he will be entitled to a Gross-Up
Payment. However, if payments and benefits to which Mr.
Welch is entitled by reason of the change in control do not exceed 110% of the
largest amount that would result in no portion of these benefits and
compensation being subject to the excise tax,
then Mr.
Welch will not be entitled to a Gross-Up Payment, and instead his payments and
benefits will be reduced so that he is not subject to the excise
tax.
In
exchange for the severance compensation and other benefits, if Mr. Welch or
Employers Insurance terminates Mr. Welch's employment for any reason other than
his death or disability (whether or not during the term of his employment), Mr.
Welch will be subject to non-competition restrictions for 12 months and
non-solicitation restrictions for 18 months after the termination date in
addition to other restrictive covenants. Additionally, Mr. Welch will
be required to sign a global release of liability. Moreover, if Mr.
Welch's employment is terminated (a) during the term of his agreement by him for
other than good reason, death or disability or (b) following the expiration of
the term (by either him or Employers Insurance) for any reason other than (i) by
Employers Insurance for cause or (ii) by reason of his death or disability, then
Mr. Welch will be entitled to non-competition payments equal to two times his
base salary payable in bi-weekly installments for 12 months following his
termination of employment. Finally, if following the one-year
anniversary of the date of termination of Mr. Welch's employment, (x) Mr. Welch
continues to satisfy the restrictions in the non-competition covenant in his
employment agreement and (y) Mr. Welch's employment had been terminated whether
or not during the term for any reason other than by Employers Insurance for
cause, by reason of his death or disability or by him for good reason,
then: (A) if his termination had occurred during the term, he will
continue to receive the severance payments and health insurance medical benefits
described above generally starting from the one-year anniversary of his
termination of employment, and (B) if such termination occurred after the term,
Mr. Welch will continue to receive the non-competition payments and benefits
described above generally starting from the one-year anniversary of his
termination of employment, in either case, for the shorter of an additional six
months or until Mr. Welch engages in activities that no longer satisfy the
restrictions in the non-competition covenant. If the non-competition
provisions in his employment agreement are nonenforceable, however, then Mr.
Welch will not be entitled to any unpaid non-competition payments or
benefits.
Employment Agreements with
Lenard T. Ormsby, Ann W. Nelson and William E. Yocke
The term
of each of these employment agreements will commence on January 1, 2009 and will
continue for three years until December 31, 2011, thereafter to renew
automatically for successive two-year periods, unless either the executive or
Employers Holdings gives written notice to the other party no later than six
months prior to the expiration of the initial term or any successive term, as
applicable, of an intent not to renew the agreement or the agreement is
terminated earlier in accordance with its terms.
During
the terms of their employment agreements, each of Mr. Ormsby, Ms. Nelson and Mr.
Yocke will receive an annual base salary of $355,000, $235,000
and $365,000, respectively, subject to review and adjustment. The
executives will also be entitled to an annual incentive during the term of the
agreements, based on the executive's and Employers Holdings' performance, as
determined in the sole discretion of the Board or a committee
thereof. The amount of their minimum annual incentive target
percentage will be not less than the following percentages of the respective
executive's base salary: 45% for each of Ms. Nelson and Mr. Ormsby and 55% for
Mr. Yocke. Furthermore, to the extent not duplicative of the specific
benefits granted by his or her employment agreement, each executive will be
entitled
to (i)
the compensation and benefits provided generally to senior officers of Employers
Holdings at a level determined in the sole discretion of the Board or a
committee thereof, (ii) all perquisites provided to other similarly situated
officers of Employers Holdings and (iii) an automobile allowance of $1,200 per
month, life insurance in an amount equal to three times the executive's base
salary and an annual executive physical examination as part of Employers
Holdings' executive wellness program.
If,
during the term of his or her employment agreement, an executive terminates his
employment for good reason or his or her employment is terminated for any reason
other than (a) death, (b) disability or (c) by Employers Holdings for cause, in
each case, other than either during the 18-month period following a change in
control of Employers Holdings or during the six-month period prior to, but in
connection with, a change in control of Employers Holdings, the executive will
receive (i) severance payment equal to one and a half times his or her base
salary payable in bi-weekly installments for 18 months and (ii) continued
medical, dental and vision insurance coverage for 18 months following the
termination date.
If,
during the term of his or her employment agreement, an executive terminates his
or her employment for good reason or his or her employment is terminated for any
reason other than (a) death, (b) disability or (c) by Employers Holdings for
cause, in each case, either within 18 months following a change in control or
within six months prior to, but in connection with, a change in control, the
executive will receive (i) a lump sum cash payment equal to two times the sum of
(x) the executive's base salary and (y) the average of the annual bonus amounts
earned by the executive for the three years preceding the year in which the
change in control occurs or, if the termination date is before January 1, 2010,
the average of the annual bonus amounts earned by the executive in 2007 and
2008, and (ii) continued medical, dental and vision insurance coverage for 18
months following the termination date. In addition, if the executive
will be subject to a golden parachute excise tax imposed under section 4999 of
the Code, then the executive will be entitled to a Gross-Up
Payment. However, if payments and benefits to which the executive is
entitled by reason of the change in control do not exceed 110% of the largest
amount that would result in no portion of these benefits and compensation being
subject to the excise tax, then the executive will not be entitled to a Gross-Up
Payment, and instead the executive's payments and benefits will be reduced so
that the executive is not subject to the excise tax.
In
exchange for the severance compensation and the other benefits, if the executive
or Employers Holdings terminates the executive's employment for any reason other
than the executive's death or disability during the term of his or her
employment agreement, then the executive will be subject to certain
non-competition and non-solicitation restrictions for 18 months after the
termination date in addition to other restrictive
covenants. Additionally, the executive will be required to sign a
global release of liability.
Section
9 – Financial Statements and Exhibits
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
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10.1
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Employment
Agreement by and between Employers Holdings, Inc. and Douglas D. Dirks,
dated December 17, 2008 and effective as of January 1,
2009.
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10.2
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Employment
Agreement by and between Employers Holdings, Inc. and Ann W. Nelson, dated
December 17, 2008 and effective as of January 1,
2009.
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10.3
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Employment
Agreement by and between Employers Holdings, Inc. and Lenard T. Ormsby,
dated December 17, 2008 and effective as of January 1,
2009.
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10.4
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Employment
Agreement by and between Employers Insurance Company of Nevada and Martin
J. Welch, dated December 17, 2008 and effective as of January 1,
2009.
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10.5
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Employment
Agreement by and between Employers Holdings, Inc. and William E. Yocke,
dated December 17, 2008 and effective as of January 1,
2009.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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EMPLOYERS
HOLDINGS, INC.
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By:
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/s/
Lenard T. Ormsby
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Name:
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Lenard
T. Ormsby
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Title:
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Legal
Officer and General Counsel
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Dated: December
23, 2008
Exhibit
Index
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10.1
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Employment
Agreement by and between Employers Holdings, Inc. and Douglas D. Dirks,
dated December 17, 2008 and effective as of January 1,
2009.
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10.2
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Employment
Agreement by and between Employers Holdings, Inc. and Ann W. Nelson, dated
December 17, 2008 and effective as of January 1, 2009.
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10.3
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Employment
Agreement by and between Employers Holdings, Inc. and Lenard T. Ormsby,
dated December 17, 2008 and effective as of January 1,
2009.
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10.4
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Employment
Agreement by and between Employers Insurance Company of Nevada and Martin
J. Welch, dated December 17, 2008 and effective as of January 1,
2009.
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10.5
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Employment
Agreement by and between Employers Holdings, Inc. and William E. Yocke,
dated December 17, 2008 and effective as of January 1,
2009.
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