WASHINGTON -- Alexander & Alexander Services Inc. President and Chairman Frank Zarb will leave the company after it merges with Aon Corp., taking at least $12 million in cash as part of his severance.
The company disclosed in a filing with the Securities and Exchange Commission that "the employment of Frank Zarb with the surviving corporation shall be terminated without cause" after the merger.
Aon announced last week that it would purchase Alexander & Alexander for $1.23 billion, creating one of the nation's largest insurance brokerage companies. Although Alexander & Alexander is headquartered in New York, most of its administrative personnel are based in Owings Mills and it has a large office in Baltimore. It employs about 670 people in metropolitan Baltimore.
Terms of Zarb's employment agreement say he is entitled to $12 million in cash if terminated following a change in control of Alexander & Alexander. However, the cash payout doesn't include the value of options and restricted stock that the executive will receive as part of the severance package. separate provision of the employment agreement notes that a termination of Zarb under circumstances other than a change of control would give him a total severance package worth as much as $20 million.
Alexander & Alexander Treasurer Alan Kershaw confirmed that Zarb would be leaving the company and receiving at least the minimum $12 million on departure.
Aon began its $17.50-a-share tender offer for Alexander & Alexander stock yesterday.
Pub Date: 12/18/96