CONSULTING AND NON-COMPETITION AGREEMENT
CONSULTING AND NON-COMPETITION AGREEMENT, dated this 24th day of May,
1999 (this "Agreement"), between MOBILE AMERICA CORPORATION, a Florida
corporation ("Company") and XXXXX X. XxXXXXXX ("XxXxxxxx").
W I T N E S S E T H :
WHEREAS, the Company is engaged, through its wholly owned subsidiaries,
in the underwriting and marketing of minimum requirement automobile insurance
and other insurance products and related businesses;
WHEREAS, effective as of the date of this Agreement (the "Resignation
Date") XxXxxxxx has retired from his officer and employee positions with the
Company and its subsidiaries and the Company has accepted such resignation;
WHEREAS, the Company desires to retain XxXxxxxx as a consultant on the
terms and conditions set forth in this Agreement in order (i) to provide for a
smooth transition in management and (ii) to continue to give the Company the
benefit of the invaluable contacts, experience and expertise acquired by
XxXxxxxx over his many years of service with the Company; and
WHEREAS, the Company desires to obtain, and XxXxxxxx desires to
provide, assurances that XxXxxxxx will (i) refrain from competing with the
Company for a specified period, (ii) not solicit agents, employees or customers
of the Company and (iii) not disclose confidential information concerning the
Company.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements contained herein and for other good and valuable consideration,
the Company and XxXxxxxx hereby agree as follows:
1. Retention as Consultant. XxXxxxxx shall be retained by the Company
as an independent contractor and consultant, and not as an employee, during the
period (the "Consulting Period") beginning on the Resignation Date and ending on
the first to occur of (i) the seventh anniversary of the Resignation Date (the
"Termination Date"); or (ii) the last day of the month in which XxXxxxxx'x death
occurs (the "Date of Death").
2. Consulting Services. During the Consulting Period, XxXxxxxx shall
personally provide the Company, at the request of the President or interim
President or the Board, consulting services consistent with his present skills,
training, job activities and stature with the Company. The services required
hereunder shall not require XxXxxxxx to maintain regular hours at Company
offices, shall be rendered at places and times reasonably acceptable to
XxXxxxxx, shall not require more than 500 hours per year and shall not conflict
with other entrepreneurial or business activities of interest to XxXxxxxx which
are not in violation of this Agreement. XxXxxxxx will be asked to provide
consulting advice to the Company on matters as to which his knowledge of and
experience with the Company and its business make him uniquely qualified to
render such advice, including reinsurance matters and such matters as assisting
with the transition of duties and providing background information to the
Company's new President and, introducing his successor to his various industry
contacts and financial analysts. XxXxxxxx shall perform such services as an
independent contractor and consultant and not as an employee and shall not have
authority to bind the Company for any purpose.
3. Compensation.
(a) During the Consulting Period, in exchange for the consulting
services provided by XxXxxxxx hereunder, and subject to paragraph 3(e) hereof
provided that XxXxxxxx is not in breach of the covenants set forth in Sections
5, 6, 7, 8 and 9 of this Agreement, the Company will pay XxXxxxxx a consulting
fee of $250,000 per year, payable in equal monthly installments in arrears .
(b) If the Consulting Period ends for reasons other than XxXxxxxx'x
death, after the end of the Consulting Period and during the remainder of the
Restrictive Period (as hereinafter defined), the Company will pay XxXxxxxx
$250,000 per year, payable in arrears in equal monthly installments, in exchange
for XxXxxxxx'x compliance with the covenants described in Sections 5, 6, 7, 8
and 9 of this Agreement.
(c) After the end of the Restrictive Period, if XxXxxxxx'x wife,
Xxxxxxxx XxXxxxxx, is then alive, the Company will pay to Xxxxxxxx XxXxxxxx a
benefit of $125,000 per year, payable in arrears in equal monthly installments,
continuing until the last day of the month in which her death occurs.
(d) During the Consulting Period, XxXxxxxx shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred by
him in the performance of his consulting services hereunder, consistent with the
Company's policies for the reimbursement of business expenses. For a period of
three years beginning on the Resignation Date, at XxXxxxxx'x election, the
Company shall either (i) provide XxXxxxxx with office space and part-time
secretarial assistance or (ii) pay XxXxxxxx $1,500 per month as an allowance for
such space and assistance.
(e) No payments shall be due and payable under this Section 3 in
the event that and for so long as XxXxxxxx is in breach of Section 5, 6, 7, 8 or
9 of this Agreement or the Shareholder Agreement of even date herewith between
the Company, XxXxxxxx and R. Xxx Xxxxx, after receipt of a written notice
thereof and a failure to cure within the later of 10 days of such notice or
resolution of any bona fide dispute with respect thereto.
4. Benefits.
(a) Director Benefits. During XxXxxxxx'x tenure as a director, the
Company will provide XxXxxxxx with the life insurance and medical insurance and
other fringe benefits as may be provided from time to time to the Company's
outside directors for so long as the Company provides such benefits to its
outside directors, but XxXxxxxx shall not be entitled to receive directors'
fees, Board or committee meeting fees or other compensation paid to or awarded
to outside directors.
(b) Employee Benefits. Effective on the Resignation Date, XxXxxxxx
shall no longer be eligible to participate in the Company's money purchase
pension plan or any other benefit plans and programs provided by the Company to
its employees. The Company acknowledges that XxXxxxxx has satisfied the minimum
hours of services requirements prior to the Resignation Date for participation
in the money purchase plan in 1999 and will not contest allocations to his
account thereunder.
(c) Health and Life Insurance at XxXxxxxx'x Cost. If XxXxxxxx
ceases to be a director of the Company, or if the Company ceases to provide its
directors with group health and life insurance:
(i) The Company will include XxXxxxxx and Xxxxxxxx XxXxxxxx in
its group health insurance plan for so long as either shall remain alive
provided that (A) they are not able to obtain supplemental Medicare
coverage comparable to the Company's group coverage, including cost and
terms of benefits, (B) Medicare is the primary coverage and the group plan
is secondary, and (C) XxXxxxxx (or Xxxxxxxx XxXxxxxx upon XxXxxxxx'x
death) reimburses the Company for the cost of so including XxXxxxxx and
Xxxxxxxx XxXxxxxx in the Company's group plan; and
(ii) The Company will include XxXxxxxx in its group life
insurance plan so long as XxXxxxxx remains alive provided that (A) such
Company plan, as then in effect, permits XxXxxxxx as a retired employee to
be included in the plan, and (B) XxXxxxxx reimburses the Company for the
cost of including him in such plan.
5. Covenant Not to Compete.
(a) Restriction. In consideration for the payments and benefits to
be provided to XxXxxxxx under Section 3(b), and to the fullest extent permitted
under applicable law, XxXxxxxx shall not, directly or indirectly engage in,
participate in, represent in any way or be connected with, as an officer,
director, partner, owner, employee, agent, independent contractor, consultant,
proprietor or stockholder (except for the ownership of a less than 5% stock
interest in a publicly traded corporation) or otherwise, any business or
activity, in any state in which the Company is then doing business, which
competes with the Business of the Company (as hereinafter defined).
(b) Restrictive Period. The provisions of Section 5 shall be in
effect for a period beginning on the Resignation Date and continuing until the
earlier of (i) the seventh anniversary of the Termination Date or (ii) the Date
of Death (the "Restrictive Period").
(c) Business of the Company. For purposes of this Agreement, the
"Business of the Company" shall mean any business line or activity that is
engaged in by the Company or any of its subsidiaries, or any assignee or
successor of the Company during the Restrictive Period.
6. Non-Solicitation of Agents, Employees and Representatives. In
consideration for the payments and benefits to be provided to XxXxxxxx under
Section 3(b), during the Restrictive Period, XxXxxxxx shall not, directly or
indirectly, for his own account or the account of any other person or entity
with which he shall become associated in any capacity or in which he shall have
any ownership interest, (a) without the prior written consent of the Company,
solicit for employment or employ or engage as an agent or representative any
person who, at any time during the preceding 12 months, is or was employed by or
otherwise engaged, as an employee, agent or representative of the Company to
perform services for the Company or any of its affiliates, regardless of whether
such employment or engagement is direct or through an entity with which such
person is employed or associated, or (b) otherwise intentionally interfere with
the relationship of the Company or any of its affiliates with any person or
entity who or which is at the time employed by or otherwise engaged to perform
services for the Company or any such affiliate, or (c) induce any employee,
agent or representative of the Company or any of its affiliates to engage in any
activity which XxXxxxxx is prohibited from engaging in under Sections 5,6, 7 and
8 hereof or to terminate his or her employment or engagement with the Company or
such affiliate.
7. Nonsolicitation of Customers. In consideration for the payments and
benefits to be provided to XxXxxxxx under Section 3(b), during the Restrictive
Period, XxXxxxxx shall not undertake any business with or solicit the business
of any person, firm or company who shall have been a customer of the Company and
with whom any executive of Company or his subordinates has dealt with during the
then immediately preceding twelve (12) months which might affect the Company's
business relationship with such customer (if the Company reasonably determines
that such activities will not adversely affect its business relationship with
its customer and such activities do not otherwise violate the covenants not to
compete contained herein, the Company shall provide XxXxxxxx its written consent
to such activities). During the Restrictive Period, XxXxxxxx shall not cause or
attempt to cause any customer to cease being a customer of the Company, or to
change its relationship with the Company in a manner which would adversely
affect the Company's business. For purposes hereof, "customer" includes any
contractor, supplier, licensee or other person with a business relationship with
the Company.
8. Unauthorized Disclosure. During and after the Restrictive Period,
without the written consent of the Company, (i) XxXxxxxx shall not disclose to
any person (other than an employee or director of the Company or its affiliates,
or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by XxXxxxxx of his duties under this Agreement
or as a director of the Company) or use to compete with the Company or any of
its affiliates any confidential or proprietary information, knowledge or data
that is not theretofore publicly known and in the public domain obtained by him
while in the employ of the Company or while acting as a consultant hereunder
with respect to the Company or any of its affiliates or with respect to any
products, improvements, customers, methods of distribution, sales, prices,
profits, costs, contracts (including, without limitation the terms and
provisions of this Agreement), suppliers, business prospects, business methods,
techniques, research, trade secrets or know-how of the Company or any of its
affiliates (collectively, "Proprietary Information"), and (ii) XxXxxxxx shall
use reasonable best efforts to keep confidential any such Proprietary Informa-
tion and to refrain from making any such disclosure, in each case except as may
be required by law or as may be required in connection with any judicial or
administrative proceedings or inquiry.
9. Compliance with Shareholder Agreement. XxXxxxxx hereby agrees to
comply with his obligations under the Shareholder Agreement of even date here-
with.
10. Injunctive Relief with Respect to Covenants. XxXxxxxx acknowledges
and agrees that the covenants and obligations of XxXxxxxx with respect to
non-competition, non-solicitation, confidentiality and non-disclosure with
respect to the Company and its affiliates relate to special, unique and
extraordinary matters and that, notwithstanding any other provision of this
Agreement to the contrary, a violation of any of the terms of such covenants and
obligations will cause the Company and its affiliates irreparable injury for
which adequate remedies are not available at law. Therefore, XxXxxxxx expressly
agrees that the Company and its affiliates (which shall be express third-party
beneficiaries of such covenants and obligations) shall be entitled to an
injunction (whether temporary or permanent), restraining order or such other
equitable relief (including the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain XxXxxxxx
from committing any violation of the covenants and obligations contained in
Sections 5, 6, 7, and 8 hereof. These injunctive remedies are cumulative and in
addition to any other rights and remedies the Company and its affiliates may
have at law or in equity.
11. Entire Agreement. Except as otherwise expressly provided herein,
this Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof, and all promises, representations, under-
standings, arrangements and prior agreements relating to such subject matter
(including those made to or with XxXxxxxx by any other person or entity) are
merged herein and superseded hereby and thereby.
12. Legal Expenses. The Company shall reimburse XxXxxxxx for the
reasonable attorneys' fees and expenses incurred by him in connection with the
negotiation and execution of this Agreement and the other agreements being
executed by XxXxxxxx contemporaneously herewith.
13. Miscellaneous.
(a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICT OF LAWS THEREUNDER. ANY AND ALL SUITS, LEGAL ACTIONS
OR PROCEEDINGS AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT SHALL BE
BROUGHT IN ANY STATE COURT OR UNITED STATES FEDERAL COURT SITTING IN XXXXX
COUNTY IN THE STATE OF FLORIDA, AS THE PARTY BRINGING SUCH SUIT MAY ELECT IN ITS
SOLE DISCRETION, AND EACH PARTY HEREBY SUBMITS TO AND ACCEPTS THE EXCLUSIVE
JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF SUCH SUIT, LEGAL ACTION OR
PROCEEDING. EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER PROCESS AND AGREES THAT SERVICE THEREOF MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, LEGAL
ACTION OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER WAIVES ANY CLAIM THAT
ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(b) Taxes. XxXxxxxx recognizes that the payments provided under
this Agreement including without limitation those provided pursuant to Section 3
may result in taxable income to him which the Company and its affiliates will
report to their appropriate taxing authorities. XxXxxxxx agrees to pay all
necessary and appropriate income and self-employment taxes on such income.
(c) Attorney's Fees. If any party to this Agreement breaches any
provision of this Agreement, then the breaching party shall pay to the non-
breaching party all of the non-breaching party's costs and expenses incurred by
that party in enforcing this Agreement, including reasonable attorneys' fees and
expenses, whether or not suit be brought and whether incurred before or at
trial, on appeal or on remand.
(d) Amendments. No provisions of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is approved
by the Company or a person authorized thereby and is agreed to in writing by
XxXxxxxx, and such officer of the Company as may be specifically designated by
the Company. No waiver by any party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No waiver of any provision of this Agreement shall be implied
from any course of dealing between or among the parties hereto or from any
failure by any party hereto to assert its rights hereunder on any occasion or
series of occasions. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
(e) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby. Should any
restrictive covenant in Sections 5, 6, 7 or 8 of this Agreement be determined by
a court of law or equity to be unreasonable or unenforceable, XxXxxxxx agrees
that to the extent it is valid and enforceable, XxXxxxxx shall be bound by the
same, the intention of the parties being that the Company be given the broadest
protection allowed by law or equity with respect to such provision.
(f) Notices. Any notice or other communication required or
permitted to be delivered under this Agreement shall be (i) in writing,
(ii) delivered personally, by nationally recognized overnight courier service or
by certified or registered mail, first-class postage prepaid and return receipt
requested, (iii) deemed to have been received on the date of delivery, and
(iv) addressed as follows (or to such other address as the party entitled to
notice shall hereafter designate in accordance with the terms hereof):
(i) if to Company, to:
Mobile America Corporation
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
(ii) if to XxXxxxxx, to:
Xxxxx X. XxXxxxxx
00000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Xxxxx Xxxxxx & Xxxxx Xxxxx X. XxXxxxxx, Esq.
P.O. Box 53315 00000 Xxxxxxxx Xxxx Xxxx
000 Xxxxx Xxxxxx, #0000 Xxxxxxxxxxxx, XX 00000
Xxxxxxxxxxxx, XX 00000 Telephone: (000) 000-0000
Attention: Xxxx X. Xxxxx, Xx., Esq. Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(g) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
(h) Headings. The section and other headings contained in this
Agreement are for the convenience of the parties only and are not intended to be
a part hereof or to affect the meaning or interpretation hereof.
(i) Assignment. This is a contract for personal services by
XxXxxxxx and may not be assigned by XxXxxxxx without the Company's prior written
consent except to a corporation or other entity controlled by him which assumes
his obligations hereunder and provided XxXxxxxx affirms that such assignment
does not release XxXxxxxx'x obligations hereunder. The Company shall have the
right to assign this Agreement, which shall inure to the benefit of the Company
and its successors and assigns.
IN WITNESS WHEREOF, the Company has duly executed this Agreement by its
authorized representative and XxXxxxxx has hereunto set his hand, in each case
effective as of the date first above written.
MOBILE AMERICA CORPORATION
By: /s/ R. Xxx Xxxxx
---------------------------------
Name: R. Xxx Xxxxx
Title: Director
/s/ Xxxxx X. XxXxxxxx
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XXXXX X. XxXXXXXX
