EMPLOYMENT AGREEMENT
Xxxxxxx X. Xxxxx
AGREEMENT MADE AND ENTERED INTO this 14th day of May, 1998 by and
between THE XxXXXXX INSURANCE AGENCY, INC., a Massachusetts corporation having
its principal place of business in Lexington, Massachusetts (the "Employer"),
and XXXXXXX X. XXXXX of Medfield, Massachusetts ("Pucci").
WHEREAS, Pucci is licensed by the Commonwealth of Massachusetts
as an insurance broker for all lines of insurance, and
WHEREAS, the Employer conducts a general insurance agency and
brokerage business with its principal office in Lexington, Massachusetts, and
WHEREAS, contemporaneously with the execution of this Agreement,
pursuant to a written Purchase and Sale Agreement of even date herewith (the
"Purchase Agree-ment") between the Employer and The Xxxxxx Insurance Agency,
Inc., a Massachusetts corporation (the "Seller"), of which Pucci is a principal
stockholder and officer, the Employer has purchased certain of the assets (the
personal lines customer accounts) used by the Seller in the operation of its
insurance agency and brokerage business, and
WHEREAS, the Employer desires to secure the services of Pucci, and
Pucci desires to be so employed upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties agree and contract as follows:
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W I T N E S S E T H :
1. Employment.
1.1 During the term of this Agreement, the Employer does hereby
employ Pucci for the primary purposes of (a) managing the office and operations
of the Employer, (b) servicing and retaining the customers of the Seller who and
which are now customers of the Employer, and (c) producing and servicing new
personal lines insurance business. In addition to the foregoing duties, Pucci
may be assigned from time to time such additional duties and responsibilities,
provided that they shall be not inconsistent with his executive status and his
experience, skill and training and shall not materially detract from his primary
responsibilities as aforesaid. Pucci shall have the titles of President and
Chief Executive Officer of the Employer and shall be appointed as a member of
the Executive Committee of the Employer.
1.2 Additionally, Pucci shall be appointed as a Vice President of The
XxXxxxx Companies, Inc., being the parent entity of the Employer, and, as such,
shall be assigned duties and responsibilities only as shall be consistent and
compatible with his primary duties and responsibilities on behalf of the
Employer.
1.3 Pucci shall be assigned to the principal office of the Employer,
which currently is in Lexington, Massachusetts, but may be relocated to other
premises within the Greater Boston Area, which is the location from which he
shall carry out his duties hereunder; provided, however, prior to moving the
office of the principal office, the Employer shall discuss such relocation in
advance with Pucci and seek his input with respect thereto. At said office, the
Employer shall provide Pucci with all of the normal, usual, necessary and
appropriate office services, equipment and support personnel customarily
provided by an insurance agency so as to permit Pucci to carry out his duties
and responsibilities hereunder.
1.4 As President of the Employer, subject to guidelines and
directives of the Chairman of the Board of Directors and the Chief Operating
Officer of The XxXxxxx Companies, Inc. communicated to Pucci from time to time,
Pucci shall have the authority to (a) hire and fire employees, (b) make
necessary or appropriate expenditures on behalf of the Employer in accordance
with the operating budget established for the Employer, (c) enter into contracts
as authorized by the
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Board of Directors, and (d) take such actions on behalf of the Employer as may
be normal and customary in connection with the management of an insurance agency
office and his office as President and Chief Executive Officer of the Employer.
2. Acceptance of Employment.
2.1 Pucci hereby accepts such employment by the Employer upon the
terms and conditions herein contained. Pucci covenants and agrees that he shall
devote his best efforts in good faith to his employment hereunder except as
provided for in section 2.1 and shall devote his full and entire working time
and effort during the normal and customary work week to such employment
exclusively for and on behalf of the Employer; provided, however, nothing herein
shall be deemed to prohibit Pucci from pursuing passive investments, civic,
charitable, educational and other nonprofit activities, but only to the extent
such activities shall not materially detract from or interfere with Pucci's
duties and obligations hereunder as a full time employee. In all respects, Pucci
shall act and carry out his duties in accordance with the rules, regula-tions,
policies and office procedures promulgated by the Employer from time to time and
communicated to Pucci.
2.2 The Employer acknowledges that Pucci is and shall remain a
stock-holder, officer and director of the Seller and that he shall be entitled
to remain involved with the operation and management of such business but only
to the extent that it does not in any substantial manner detract from his
ability to carry out his duties and responsibilities hereunder.
3. Term.
3.1 Subject to the provisions for termination as provided in sections
3.2, 3.3, 4 and 5, the term of this Agreement shall be for a period commencing
on the Closing Date under the Purchase Agreement through May 31, 2003 (the
"Initial Term"). In the event Pucci shall remain in the employ of the Employer
after the Initial Term without the parties having executed a new employment
agreement or a written amend-ment to this Agreement, the employment shall be
deemed to continue thereafter "at will" pursuant to the terms and conditions
hereof, except that the employment of Pucci then shall be subject to termination
by either party without cause or reason at any time upon not less than 90 days'
advance written notice. In the event that, after the Initial Term hereof and
upon giving the foregoing notice, the Employer shall elect to terminate the
employment of Pucci without cause or
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Pucci shall elect to terminate his employ-ment, the Employer shall have the
right to require that Pucci immediately or at any time during said notice period
vacate the premises of the Employer, relinquish his authority to act on behalf
of the Employer, and resign as an officer and director; provided, how-ever,
during such notice period the Employer shall be required to pay to Pucci all
com-pensation otherwise due to him hereunder and to provide him with all
benefits to which he is entitled hereunder as an employee, all at such times as
they otherwise would be payable to or available to Pucci.
3.2 The provisions of section 3.1 notwithstanding, the Employer shall
have the right to terminate the employment of Pucci without cause during the
Initial Term; provided, however, to do so, the Employer shall (a) give Pucci not
less than 90 days' advance written notice and (b) shall pay to Pucci the full
salary and compensation and provide to Pucci all employee benefits to which he
otherwise would have been entitled during the 12 months immediately following
the effective date of termination of employment.
3.3 The provisions of section 3.1 notwithstanding, Pucci shall have
the right to terminate his employment at any time during the Initial Term upon
the giving of not less than 90 days' notice.
4. Involuntary Termination of Pucci.
The provisions of section 3 notwithstanding, the employment of Pucci
here-under shall terminate immediately upon (a) his death or (b) the
determination of his disability. For purposes of this Agreement, disability
shall mean the date Pucci is first entitled to receive benefits under the
Employer's long-term disability policy or, if Pucci fails or refuses to complete
necessary applications or other paperwork or to submit to medical or other
requisite examinations necessary to obtain such disability insurance benefits or
no such policy is in effect, at such date when Pucci shall have been unable to
perform a majority of his normal duties hereunder for medical reasons (whether
mental or physical and whether by reason of accident or illness) for a
consecutive period of 90 days or any collective period of 180 days in any
consecutive period of 365 days. In the event of termination on account of
disability, Pucci shall remain entitled to receive such disability income
insurance payments as otherwise would be payable to him pursuant to such
disability income insurance plan, if any, as may be in effect at the time of
such termination.
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5. Termination For Cause.
5.1 The Initial term and any subsequent term of this Agreement is
subject to the right of the Employer to terminate the employment of Pucci
without advance notice for good and sufficient cause, which shall be limited to
the following events:
5.1.1 Revocation or suspension of Pucci's license as an
insurance broker by the Commonwealth of Massachusetts.
5.1.2 Material breach by Pucci of the terms and
conditions of this Agreement.
5.1.3 The habitual (meaning more than twice) refusal
or failure by Pucci, after written warning to him from the Employer,
to act in accordance with operating rules and procedures adopted by
the Employer and communi-cated to Pucci.
5.1.4 The habitual (meaning more than twice) refusal or
failure of Pucci to maintain reasonable standards of performance
("Standards"), which Standards are reasonable, fair and
nondiscriminatory and are communicated to Pucci from time to time.
5.1.5 Commission of actions by Pucci which are abhorrent
to pre-vailing community standards or which a reasonable person would
consider materially and substantially damaging to the reputation of
Pucci or the Employer in the market area served by the Employer and
which have a material adverse affect upon the Employer.
5.1.6 Determination by the Employer, in the reasonable and
good faith exercise of its judgment, that Pucci has committed an
intentional tort (including, but not limited to, sexual harassment of
an employee) against the Employer or any employee of the Employer,
which action by Pucci has a material adverse effect upon the Employer
or other employees of the Employer.
5.1.7 Pucci shall have been engaged in the unlawful use
(including being under the influence) or in possession of illegal
drugs on the premises of the Employer.
5.2 In the event the Employer shall elect to terminate the employment
of Pucci for good and sufficient cause, it shall provide Pucci with written
notice of such termination, which notice shall specify each and every ground
upon which such termi-nation shall be based and shall be delivered in the manner
provided hereinafter for notice. Upon receipt of such notice, if termination
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shall be pursuant to section 5.1.1 or 5.1.2, Pucci shall have a reasonable
opportunity to cure such breach if the same shall be capable of cure, which
opportunity shall not exceed 30 days in the case of notice under section 5.1.1
or 10 days in the case of notice under section 5.1.2.
6. Publicity and Receipts.
All correspondence and all publicity and advertising shall be carried
on only in the name of the Employer or such trade name(s) as may be used by the
Employer. Except in the case of policies that are direct billed by the insurer
to the insured, all premiums shall be billed by, and shall be owed to, the
Employer, all checks and drafts in payment of such premiums shall be made
payable to the Employer, and all money received in payment of premiums shall be
turned over to the Employer in the form received. Any funds received by Pucci
from insureds in payment of direct xxxx pre-miums, if any, shall be turned over
to the Employer in the form received.
7. Writing, Servicing and Ownership of Insurance Business.
All personal lines insurance business of every name and nature
produced by Pucci during the continuation of Pucci's employment, including
renewals thereof, and all files and records with respect thereto shall be
written, renewed and serviced only through the facilities of the Employer. All
such business produced by Pucci may be coded or otherwise identified on the
Employer's books so as to indicate its source of production; provided, however,
notwithstanding such identification, all such business, including the expiration
data and all files and records in connection therewith, and all lists of
customers insured through the facilities of the Employer, including active leads
and/or prospects, shall be the exclusive property of the Employer and shall
continue to be so after the termination of employment of Pucci, however caused;
and Pucci hereby waives and releases all claims of right or ownership thereto
and covenants that, upon termination of his employment, he shall not retain
copies of such property.
8. The Employer's Right to Refuse Business and Excluded Business.
The Employer shall be free to decline to accept any insurance
business pro-duced by Pucci if, in the sole opinion of the Employer, such
business appears to be unprofitable or injurious to the reputation of the
Employer. Should the Employer reject any such business, Pucci shall not service
nor
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place such business elsewhere except with the prior written consent of the
Employer and in such manner as the Employer may direct.
9. Compensation.
9.1 As compensation for his services on behalf of the Employer, Pucci
shall be entitled to the compensation set forth in this section during the term
of his employ-ment, payable in accordance with such payroll and compensation
procedures and poli-cies of the Employer as shall be prevailing from time to
time and subject to all requisite payroll tax and withholding deductions.
9.2 Pucci shall be entitled to a base salary at the annual rate of
$180,000.
9.3 Pucci shall be entitled to an annual bonus that shall be
determined by the Employer in good faith based upon criteria established by the
Employer in consulta-tion with Pucci, which shall include, but not be limited
to, Pucci's performance, the growth of the Employer's business and the
profitability thereof; provided, however, in no event shall such bonus be less
than $20,000 per calendar year. Said bonus shall be payable on or before April
15th of each year provided the aforesaid criteria are met. Said bonus shall be
prorated for any year in which Pucci shall not have been employed hereunder for
the entire calendar year.
9.4 Reimbursement (or other appropriate provision) for ordinary and
reason-able expenses incurred by Pucci (other than for the use of his
automobile, which is pro-vided for hereinafter) in furtherance of, or in
connection with, his duties on behalf of the Employer hereunder, in accordance
with the standard reimbursement policy of the Employer or its Affiliates for
other employees of equal rank as Pucci as such policy may be in effect from time
to time.
9.5 Pucci shall be paid the sum of $500 per month as reimbursement
for the use of his automobile in furtherance of his duties hereunder and he
shall be respon-sible for all expenses of maintenance, operation, insurance and
ownership or lease of such vehicle.
9.6 Except as may be specifically provided for herein to the
contrary, Pucci shall be entitled to participation in such employee benefit
plans and arrangements that the Employer may have in effect from time to time,
all in accordance with such provi-sions for qualification therefor and
participation therein as shall apply to all employees of the Employer of equal
rank with Pucci;
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provided, however, nothing herein shall require or imply that the Employer
shall institute any employee benefits that are not now in effect or to maintain
in effect such benefits as are now in effect.
10. Pucci's Freedom to Contract.
Pucci hereby warrants and represents that he is not a party to any
agreement, whether written or oral, and that he is not subject to any court
order, judgment or decree that restricts or impairs his right to engage in any
aspect of the insurance busi-ness within the Commonwealth of Massachusetts or
elsewhere or that restricts or impairs his right and ability to solicit
insurance business from any person or entity in the Commonwealth of
Massachusetts or elsewhere or that restricts or impairs his right or ability to
carry out his other duties and responsibilities hereunder.
11. Protective and Restrictive Covenants of Pucci.
11.1 In recognition of the fact that the Employer is engaged in a
personal service business involving confidential information constituting trade
secrets and per-xxxxx relationships with insureds, the success of which business
is in large part due to the exclusive retention of such confidential information
and continuation of such personal relationships with insureds, Pucci does hereby
covenant and agree as follows and acknowledges that the following covenants were
agreed to by him as a condition precedent to his employment with the Employer
and that they are reasonably necessary for the protection of the Employer and
may be enforced to the extent set forth herein or such extent as any court of
competent jurisdiction may deem reasonable and proper. Pucci further
acknowledges that the following covenants do not prevent or impair the right of
Pucci to engage in the insurance business at any time following termination of
his employment in any geographic location, but, except as set forth in section
11.1.2, only impair, for a reasonable time, his ability to transact insurance
business for or on behalf of customers of the Employer and, as such, the
following covenants do not materially prevent or impair the right or ability of
Pucci to earn a living in the insurance business.
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11.1.1 Pucci agrees that all information relative to (a)
insurance pro-vided through the Employer for its customers, including
expiration data in con-nection therewith and all files and records
with respect to such information and all customer lists and (b) the
business plans, business operations and financial condition of the
Employer, is confidential information, constituting trade secrets,
and will be treated by him as such; and that both during and after
the term of Pucci's employment, however it may be terminated, he will
not, directly or indirectly, make use of such information or any
other confidential information concerning the Employer's business for
his own benefit or the benefit of anyone other than the Employer, nor
will Pucci divulge such informa-tion to anyone not duly entitled
thereto, nor will he retain copies of any of such confidential
information or reveal the same to anyone except to the extent
required by law and in the event such information shall be requested
pursuant to subpoena or otherwise required by law, Pucci shall notify
the Employer immediately of such request and shall cooperate with the
Employer in any effort to quash such subpoena or otherwise object to
such request in a lawful manner.
11.1.2 Except to the extent set forth herein to the
contrary, Pucci covenants and agrees that, during the term of his
employment with the Employer he will not, directly or indirectly,
compete with the Employer in any manner and, further, except as
provided hereinafter, during the Restricted Period (as defined
hereinafter) following termination of his employment, he will not,
directly or indirectly, on his own behalf or on behalf of anyone
else, solicit, attempt to obtain, accept, write or service insurance
business for any customer or account on the books of the Employer at
the time his employment shall terminate or within 12 months prior to
the date of such termination; nor, during said period, shall he act
or serve in any capacity as risk manager or insurance advisor or
insurance consultant to, or for, any of said customers; nor shall he
aid or assist anyone else in so acting or in any manner soliciting,
writing, placing or servicing such business for said customers; nor
shall he engage in the personal lines insurance agency or brokerage
business. It is understood that any leads and/or prospects on which
Pucci may be working, or from which Pucci shall have solicited
insurance business, during the 12 months immedi-ately preceding the
date of termination of
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employment shall be deemed to be customers of the Employer. The
"Restricted Period" shall be a period of 24 months following
termination of employment; provided, however, in no event shall the
Restricted Period be less than 60 months from the Accounting Date set
forth in the Purchase Agreement.
11.1.3 Pucci covenants and agrees that he will not, during
the term of his employment, nor during the Restricted Period
thereafter, however it may terminate, directly or indirectly, induce
any employee of the Employer or pro-ducer associated with the
Employer to leave the employ of, or association with, the Employer,
as the case may be; nor will he, for said period, directly or
indirectly, employ or become associated with any person who was an
employee of, or producer associated with, the Employer on the date of
termina-tion of his employment or within six months prior to such
date.
11.1.4 Pucci covenants and agrees that he will not, during
the term of his employment nor during the Restricted Period following
termination thereof, however it may terminate, take any action
reasonably intended to cause any customer of the Employer to cease to
transact its insurance business with the Employer or cause any
insurance company or other market to cease to transact insurance
business with the Employer or, in either case, to modify their
busi-ness relationship with the Employer in a manner materially
adverse to the Employer.
11.2 The Employer acknowledges that Pucci is and shall remain an
officer, director and stockholder of the Seller and that, following termination
of his employment hereunder, should Pucci return to full or part-time employment
with the Seller, such activity shall not be deemed in any manner a breach or
violation of the provisions of this section so long as during the Restricted
Period, on behalf of the Seller, Pucci does not solicit, sell or service
personal lines property and casualty insurance business. The Employer further
acknowledges that activities of Pucci with respect to the management and
administration of the Seller and the referral of commercial lines insurance
business to the Seller during the term of his employment hereunder shall not be
deemed a breach or violation of the provisions of this section 11.
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11.3 Pucci acknowledges that the damage which may be incurred by the
Employer by the diversion of its accounts in violation of the provisions of this
para-graph may be irreversible and that money damages for such breach may be
difficult to calculate. Accordingly, Pucci agrees that, in the event of a breach
or threatened breach by Pucci of the provisions of this section, any and/or all
of the provisions hereof may be enforced by a restraining order or injunction
restraining Pucci from the commis-sion of such breach to the full extent hereof,
or to such lesser extent as a court of competent jurisdiction may deem just and
proper for the reasonable protection of the rights and interests of the
Employer. Nothing herein contained shall be construed as prohibiting the
Employer from pursuing any other remedies available for such breach or
threatened breach, including the recovery of money damages which may include an
award of reasonable counsel fees and expenses. The covenants contained in this
sec-tion shall be construed as independent of any other provisions of this
Agreement, and the existence of any other claim or cause of action by Pucci
against the Employer shall not constitute a defense to the enforcement of the
within covenants.
12. Employer's Right of Offset.
Any sums that Pucci may owe to the Employer, whether as a result of
his employment hereunder or otherwise may be offset by the Employer against any
and all sums that the Employer may owe to Pucci hereunder; provided, however, in
order to exercise such right of offset, the Employer shall provide Pucci with a
written accounting supporting its claim that funds are due from Pucci to the
Employer and, further, such right of offset shall not relieve Pucci of any
liability or obligation to the Employer (except to the extent of amounts
actually offset by the Employer) but shall be only as a matter of convenience
for the Employer and Pucci.
13. Notices.
Any notice required hereunder shall be in writing and delivered in
any one of the following ways and shall be deemed to have been given (a) on the
date delivered if delivered in hand to Pucci or to Xxxx X. Xxxxxxxxxx on behalf
of the Employer, (b) the next following business day after being sent if sent by
Federal Express or other recog-nized overnight courier that requires signatures
of the recipient upon delivery, or (c) three business days after mailing, if
mailed, postage prepaid, by certified mail, return receipt requested, to the
party entitled to notice at the following addresses or at such other
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address as may be directed by notice given hereafter. A business day shall be
deemed any day on which the United States Postal Services shall make regular
mail delivered to the address to which the notice shall be directed:
If to the Employer: Xx. Xxxx X. Xxxxxxxxxx
The XxXxxxx Insurance Agency, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to Pucci: Xx. Xxxxxxx X. Xxxxx
00 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
14. Enforcement Costs.
The prevailing party in any legal proceedings commenced to enforce
this Agree-ment shall be entitled to an award of its costs including, but not
limited to, reasonable attorneys' fees in addition to such other damages, if
any, or other award as may be appropriate.
15. Rule of Construction.
The language used in this Agreement shall be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of
strict construction shall be applied against either party.
16. Amendments.
This Agreement may not be modified, revised, altered, added to, or
extended in any manner, or superseded except by an instrument in writing signed
by the parties hereto.
17. Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which, taken together, shall constitute
one and the same instrument representing the agreement of the parties hereto.
18. Nonwaiver.
The failure by either party to enforce any provision or provisions of
this Agree-ment shall not, in any way, be construed as a waiver of any such
provision or provi-sions nor prevent that party thereafter from enforcing each
and every provision of this Agreement.
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19. Enforceability.
The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects to as to permit the enforcement of each
provision to the full extent per-mitted by law.
20. Entire Agreement.
This Agreement contains the entire agreement between the parties
hereto and supersedes any and all prior agreements, arrangements or
understandings between the parties relating to the subject matter hereof. No
oral understandings, oral statements, oral promises or oral inducements exist.
No representations, warranties, covenants or conditions, express or implied,
whether by statute or otherwise, other than as set forth herein, have been made
by the parties hereto.
21. Binding Effect.
This Agreement shall be binding upon, and inure to the benefit of,
the parties and the successors and assigns of the Employer and the estate and
heirs of Pucci.
22. Governing Law.
This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts.
23. Section Headings.
The section headings used in this Agreement are for convenience only
and in no way alter, modify, amend, limit or restrict the obligations of the
parties.
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IN WITNESS WHEREOF, THE XxXXXXX INSURANCE AGENCY, INC. has caused
this instrument to be executed in its name and on its behalf by a duly
authorized officer thereof and XXXXXXX X. XXXXX has set his hand hereunto, each
on the date set forth following its or his signature effective as of the date
first above written.
THE XXXXXXX INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. XxXxxxx
------------------------
Xxxxxxx X. XxXxxxx
Date of Signature: May 14, 1998
/s/ Xxxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx
Date of Signature: May 14, 1998
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