EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "AGREEMENT") dated as of
December 20, 1995, between Xxxxxxxx Xxxxxxxx ("EMPLOYEE") and Bradford
Insurance Centre, Ltd. (the "COMPANY"). It is the intention of the Company
and Employee that Employee remain an agent for the Company.
Accordingly, the parties agree as follows:
1. POSITION. Employee will serve as an agent for the Company and use
his best efforts to promote the Company's business. Employee's duties will
include those which are customary for his position, including duties which
from time to time may be specified by the Company's board of directors (the
"BOARD"). Employee's performance of his duties shall be subject to the
following provisions:
(a) Employee will act only in accordance with the terms of this
agreement, guidelines adopted by the Company, instructions given to
Employee by the Company, and the laws and regulations of the State of
Michigan.
(b) Employee's services will be limited to the lines of
insurance permitted by his license.
(c) Employee shall at all times maintain the qualifications
necessary for his licensing in the State of Michigan.
(d) Employee shall not act as an agent for the Company unless
his license is in good standing. If Employee's authority to act for
the Company is suspended or revoked, Employee shall not attempt to act
for the Company nor represent to any other person that he is
authorized to do so.
(e) Without limitation of the right of the Company to terminate
Employee's employment at anytime with or without cause, the Company
may immediately terminate Employee's employment should his license be
suspended or revoked by the Michigan Insurance Commissioner.
(f) Employee shall remit to the Company all funds received in
his capacity as an agent, and Employee shall refrain from rewarding or
otherwise compensating any person for procuring or endorsing business,
furnishing leads or prospects, or acting in any other manner as an
agent or solicitor as those terms are defined in the Michigan
Insurance Code.
2. COMPENSATION. Employee shall receive $60,000 per year as his
base salary. Employee shall receive a bonus in accordance with the terms
of Schedule 1 hereto. Fringe benefits provided in Company policies it from
time to time promulgates. Employee's salary may be adjusted on an annual
basis upon terms and conditions mutually agreed upon in writing.
3. TERM.
(a) Unless renewed by the mutual agreement of the Company and
Employee, the employment period shall end on the third anniversary
hereof; provided that (i) the employment period shall terminate prior
to such date upon Employee's death or permanent disability or
incapacity (as determined by the Board) in its good faith judgment)
and (ii) the employment period may be terminated by the Company at any
time prior to such date for Cause (as defined below). Provided that
this Agreement has not been terminated prior to the third anniversary
hereof, Employee shall be deemed to be hired "at will" at the end of
the employment period.
(b) All of Employee's rights to fringe benefits and bonuses
hereunder (if any) accruing after the termination of the employment
period shall cease upon such termination.
(c) For purposes of this Agreement, "Cause" shall mean (i) a
material breach of this Agreement by Employee, (ii) a breach of
Employee's duty of loyalty to the Company or any act of dishonesty or
fraud with respect to the Company, (iii) the commission by Employee of
a felony, a crime involving moral turpitude or other act causing
material harm to the Company's standing and reputation, (iv)
Employee's continued failure to perform Employee's duties to the
Company or (v) Employee's substandard performance. For the purposes
of this Agreement, "substandard performance" shall be determined by a
majority of the Board. The Board shall give Employee written notice
of the Board's concern over Employee's performance, and Employee shall
have 15 days to prepare for a meeting with the Board. In assessing
Employee's performance, the Board shall give due consideration to the
overall industry experience in assessing Employee's performance.
After due consideration of these factors, if a majority of the Board
determines in good faith that the Company would have performed
substantially better with another agent, the Board may terminate
Employee for "substandard performance."
4. NON-COMPETE, ETC. Employee will be bound by the following
restrictions:
(a) NON-COMPETE. Employee will not, during the term of his
employment with the Company and for two years thereafter (the
"Non-Compete Period"), within a twenty-five mile radius of the
Company's offices on the date hereof, serve as an insurance agent or
solicitor as defined in the Michigan Insurance Code (or other
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applicable law for market areas outside the State of Michigan), nor
serve as an employee, consultant, agent, officer, director, or
independent contractor with any firm or corporation in competition
with the Company. Employee and the Company agree that in view of all
the facts and circumstances this provision is reasonable in that it
will legitimately protect the goodwill and business prospects of the
Company, while permitting Employee to continue in the insurance
business at a location apart from the Company's market area. Employee
and the Company agree that the Company's market area is subject to
modification as the Company's business and affairs shall change following
execution of this agreement, except that no expansion of the Company's
market area occurring after Employee's termination of employment shall be
binding upon Employee. Nothing herein shall prohibit Executive from
being a passive owner of not more than 2% of the outstanding stock of
any class of a corporation which is publicly traded, so long as
Executive has no active participation in the business of such
corporation.
(b) CONFIDENTIAL INFORMATION. Employee will not disclose to
anyone any secret or confidential information of the Company,
including customer lists, renewal and expiration data, sales
information, customer files, and other confidential matters relating
to the business of the Company. This restriction will continue
indefinitely.
(c) NON-SOLICITATION; NON-DIVERSION. Employee will not, either
for himself or on behalf of anyone else, directly or indirectly,
divert or attempt to divert from the Company any business
opportunities within the insurance industry, nor interfere with the
contractual rights or expectancies that the Company has with any other
person, nor solicit any customers to which the Company is selling
insurance or providing other services at the time of Employee's
termination of employment. This restriction shall continue for a
period of five (5) years following Employee's termination of
employment. Business opportunities, contractual rights, and
contractual expectancies of the Company shall include those with
insurers, customers, employees, and other business associates.
(d) COMPANY'S MATERIALS. Employee will, upon leaving the
employment of the Company, deliver to the Company, and not keep or
deliver to anyone else, any and all materials relating to the
Company's business, including, but not limited to, customer lists,
renewal and expiration data, notes, memoranda, computer software or
programs, customer file information and documents.
(e) SPECIFIC ENFORCEMENT. The remedies of the Company upon
Employee's violation of the restrictions in this Section are as
follows: the Company may specifically enforce the restrictions in
this Section 4, including (without limitation) Employee's covenant not
to compete against the Company and the Company's remedies are
cumulative and shall include the remedy of damages.
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5. CONTRACTS; BUSINESS EFFORTS. Employee shall use his best
efforts to solicit contracts of insurance for the Company. Employee hereby
assign to the Company all rights to commission income and renewal and
expiration rights associated with any customers which Employee service or
procure during the term of this agreement. Employee will devote his full
business time and work to the business of the Company during the term of
his employment. Involvement in any other business activity (other than
passive investment) must be approved in advance and in writing by the
Board.
6. AUTHORITY. The Company grants Employee full power and authority
to receive and transmit proposals for contracts of insurance covering such
classes of risks as the Company may from time to time authorize to be
insured and which Employee may solicit under his license. Employee are
also authorized to collect, receive, and receipt for premiums on insurance
and other payments which are delivered to Employee as a representative of
the Company and to bind coverages on behalf of the Company's insurers to
the extent permitted by Company policy and by the Company's contracts with
its insurers. Employee have no authority to delegate to any other person
any of the authority granted under this agreement; however, the Company may
delegate to other persons the authority to perform certain duties which are
also within Employee's authority.
7. ARBITRATION. Except for disputes arising under Section 4 and the
exercise of the Company's remedies under Section 4, should any differences
arise between Employee and the Company in his employment, we agree to
submit our controversy to binding arbitration under the rules of the
American Arbitration Association then in effect, and judgment on the award
may be entered in any court of competent jurisdiction by either of the
parties. The parties may also agree, but shall not be compelled, to submit
controversies arising under Section 4, including exercise of the Company's
remedies under Section 4, to binding or nonbinding arbitration. The costs
of any arbitration (excluding attorney fees, fees for expert witnesses
retained by only one of us, and similar costs) will be shared by Employee
and the Company equally.
8. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties as to Employee's employment. All prior
discussions, compensation understandings, negotiations and agreements
notwithstanding, this Agreement constitutes the parties' sole source of
rights and duties with respect to Employee's employment. This Agreement
may not be changed orally, but only by agreement in writing expressly
identifying itself as an amendment to this Agreement and signed by Employee
and the Company.
9. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon Employee and the Company and their respective successors and assigns.
The rights and duties of Employee are personal to him and shall not be
subject to transfer, delegation, or assignment.
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10. SEVERABILITY. Any provision or term of this Agreement that shall
be found to be contrary to law or otherwise unenforceable, in whole or in
part, shall not affect the remaining terms of this Agreement, which shall
be continued as if the unenforceable provision were absent from this
Agreement.
11. GOVERNING LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
S/ XXXXXXXX XXXXXXXX
Xxxxxxxx Xxxxxxxx
"Employee"
BRADFORD INSURANCE CENTRE, LTD.
By S/ XXXXXX XXXXXXXX
Its President
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Schedule 1.1
to Employment Agreement
BONUS PLAN
Company bonus pool for the non-commissioned officers of the Company will be
maintained which will equal 6.25% of the aggregate salaries of the officers
participating in the program.
A personal performance bonus pool for non-commissioned officers of the
Company will be calculated as follows:
PERCENTAGE OF
RETURN ON SPARTA INVESTMENT* COMPANY NET INCOME
Less than 11.80% 0.00%
11.80%-12.45% 1.50%
12.45%-13.10% 3.00%
13.10%-13.70% 4.50%
13.70%-14.35% 6.00%
14.35% and Greater 9.00%
The Presidents of the Company and Sparta State Bank ("Sparta") will
determine the amount allocated to each officer in the bonus pool. In the
event of a disagreement between the Presidents, the determination of the
President of Sparta shall prevail.
*Return on Investment percentages will not be calculated with income or
expense which would be considered accounting adjustments, such as changing
the Company's accounting method from a cash basis to an accrual basis.
Definition:
The term "Investment" in the ratio of "Return on Investment" would consist
of those resources supplied by Sparta for acquisition or support operations
for which there is no expense incurred by the Company. For example: If
the Company borrows funds from Sparta or other sources and pays interest
out of its own budgeted funds, it will not be included as investment for
the bonus calculation. However, if Sparta advances funds to the subsidiary
in the form of stock or cash on which the Company does not pay interest, it
will be treated as additional investment. The current investment is
considered to be $780,000.
