EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into this
31st day of July, 1997 by and between First Commonwealth
Corporation, a Virginia Corporation (the "Company") and Xxxxx X.
Xxxxxxxx ("Executive").
WITNESSETH:
WHEREAS, the Company is engaged in the business of selling and
administering insurance; and
WHEREAS, the Executive is experienced in the management and
operations of insurance business; and
WHEREAS, the Company desires to employ the Executive in the
capacity, and on the terms as set forth herein, and the Executive
desires to be employed by the Company in such position and on the
terms and subject to the conditions herein contained; and
WHEREAS, the parties hereby acknowledge that notwithstanding any
other communication whether written or oral, this Employment Agreement
is intended to set forth the complete understanding of the parties
with respect to the employment of the Executive by the Company as of and
from the date hereof.
NOW, THEREFORE, in consideration of these premises and the
respective covenants and agreements hereinafter set forth, the
parties hereby agree as follows:
1. EMPLOYMENT AND DUTIES OF THE EXECUTIVE. The Company
hereby employs the Executive and the Executive accepts employment
as Senior Executive Vice President/Chief Financial Officer of the
Company. In addition to his duties as Senior Executive Vice
President/Chief Financial Officer, the Executive agrees to perform such
duties as from time to time may be assigned by the Board of Directors
of the Company (the "Board"). In the performance of such duties, the
executive will at all times serve the Company faithfully and to
the best of his ability under the direction and control of the Board.
If the Executive is elected or appointed to additional or substitute
offices or positions with the Company or any of its subsidiaries or
affiliates, he agrees to accept and serve in that position. The
parties acknowledge that as of the current date, such duties
require the Executive to work approximately 25 hours per week.
The Executive agrees that he will make himself available to work full
time with the understanding that such increase in time spent will be
considered by the Board in determining his annual bonus, if any.
2. TERM. The term of employment under this Employment
Agreement will be for a period of sixty (60) consecutive months from
the date hereof, unless sooner terminated as hereinafter provided.
3. COMPENSATION. So long as the Executive is employed by
the Company pursuant to this Employment Agreement, the Executive will
be entitled to the following compensation and fringe benefits:
3.1. SALARY. For all services rendered by the Executive
pursuant to this Employment Agreement, the Company will pay to the
Executive, an annual salary of $238,200, less any
compensation received by reason of Executive's participation as
a director of the Company or any of its subsidiaries or
affiliates. Such salary will be payable in equal bi-monthly
installments or at such other frequency as will be consistent with
the Company's normal payroll practices with other employees
in effect from time to time. Payments of salary will be
subject to normal employee withholding and other tax deductions.
The parties acknowledge that the annual salary is a base salary
and annual consideration shall be given to granting Executive
a bonus based on factors such as: inflation, increase in the
scope of duties and extraordinary achievements.
3.2. FRINGE BENEFITS. The Executive will be entitled to
participate in the fringe benefit programs of the Company, in
existence from time to time (including any pension plan, bonus
program, group life and medical insurance programs and medical
expense reimbursement plans), as determined by the Board, and as
are made available to employees of like status to the
Executive on a comparable basis, and according to the rules and
regulations of such programs adopted by the Company from time to
time. Executive will be granted eight weeks vacation each year.
3.3. EXPENSES. Upon presentation of supporting
documentation as may reasonably be satisfactory to the
Company, the Company will pay or reimburse the Executive for all
reasonable travel, entertainment, and other business expenses
actually incurred by the Executive during the term of this
Employment Agreement in the performance of his services and
duties; provided, however, that the type and amount of expenses
will be consistent with expense reimbursement policies
adopted from time to time, formally or informally by the Company.
Any expense beyond such authorization must be specifically
authorized in advance by the president. In the event of a
dispute between the Company and the Executive as to the nature of
such expenses, the decision of the president will be binding. If
an income tax deduction (Federal, state or local) is disallowed
to the Company for any part of such expense payments, the
Executive agrees to repay the Company the amount of the expense
reimbursement to the Executive paid by the Company upon demand by
the Company.
3.4. PURCHASE OF UNITED TRUST GROUP NOTE. The Company or
one of its affiliates will on August 1, 1997 purchase the
$116,344.90 note of United Trust Group held by Melville for its
then current principal balance plus accrued interest.
4. TERMINATION. The Executive's employment with the Company
may be terminated and this Employment Agreement canceled upon the
following terms and conditions.
4.1. TERMINATION FOR CAUSE. During the terms of this
Employment Agreement, the Executive's employment may be
terminated immediately, with or without written or oral
notice, by the Company for "Cause" (as hereinafter defined). If
the Executive's employment with the Company is terminated for
"Cause" all compensation described in paragraphs 3.1 through
3.3 of this Employment Agreement will terminate as of the date of
such termination of employment. Termination for "Cause" is
limited to the following grounds: (i) misappropriation of
funds, embezzlement, or willful and material damage of or to any
material property of the Company, or defrauding or attempting to
defraud the Company; (ii) conviction of any crime (whether or
not involving the Company) which constitutes a felony in the
jurisdiction involved; (iii) malfeasance or non-feasance in the
performance by the Executive of his duties hereunder; (iv) failure
or refusal by the Executive to perform his duties in the best
interests of the Company and in accordance with the directions
given by the Board, the chairman of the board or the president
of the Company; or (v) a material breach by the Executive, in
the sole opinion of the Company, or any of the provisions of this
Employment Agreement; which breach continues after notice of the
breach, either oral or written, from the Company to the
Executive. Upon termination of the Executive for "Cause", the
Company will pay the Executive's salary and other benefits,
including reimburse the Executive for authorized expenses
incurred, through the date of termination of the Executive's
employment. The Executive acknowledges and agrees that the
foregoing will be the Company's only obligations and total
liability to the Executive for termination of the Executive's
employment for "Cause".
4.2. TERMINATION WITHOUT CAUSE. The Company may
terminate the Executive without cause at any time by providing the
Executive thirty (30) days prior written notice of
termination. Upon termination without cause, the Company will
continue to pay the Executive compensation in the amount equal to
the Executive's then salary for the remainder of the term of this
Employment Agreement as if Executive had not been terminated,
plus any bonuses which the Executive would have been entitled to
had the Executive not been terminated, and reimburse the
Executive for authorized expenses incurred through the date of
termination of the Executive's employment. The Company will also, if
required by law, allow the Executive to continue any medical and
hospitalization plan and/or insurance at the Executive's sole
cost and responsibility. The Executive acknowledges and agrees
that the foregoing will be the Company's only obligations and total
liability to the Executive for termination of the Executive's
employment without cause.
4.3. VOLUNTARY RESIGNATION. The Executive may
voluntarily resign prior to the expiration of this Employment
Agreement, upon providing the Company with at least fifteen (15)
days' prior written notice. Upon the effective date of the
Executive's resignation, the Company will pay the Executive's
salary and other benefits, including reimbursement for authorized
expenses incurred, through the effective date of the Executive's
resignation. The Company will also, if required by law, allow
the Executive to continue any medical and hospitalization plans
and/or insurance at the Executive's sole cost and responsibility.
The Executive acknowledges and agrees that the foregoing will
be the Company's only obligations and total liability to the
Executive for termination of the Executive's employment due
to the Executive's voluntary resignation.
4.4. TERMINATION UPON DEATH. The Executive's employment
will be terminated automatically upon the Executive's death. As
the result of the Executive's death, the Company will pay to the
Executive's estate a death benefit equal to the Executive's
salary through the end of the month in which the Executive's
death occurs, plus reimbursement for authorized expenses incurred
by the Executive prior to his death. The Executive acknowledges and
agrees that the foregoing will be the Company's only obligations
and total liability to the Executive for termination of the
Executive's employment due to the Executive's death.
4.5. TERMINATION UPON DISABILITY. The Company may, upon 30
days prior written notice to the Executive, terminate the
Executive's employment effective as of the date specified in the
notice, if, due to any medical or psychological disability the
Executive is not able to perform his customary services and
duties for 30 continuous business days or 45 noncontinuous
business days within a 90-day period (the "Disability
Period"). The Company may retain a physician of its choice to
examine the Executive and to render a medical opinion to the
Company as to the Executive's medical or psychological
disability. The Executive consents to examination by such
physician, and further agrees that the opinion of such
physician will be binding upon both the Executive and the
Company. Upon termination of the Executive's employment due to
disability, the Company will pay to the Executive an amount
equivalent to three months salary as termination compensation, and
if required by law, allow the Executive to continue any medical
or hospitalization plan and/or insurance at the Executive's
sole cost and responsibility. The Executive will receive full
compensation for any period of temporary illness or
disability. The Executive acknowledges and agrees that the
foregoing will be the Company's only obligations and total
liability to the Executive for termination of the Executive's
employment due to disability.
4.6. RETURN OF MATERIALS. Upon the termination of the
Executive's employment, irrespective of the time, manner or
reason of termination, the Executive will immediately
surrender and deliver to the Company all originals and all
copies of reproductions of books, records, summaries, lists,
computer software, and other tangible data and information, and
every form and every kind, relating to the Confidential
Information (as defined in Section 5 of this Employment
Agreement) and all other property belonging to the Company. The
prior and full performance by the Executive of the provisions
of this Section 4.6 is a condition to the payment by the Company
to the Executive of any compensation set forth in this Employment
Agreement.
5. NON-DISCLOSURE OF CONFIDENTIAL AND PROPRIETARY
INFORMATION. The Executive may not during the term of his
employment with the Company or any time thereafter, directly or
indirectly, copy, use, or disclose to any person or business any
"Confidential Information" (as defined below) except for the
benefit of the Company in connection with the performance of his
duties and in accordance with any guidelines or policies which
might be adopted from time to time by the Company. In addition, the
Executive will use his best efforts to cause all persons over whom he
has supervisory control to use, maintain and protect all "Confidential
Information" in a confidential manner and as a valuable asset of
the Company. As used in this Employment Agreement, "Confidential
Information" means trade secrets and other proprietary information and
data concerning the business of the Company, its subsidiaries and
affiliates (the "FCC Companies"), regardless of whether protectable
by law, including, but not limited to, information concerning the
names and addresses of any of the FCC Companies' policyholders and
prospective policyholders, any of the FCC Companies' operation manuals,
accounts, the names of employees and agents and their respective
duties, the names of reinsurance providers, financial data, pricing
lists and policies, profits or losses, product or service development
and all such similar information, all of which would not readily be
available to the Executive except for the Executive's employment
relationship with the Company. The Executive acknowledges that such
information and similar data is not generally known to the trade, is
of a confidential nature, is an asset of the Company, and to
preserve the Company's good will, must be kept strictly confidential
and used only in the conduct of its business. The provisions of this
Section will survive the termination of this Employment Agreement for
any reason.
6. INTERFERENCE WITH EXTERNAL BUSINESS RELATIONSHIPS. The
Executive agrees that, as a result of the Confidential Information, he
will receive, come in contact with, create, or have access to during
the term of his employment with the Company, and the Company's
customer relationships he will be exposed to, the Executive will
not, directly or indirectly (through any corporation which he is a
director, officer, consultant, agent or other relationship) during
the term of his employment service, perform or otherwise manage
insurance companies or insurance related businesses.
7. INTERFERENCE WITH INTERNAL BUSINESS RELATIONSHIPS. The
Executive agrees that, as a result of the Confidential Information he
will receive, come into contact with, create or have access to during
the term of his employment with the Company, and the Company's
employee and independent contractor relationships he will be exposed
to, the Executive will not, directly or indirectly (through any
corporation in which he is a director, officer, consultant, agent,
or other relationship), during the term of his employment interfere
with the Company's relationship with, or endeavor to entice away
from the Company or any of the FCC Companies or, directly or
indirectly, contact any person, firm or entity employed by, retained
by or associated with the Company or any of the FCC Companies, to
induce any such person, firm or entity, to leave the service of the
Company or any of the FCC Companies and provide the same or
substantially the same work as performed for the Company or any of
the FCC Companies to the Executive or to any other person, firm, or
entity.
8. INJUNCTIVE RELIEF. The Executive consents and agrees that
if he violates any of the provisions of Section 5 through 7 hereof,
the Company would sustain irreparable harm and, therefore in addition
to any other remedy at law or in equity the Company may have under this
Employment Agreement, the Company will be entitled to apply to any
court of competent jurisdiction for an injunction restraining the
Executive from committing or continuing any such violation of any
provisions of Section 5 through 7 of this Employment Agreement.
9. MISCELLANEOUS.
9.1 NOTICES. All notices and other communications
required or desire to be given to or in connection with this
Employment Agreement will be in writing and will be deemed
effectively given upon personal delivery three days after
deposit in the United States mail sent by certified mail,
return receipt requested, postage prepaid, or one day after
delivery to an overnight delivery service which retains
records of deliveries, to the parties at the addresses set
forth below or such other address as either party may
designate in like manner.
A. If to the Company:
First Commonwealth Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
B. If to the Executive:
Xx. Xxxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
9.2 GOVERNING LAW. This Employment Agreement will be
governed and construed in accordance with the laws of the
State of Illinois.
9.3 SEVERABILITY. If any provision contained in this
Employment Agreement is held to be invalid or unenforceable by
a court of competent jurisdiction, such provision will be
severed herefrom in such invalidity or unenforceability will
not effect any other provision of this Employment Agreement,
the balance of which will remain in and have its intended full
force and effect; provided, however, if such invalid or
unenforceable provisions may be modified so is to be valid and
enforceable as a matter of law, such provision will be deemed
to have been modified so as to be valid and enforceable to the
maximum extent committed by law.
9.4 MODIFICATION. This Employment Agreement may not be
changed, modified, discharged, or terminated except by a
writing signed by all the parties hereto.
9.5 FULLY BINDING. This Employment Agreement will be
binding on and inure to the benefit of the parties hereto and
their respective successors, assigns and personal
representative; provided, however, that this Employment
Agreement is assignable by the Company with the prior consent,
either oral or written, of the Executive.
9.6 HEADINGS. The numbers, headings, titles, or
designations to the various sections are not a part of this
Employment Agreement, but are for convenience of reference
only, and do not and will not be used to define, limit or
construe the contents of this Employment Agreement or any part
thereof.
9.7 WAIVER. By execution of this Employment Agreement,
the Executive hereby waives and relinquishes any and all
rights, benefits and entitlements to which he may hereafter
have under any other contract with the Company or any of its
corporate parents, subsidiaries or affiliates prior to the
date hereof; excepting that certain agreement dated April 15,
1993 pertaining to a deferred compensation payment and options
to purchase stock of UTI.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement on the date first above written.
EXECUTIVE: COMPANY:
First Commonwealth Corporation, a
Virginia corporation.
By: By:
Xxxxx X. Xxxxxxxx Title:
ATTEST:
By:
Title:
