Amendment No. 1
to
Employment Agreement
This Amendment No. 1 to the Employment Agreement (the "Agreement") dated as of
December 13, 2002 ("Agreement Date") by and between Financial Industries
Corporation, a Texas company ("Company"), and Xxxxxx Xxxx ("Executive"), a
resident of Texas. The parties desire to enter into this Amendment, which is
intended to modify certain terms and conditions of the Agreement. In
consideration of the mutual agreements contained herein, the Company and
Executive agree as follows:
1. Section 3.1 of the Agreement is hereby amended in its entirety to read as
follows:
3.1 Employment Period. The term of Executive's employment under this
Agreement (the "Employment Period") shall begin on the Agreement
Date and end on March 31, 2004. The Company reserves the right,
at its sole option, to establish an earlier date between January
1, 2004 and March 31, 2004 as the ending date of the Employment
Period. Executive shall be entitled to receive the payment set
forth in paragraph 6 of this Amendment No. 1 to the Employment
Agreement.
2. The parties acknowledge that Executive received a letter dated December 3,
2003, whereby Executive was assigned to the position of Chief Actuary of
the Company, reporting to the Chief Executive Officer of the Company,
effective January 15, 2004. The parties agree that said letter is hereby
rescinded.
3. Effective January 1, 2004, Section 2.1 of the Agreement is hereby amended
in its entirety to read as follows:
2.1 Duties. Company shall employ Executive during the Employment
Period as the Chief Financial Officer, and Executive shall have
the authority, duties, and responsibilities as are commensurate
and consistent with such position and title, and as provided in,
Company's by-laws. During the Employment Period, Executive shall
follow the lawful directives of the CEO which are consistent with
stated Board policy. During the Employment Period, Executive
shall perform the duties assigned to him, and shall devote his
full business time, attention and effort, excluding any periods
of disability, vacation, or sick leave to which Executive is
entitled, to the affairs of the Company and shall use his best
efforts to promote the interests of the Company; provided,
however, that, on and after January 1, 2004, Executive may devote
up to one day per week to the business of Actuarial Risk
Consultants, Inc. ("ARC"), which business Executive purchased
from an affiliate of the Company as of December 31, 2003. Except
as provided in the preceding sentence, Executive shall not engage
in any other business or commercial activity for profit,
including service on the board of directors of any corporation
other than the Company, without the prior written consent of the
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CEO. The preceding sentence is not intended to prevent Executive
from acting as a passive investor in any business which does not
involve the personal efforts of Executive. The Executive
acknowledges that his business time is not limited to a fixed
number of hours per week. Executive agrees that neither the
modification of his duties nor the close supervision of Executive
by the Audit Committee of the Board of Directors of the Company
constitutes "Good Reason", within the meaning of Section 1.21 of
the Agreement;
4. Effective January 1, 2004, Section 4.1 is amended in its entirety to read
as follows:
4.1 Salary. Executive shall be paid in accordance with normal payroll
practices (but not less frequently than monthly) at an annual
rate of $152,000.00 per year.
5. Section 4.2 is hereby deleted in its entirety.
6. Article IV -Compensation is amended by the addition of the following
section:
4.2 Severance Payment. In connection with the early termination of
the Employment Period, Company will pay to Executive a severance
payment in the amount of $310,000, one-half of which will be paid
on January 1, 2004 and the balance to be paid on the last day of
the Employment Period. The Company will deduct from each such
installment any applicable deductions for federal income taxes
and other related payroll taxes.
7. Section 7.1 is amended so as to substitute the phrase "March 31, 2004" for
the phrase the second anniversary of the Date of Termination (whether or
not during the Term" in the second line of said Section 7.1. Accordingly,
Section 7.1, as amended, reads as follows:
7.1 Non-Competition. Executive shall not at any time during the
period beginning on the Agreement Date and ending on March 31,
2004, directly or indirectly, in any capacity:
(a) engage or participate in, become employed by, serve as a
director of, or render advisory or consulting or other
services in connection with, any Competitive Business;
provided, however, that after the Date of Termination this
Section 7.1(a) shall not preclude Executive from being an
employee of, or consultant to, any business unit of a
Competitive Business if (i) such business unit does not
qualify as a Competitive Business in its own right and (ii)
Executive does not have any direct or indirect involvement
in, or responsibility for, any operations of such
Competitive Business that cause it to qualify as a
Competitive Business; or
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(b) make or retain any financial investment, whether in the form
of equity or debt, or own any interest, in any Competitive
Business; provided, however, that nothing in this subsection
shall restrict Executive from making an investment in any
Competitive Business if such investment (i) represents no
more than 1% of the aggregate market value of the
outstanding capital stock or debt (as applicable) of such
Competitive Business, (ii) does not give Executive any right
or ability, directly or indirectly, to control or influence
the policy decisions or management of such Competitive
Business, and (iii) does not create a conflict of interest
between Executive's duties under this Agreement and his
interest in such investment.
8. (a) In consideration of the obligations of the Company hereunder,
Executive hereby releases and forever discharges the persons and
organizations specified in Section 6(b), below, with respect to the
matters described in Section 6( c ), below. Executive acknowledges
that the consideration is in addition to anything of value to which he
is already entitled. Executive agrees that this release is on behalf
of himself, his heirs, executors, administrators, legal
representatives, successors and assigns.
(b) Executive releases the Company, any parent, subsidiary or otherwise
affiliated companies, successors and assigns, and all of their past,
present and future officers, directors, agents, administrators,
trustees, attorneys, insurers, successors and employees. Collectively,
these persons and organizations are intended to be third party
beneficiaries of this agreement and are referred to in this Agreement
as "the Released Parties."
(c) Executive releases the Released Parties from all existing, known, and
unknown claims, demands, and causes of action for all existing, known, and
unknown damages and remedies of any nature, which have accrued or which may
ever accrue, to me or to my heirs, executors, administrators, legal
representatives, successors, or assigns. This release includes but is not
limited to (i) all claims under any federal, state, or local employment law
or regulation, including without limitation Title VII of the Civil Rights
Act of 1964, as amended, 42 U.S.C. Section 2000e, et seq., the Equal Pay
Act, 29 U.S.C. Section 206, the Americans With Disabilities Act, 42 U.S.C.
Section 12101, et seq., the Fair Labor Standards Act, 29 U.S.C. Section
201, et. seq., the Age Discrimination in Employment Act, as amended (except
any claims arising after the date of this agreement), 29 U.S.C. Section
621, et seq., the Employee Retirement Income Security Act, as amended, 29
U.S.C. Section 1001, et seq., and the Texas Commission on Human Rights Act,
Texas Labor Code Section 21.001, et seq.; (ii) all claims under any other
state, federal, or local law or regulation and all claims at common law,
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including without limitation negligence, contract, or tort claims, and all
claims for backpay, front pay, damages, liquidated damages, exemplary and
punitive damages, injunctive relief, costs, or attorneys' fees; (iii) all
claims which Executive could assert now or claims Executive could assert in
the future, concerning the terms and conditions of his employment,
concerning anything that happened to Executive while he was an employee, or
concerning the early termination of the Agreement; or (iv) all claims which
Executive could assert pertaining to the matters described in a purported
letter agreement dated July 22, 2003, between Executive and Xxxxxx X.
Xxxxx, which letter agreement was rescinded by Executive and Xxxxxx X.
Xxxxx in a document dated August 20, 2003.
9. All capitalized terms in this Amendment shall have the meaning set forth in
the Agreement, in the absence of a different definition set forth herein.
10. To the extent that any terms of this Amendment are inconsistent with the
express terms of the Agreement, this Amendment shall control. All other
terms in the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, Company and Executive have caused this Amendment to be
executed as of this 31st day of December, 2003.
Financial Industries Corporation
By: /s/ Xxxxxxxx X. Xxxxxx
___________________________________
Title: Vice President and Secretary
________________________________
/s/ Xxxxxx Xxxx
______________________________________
Xxxxxx Xxxx
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