Exhibit 10.9
EMPLOYMENT AGREEMENT
WHEREAS, GGS Management, Inc. and its subsidiaries (collectively, the
"Company") considers it essential to its best interests and the best interests
of its stockholders to xxxxxx the continuous employment of its key management
personnel and, accordingly, the Company desires to employ Xxxxx X. Xxxxxxxx
("You", "Your"or "Executive"), upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Executive desires to continue to be employed by the
Company, upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth below, the parties agree as follows:
1. Employment
1.1 Term of Agreement. The Company agrees to employ Executive as
Executive Vice President of Superior Insurance Company (including its
subsidiaries, "Superior"), effective as of April 23, 1997 and continuing until
March 31, 2002 ("Initial Term"), unless such employment is terminated pursuant
to Section 3 below; provided, however, that the term of this Agreement shall
automatically be extended without further action of either party for additional
one (1) year periods thereafter unless, not later than twelve (12) months prior
to the end of the then effective term, either the Company or the Executive shall
have given written notice that such party does not intend to extend this
Agreement. (the Initial Term and any extension thereof, the "Term"). If Company
gives Executive such a notice of non-renewal, Executive's employment shall
terminate as of the expiration date of this Agreement. It is expressly
understood and agreed that a notice of non-renewal issued by the Company shall
not extinguish the Executive's non-competition obligations pursuant to Section 4
herein.
1.2 Terms of Employment. During the Term, You agree to be a full-time
employee of the Company serving in the position of Executive Vice President of
Superior or other positions as the Chief Executive Officer or the Board of
Directors so direct and further agree to devote substantially all of Your
working time and attention to the business and affairs of Superior and, to the
extent necessary to discharge the responsibilities associated with Your position
as Executive Vice President of Superior and to use Your best efforts to perform
faithfully and efficiently such responsibilities. Executive shall perform such
duties and responsibilities as may be determined from time to time by the
Chairman and/or Chief Executive Officer of Superior and the Board of Directors
of Superior, which duties shall be consistent with the position of Executive
Vice President of Superior, which shall grant Executive authority,
responsibility, title and standing comparable to that of the executive vice
president and of a stock insurance company of similar standing and which will
not require Executive to relocate his principal place of residence from the
metropolitan Atlanta, Georgia area. Nothing herein shall prohibit You from
devoting Your time to civic and community activities or managing personal
investments, as long as the foregoing do not interfere with the performance of
Your duties hereunder.
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1.3 Appointment and Responsibility. The Board of Directors of Superior
shall, following the effective date of this Agreement, elect and appoint
Executive as Executive Vice President of Superior and Executive shall also be
elected to the Board of Directors of Superior. The parties hereby agree that the
failure to elect Executive to the Board of Directors of Superior shall, for
purposes of this Agreement, be a Termination of Executive without cause.
2. Compensation, Benefits and Prerequisites
2.1 Salary. Company shall pay Executive a salary, in equal bi-weekly
installments, equal to an annualized salary rate of $185,000. Executive's salary
as payable pursuant to this Agreement may be increased from time to time as
mutually agreed upon by Executive and the Company. Notwithstanding any other
provision of this Agreement, Executive's salary paid by Company for any year
covered by this Agreement shall not be less than such salary paid to Executive
for the immediately preceding calendar year. All salary and bonus amounts paid
to Executive pursuant to this Agreement shall be in U.S. dollars.
2.2 Bonus. The Company and Executive understand and agree that the
Company expects to achieve significant growth during the term of this Agreement
and that Executive will make a material contribution to that growth which will
require certain personal and familial sacrifices on the part of Executive.
Accordingly, it is the desire and intention of the Company to reward Executive
for the attainment of that growth through bonus and other means (including, but
not limited to, stock options, stock appreciation rights and other forms of
incentive compensation). Therefore, the Company will pay Executive a lump-sum
bonus (subject to normal withholdings) within thirty (30) business days from
receipt by Company of its consolidated, annual audited financial statements in
an amount which shall be determined in accordance with the following Bonus
Table. All amounts used for calculation purposes in this section shall be based
on the audited, consolidated financial statements of Superior (or any successor
thereto), with such financial statements having been prepared in accordance with
applicable Generally Accepted Accounting Principles, applied on a consistent
basis with that of prior years. It is agreed that Executive's minimum bonus for
the first year of this Agreement shall not be less than 35% of Executive's
salary.
BONUS TABLE
If Audited Net % of Annual Salary
Income (as a % of Payable to Executive
Budgeted Net Income Is As Bonus
Less Than 75% -0-
75% or more, but less than 90% 12.5%
90% or more, but less than 100% 25.0%
100% or more, but less than 115% 37.5%
115% or more 50.0%
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2.3 Employee Benefits. Executive shall be entitled to receive all
benefits and prerequisites which are provided to other Executives of Company
under the applicable Company plans and policies, and to future benefits and
prerequisites made generally available to executive employees of the Company
with duties and compensation comparable to that of Executive upon the same terms
and conditions as other Company participants in such plans.
2.4 Additional Prerequisites. During the term of this Agreement,
Company shall provide Executive with:
(a) Not less than four (4) weeks paid vacation during each calendar
year.
(b) A vehicle commensurate with Executive's position or, at
Executive's option, a vehicle allowance of at least $600.00
per month.
2.5 Expenses. During the period of his employment hereunder, Executive
shall be entitled to receive reimbursement from the Company (in accordance with
the policies and procedures in effect for the Company's employees) for all
reasonable travel, entertainment and other business expenses incurred by him in
connection with his services hereunder.
2.6 Stock Options. Within sixty (60) days of the execution of this
Agreement, Executive will receive options to purchase 5,000 shares of Xxxxxx
International Group, Inc. which vest in accordance with the Xxxxxx International
Group 1996 Stock Option Plan and 5,000 shares of GGS Management Holdings, Inc.
which vest in accordance with the GGS Management Holdings, Inc. Stock Option
Plan. These options shall be in addition to any options granted to the Executive
prior to the commencement of this Agreement. Further, Executive shall be
eligible to be awarded stock options, in the discretion of the Board of
Directors of GGS Management Holdings, Inc. and Xxxxxx International Group, Inc.
3. Termination of Executive's Employment
3.1 Change of Control. Notwithstanding any other provisions of this
Agreement, if (i) a Change of Control shall occur; and (ii) within six (6)
months of any such Change of Control, Executive (a) receives a Notice of
Non-Renewal, (b) is terminated for any reason other than for cause, (c) is not
employed elsewhere in the Goran Group on terms consistent with this Agreement,
or (d) Company (including its successors, if any) is in breach of this
Agreement, then Executive shall continue to receive his current salary (in
bi-weekly payments) until the earlier to occur of:
(a) Executive shall commence employment with a firm or entity
other than the Company or any of its Affiliates, such that his
base salary is at or greater than existing base salary
pursuant to this Agreement; or
(b) The expiration of the Term.
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The receipt by Executive of payment pursuant to this Section 3.1 is specifically
conditioned, and no payments pursuant to this Section 3.1 shall be made to
Executive if he is, at the time of his Termination, in breach of any provision
(specifically including, but not limited to, the provisions of this Agreement
pertaining to non-competition and confidentiality) of this Agreement and,
further, if such payments have already begun, the continuation of payments to
Executive pursuant to this Section 3.1 shall cease at the time Executive shall
fail to comply with the non-competition and confidentiality provisions of
Article 4 herein. It is expressly understood and agreed that the amount of any
payment to Executive required pursuant to this Section 3.1 shall be reduced (but
not below zero) by any compensation received by Executive during the period
called for in this Section 3.1.
A Change of Control shall mean the failure of Xxxxxx International
Group, Inc. (including any of its Affiliates) to own a majority of the
outstanding common stock of either GGS Management Holdings, Inc. or Superior
Insurance Company.
3.2 Termination of Employment and Severance Pay. Executive's employment
under this Agreement may be terminated by either party at any time for any
reason; provided, however, that if Executive's employment is terminated for any
reason other than for cause or poor performance, he shall receive, as severance
pay salary continuation, at the salary rate in effect at the time of
termination, until the end of the Term, (the "Severance Payments"). Further, if
Executive shall be terminated without cause, receipt of severance payments
described in the preceding sentence are conditioned upon execution by Executive
and the Company of that mutual Waiver and Release attached hereto as Exhibit A.
Further, Executive shall receive severance pay in accordance with this Section
3.2 if Executive shall terminate this Agreement due to a breach thereof by the
Company or if Executive is directed by the Company (including, if applicable,
any successor) to engage in any act or action constituting fraud or any unlawful
conduct relating to the Company or its business as may be determined by
application of applicable law. Should Executive fail to adequately perform his
duties as Executive Vice President of Superior, Executive shall receive written
notification of such performance issues and shall have ninety (90) days to
rectify such problem. Notwithstanding any other provision of this Agreement, if
Executive (a) shall be terminated for poor performance (which shall be
determined by the Chief Executive Officer of the Company and concurred in by a
majority of the Board of Directors of Superior); or (b) provided a Notice of
Non-Renewal, then Executive shall receive, as severance pay, salary continuation
until the earlier to occur of: (a) one (1) year from the date of Executive's
termination, or (b) Executive shall commence employment with a firm or entity
other than the Company or its Affiliates such that his base salary is at or
greater than the existing base salary pursuant to this Agreement. It is
expressly understood and agreed that the amount of any payment to Executive
required pursuant to this Section 3.2 shall be reduced (but not below zero) by
any compensation received by Executive during the period called for in this
Section 3.2.
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3.3 Cause. For purposes of this Section 3, "cause" shall mean:
(a) the Executive being convicted in the United States of America,
any State therein, or the District of Columbia, or in Canada
or any Province therein (each, a "Relevant Jurisdiction"), of
a crime for which the maximum penalty may include imprisonment
for one year or longer (a "felony") or the Executive having
entered against him or consenting to any judgment, decree or
order (whether criminal or otherwise) based upon fraudulent
conduct or violation of securities laws;
(b) the Executive's being indicted for, charged with or otherwise
the subject of any formal proceeding (criminal or otherwise)
in connection with any felony, fraudulent conduct or violation
of securities laws, in a case brought by a law enforcement or
securities regulatory official, agency or authority in a
Relevant Jurisdiction;
(c) the Executive engaging in fraud, or engaging in any unlawful
conduct relating to the Company or its business, in either
case as determined under the laws of any Relevant
Jurisdiction;
(d) the Executive breaching any provision of this Agreement; or
(e) gross negligence or willful misconduct by the Executive in the
performance of his duties hereunder.
3.4 Disability. So long as otherwise permitted by law, if Executive has
become permanently disabled from performing his duties under this Agreement, the
Company's Chairman of the Board, may, in his discretion, determine that
Executive will not return to work and terminate his employment as provided
below. Upon any such termination for disability, Executive shall be entitled to
such disability, medical, life insurance, and other benefits as may be provided
generally for disabled employees of Company during the period he remains
disabled, as well as a continuation of a portion of Executive's salary
("Supplemental Payments") necessary to make Executive's total remuneration for
the period beginning on the date of Executive's disability and ending six (6)
months thereafter at least equal to Executive's Base Salary at the time of Your
disability. Permanent disability shall be determined pursuant to the terms of
Executive's long term disability insurance policy provided by the Company.
Should Executive decease during the Term, the Company will continue to pay
Executive's salary, in regular bi-weekly payments, for the lesser of (a) six (6)
months, or (b) the remaining period of the Term of this Agreement.
3.5 Indemnification. Executive shall be indemnified by Company (and,
where applicable, its subsidiaries) to the maximum extent permitted by
applicable law for actions undertaken for, or on behalf of, the Company and its
subsidiaries.
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4. Non-Competition, Confidentiality and Trade Secrets
4.1 Noncompetition. In consideration of the Company's entering into
this Agreement and the compensation and benefits to be provided by the Company
to You hereunder, and further in consideration of Your exposure to proprietary
information of the Company, You agree as follows:
(a) Until the date of termination or expiration of this Agreement
for any reason (the "Date of Termination") You agree not to
enter into competitive endeavors and not to undertake any
commercial activity which is contrary to the best interests of
the Company or its Affiliates, including, directly or
indirectly, becoming an employee, consultant, owner (except
for passive investments of not more than one percent (1%) of
the outstanding shares of, or any other equity interest in,
any company or entity listed or traded on a national
securities exchange or in an over-the-counter securities
market), officer, agent or director of, or otherwise
participating in the management, operation, control or profits
of (a) any firm or person engaged in the operation of a
business engaged in the acquisition of insurance businesses or
(b) any firm or person which either directly competes with a
line or lines of business of the Company accounting for five
percent (5%) or more of the Company's gross sales, revenues or
earnings before taxes or derives five percent (5%) or more
of such firm's or person's gross sales, revenues or earnings
before taxes from a line or lines of business which directly
compete with the Company.
Notwithstanding any provision of this Agreement to the contrary, You
agree that Your breach of the provisions of this Section 4.1(a) shall permit the
Company to terminate Your employment for cause.
(b) If Your employment is terminated by You, or by reason of Your
Disability, by the Company for cause, or pursuant to a notice
of non-renewal as outlined in Section 1.1, then, during the
period you receive payments pursuant to Article 3 hereof, but
in no event for a period of less than one (1) year after the
Date of Termination, You agree not to become, directly or
indirectly, an employee, consultant, owner (except for
passive investments of not more than one percent (1%) of the
outstanding shares of, or any other equity interest in, any
company or entity listed or traded on a national securities
exchange or in an over-the-counter securities market),
officer, agent or director of, or otherwise to participate in
the management, operation, control or profits of, any firm or
person which directly competes with a business of the
Company which at the Date of Termination produced any class of
products or business accounting for five percent (5%) or more
of the Company's gross sales, revenues or earnings before
taxes at which the Date of Termination derived five percent
(5%) or more of such firm's or person's gross sales, revenues
or earnings before taxes.
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(c) You acknowledge and agree that damages for breach of the
covenant not to compete in this Section 4.1 will be difficult
to determine and will not afford a full and adequate remedy,
and therefore agree that the Company shall be entitled to an
immediate injunction and restraining order (without the
necessity of a bond) to prevent such breach or threatened or
continued breach by You and any persons or entities acting for
or with You, without having to prove damages, and to all costs
and expenses (if a court or arbitrator determines that the
Executive has breached the covenant not to compete in this
Section 4.1, including reasonable attorneys' fees and costs,
in addition to any other remedies to which the Company may be
entitled at law or in equity. You and the Company agree that
the provisions of this covenant not to compete are reasonable
and necessary for the operation of the Company and its
subsidiaries. However, should any court or arbitrator
determine that any provision of this covenant not to compete
is unreasonable, either in period of time, geographical area,
or otherwise, the parties agree that this covenant not to
compete should be interpreted and enforced to the maximum
extent which such court or arbitrator deems reasonable.
4.2 Confidentiality. You shall not knowingly disclose or reveal to any
unauthorized person, during or after the Term, any trade secret or other
confidential information (as outlined in the Uniform Trade Secrets Act) relating
to the Company or any of its Affiliates, or any of their respective businesses
or principals, and You confirm that such information is the exclusive property
of the Company and its Affiliates. You agree to hold as the Company's property
all memoranda, books, papers, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its
Affiliates, whether made by You or otherwise coming into Your possession and, on
termination of Your employment, or on demand of the Company at any time, to
deliver the same to the Company.
Any ideas, processes, characters, productions, schemes, titles, names,
formats, policies, adaptations, plots, slogans, catchwords, incidents,
treatment, and dialogue which You may conceive, create, organize, prepare or
produce during the period of Your employment and which ideas, processes, etc.
relate to any of the businesses of the Company, shall be owned by the Company
and its Affiliates whether or not You should in fact execute an assignment
thereof to the Company, but You agree to execute any assignment thereof or other
instrument or document which may be reasonably necessary to protect and secure
such rights to the Company.
5. Miscellaneous
5.1 Amendment. This Agreement may be amended only in writing, signed by
both parties.
5.2 Entire Agreement. This Agreement contains the entire understanding
of the parties with regard to all matters contained herein. There are no other
agreements, conditions or representations, oral or written, expressed or
implied, with regard to the employment of Executive
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or the obligations of the Company or the Executive. This Agreement supersedes
all prior employment contracts and non-competition agreements between the
parties.
5.3 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be delivered either in person or by certified or
registered mail, return receipt requested.
Any notice by mail shall be addressed as follows:
If to the Company, to:
Superior Insurance Company
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President and Chief Executive Officer
If to Executive, to:
Xxxxx X. Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
or to such other addresses as one party may designate in writing to the other
party from time to time.
5.4 Waiver of Breach. Any waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
5.5 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
5.6 Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Indiana, without giving effect to
conflict of law principles.
5.7 Headings. The headings of articles and sections herein are included
solely for convenience and reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
5.8 Counterparts. This Agreement may be executed by either of the
parties in counterparts, each of which shall be deemed to be an original, but
all such counterparts shall constitute a single instrument.
5.9 Survival. Company's obligations under Section 3.1 and Executive's
obligations under Section 4 shall survive the termination and expiration of this
Agreement in accordance with the specific provisions of those Paragraphs and
Sections and this Agreement in its entirety shall be binding upon, and inure to
the benefit of, the successors and assigns of the parties hereto.
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5.10 Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by You and such officer as may be specifically designated
by the Board. No waiver by either 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
subsequent time.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.
GGS MANAGEMENT, INC.
("Company")
By:__________________________________
Title:________________________________
State of Indiana )
) SS:
County of __________)
Before me the undersigned, a Notary Public for _______________ County,
State of Indiana, personally appeared __________________________, and
acknowledged the execution of this instrument this _______ day of
___________________, 1997.
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, Notary Public
State of Indiana
My Commission Expires:________________
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XXXXX X. XXXXXXXX
("Executive")
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State of Indiana )
) SS:
County of __________)
Before me the undersigned, a Notary Public for _______________ County,
State of Indiana, personally appeared Xxxxx X. Xxxxxxxx, and acknowledged the
execution of this instrument this _______ day of ___________________, 1997.
-------------------------------
, Notary Public
State of Indiana
My Commission Expires:_________________
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