1
EXHIBIT 10.3
ADMINISTRATORS FOR THE PROFESSIONS, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into as of January 1, 1999
by and between ADMINISTRATORS FOR THE PROFESSIONS, INC., a New York
corporation, with its principal place of business at 000 Xxxx Xxxxx Xxxx,
Xxxxxxxxx, XX 00000 ("Employer"),and XXXXXXX XXXXXX, an individual presently
residing at___________________________________________ ("Employee").
WITNESSETH:
WHEREAS, Employer desires to retain the services of Employee as its Chief
Executive Officer and President, and Employee desires to perform such services
for Employer on the terms and conditions set forth herein;
WHEREAS, Employee represents and Employer acknowledges that Employee is
fully qualified, without the benefit of any further training or experience, to
perform the responsibilities and duties, with commensurate authorities of the
position of Chief Executive Officer and President of Employer; and
WHEREAS, Employee agrees to devote Employee's full time and business
effort, attention and energies to the diligent performance of Employee's duties
hereunder.
NOW, THEREFORE, Employer and Employee, intending to be legally bound,
covenant and agree as follows:
1. Terms of Employment.
(1) Term. Employee's employment hereunder shall be for a term of three
(3) years beginning January 1, 1999, which term shall be extended for an
additional year at the end of each calendar year upon Employer's Board of
Directors (from time to time herein referred to as the "Board"), or a committee
thereof, giving notice to Employee prior to the end of any calendar year that
it wishes to extend this Employment Agreement for an additional year.
(2) Voluntary Termination. In the event Employer does not give notice
to Employee prior to the end of any calendar year that it wishes to extend this
Employment Agreement as specified in subparagraph (a) above, Employee may
voluntarily terminate Employee's employment under this Employment Agreement by
giving at least ninety (90) days written notice to Employer. Following the
effective date of such voluntary termination, Employee shall continue to
receive Employee's annual salary, payable as immediately prior to termination,
plus all benefits to which Employee is then entitled for the balance of the
term of this Employment Agreement. It is provided, however, that if Employee
breaches or fails to fulfill Employee's obligations under or is in violation of
Section
2
4(h), Section 7(g), or the fifth sentence of Section 1(c), such salary and
benefits shall thereupon terminate.
(3) Duties. The duties of Employee shall be as determined by the Board
in accordance with this Employment Agreement and the By-Laws of Employer in
effect from time to time. Employee may not be reassigned to an inferior
position, given a change in classification or reclassified, or transferred, nor
shall Employee's responsibilities, duties, authority or title change during the
term of this Employment Agreement, except as provided in subparagraph 1(b)
above. Without limiting the generality of the foregoing, Employee shall report
to and advise the Board regarding the management and operation of Employer's
business. In addition, Employee shall serve as one of Employer's nominated,
appointed, and designated representatives (a "Designated Representative") on
the Board of Governors of Physicians Reciprocal Insurers ("PRI"), the insurer
for which Employer serves as attorney-in-fact, for so long as Employer so
desires. If Employer notifies Employee that it or they no longer desire
Employee to serve as a Designated Representative, Employee shall immediately
resign and vacate such position. Failure of Employee to immediately resign and
vacate the position of Designated Representative shall entitle Employer to
terminate this Employment Agreement and, notwithstanding any other provision to
the contrary in this Employment Agreement, upon such termination, Employee
shall not be entitled to any salary or benefits for the remainder of the then
current term of this Employment Agreement or for any period thereafter.
Employee agrees to devote Employee's full time business efforts, attention and
energies to the diligent performance of Employee's duties hereunder and will
not, during the term hereof, accept employment, full or part-time, from any
other person, firm, corporation, governmental agency or other entity that, in
the reasonable opinion of the Board, would conflict with or detract from
Employee's capable performance of such duties; provided, however, Employee may
devote reasonable amounts of time to activities of a public service, civic, or
not-for-profit nature.
2. Compensation and Expenses. Employer shall pay or provide and
Employee shall accept as full consideration for the services to be rendered
hereunder, and as a reimbursement or provision for expenses incurred by
Employee the following:
(1) Salary. An annual salary of $400,000 payable in fifty-two (52)
equal weekly payments during each year of this Employment Agreement. Employee's
minimum total compensation, which in no event may be reduced in whole or in
part, shall be the annual salary at the rate of compensation received by
Employee for any given period of time or at the time of Employee's termination.
(2) Reviews. Annual performance reviews will determine annual salary
increases to which Employee becomes entitled, effective January 1, 2000, based
upon Employer's then current Compensation Program.
(3) Performance Bonus. If the Chief Executive Officer (the "FPIC CEO")
of Florida Physicians Insurance Company, Inc. ("FPIC") earns incentive
compensation for any year during the term of this Agreement beginning in 1999
based upon the performance of FPIC Insurance Group, Inc. ("FIG") for such year
pursuant to the then current Executive Incentive Compensation Program
2
3
applicable to the FPIC CEO, then Employee shall receive incentive compensation
comparable to, and in no case less than, that paid to the FPIC CEO based upon
FIG's performance for such year and shall have the opportunity to receive
additional incentive compensation based upon Employee's performance pursuant to
an incentive plan comparable to that presently available to the FPIC CEO,
subject to adjustment in the event of across-the-board increases or decreases
in bonus levels as determined by FIG's board of directors.
(4) Discretionary Additional Compensation. Any additional compensation
payable by resolution of the Board of Directors of Employer, and approved by
FIG, for Employee's outstanding performance.
(5) Benefits. Such benefits as may be made available from time to time
to senior management employees of FIG, but at no time, less than: (i) a
personal company automobile (BMW 740 or equivalent) including all the costs of
operating, maintaining, insuring, and licensing the automobile, (ii) initiation
fees, dues, assessments and other expenses of membership in appropriate clubs
or organizations of Employee's choice, as reasonably approved by the Board or
an appropriate committee thereof, it being understood that the Cherry Valley
Country Club of which Employee is a member as of the date of this Employment
Agreement shall be deemed approved by the Board or by such committee, and (iii)
those benefits provided pursuant to a Supplemental Executive Retirement Plan
(the "Xxxxxx SERP") created by Employer for the benefit of Employee, which
Xxxxxx SERP will provide to Employee retirement benefits as necessary so that
the aggregate level of retirement benefits (taking into account such factors as
years of service) provided by Employer to Employee is comparable to the level
of retirement benefits received by the current FPIC CEO.
(6) Signing Bonus. In consideration of and as a material inducement to
Employee's execution and delivery of this Employment Agreement and his
agreements hereunder, including, but not limited to, his agreements set forth
in Sections 4(h) and 7(g), Employer shall pay to Employee at the Closing of
FIG's acquisition of all of the outstanding capital stock of Employer (the "AFP
Acquisition") $500,000 (the "Signing Bonus"). Notwithstanding anything to the
contrary in this Employment Agreement, in the event of a breach of this
Agreement by Employee, Employer's remedies for such breach shall not include
requiring Employee to return to Employer the Signing Bonus.
(7) Special Performance Incentive. Employee shall have the opportunity
to earn a special performance incentive (the "Special Performance Incentive")
of up to $3,000,000, subject to adjustment as provided herein. Payment of any
Special Performance Incentive or any Remainder Incentive, as hereinafter
defined, to Employee shall be made 50% in cash and 50% in shares of FIG common
stock, par value $.10 per share ("FIG Common Stock").
(1) Incentive Related to Conversion and Acquisition of PRI.
Thirty (30) business days following (x) the conversion in accordance with
applicable New York law of PRI from a reciprocal to a stock insurer (the
"Conversion") and (y) the acquisition by FIG, Employer, or an affiliate thereof
of more than 50% (the actual percentage acquired being hereinafter referred to
as
3
4
the "Acquisition Percentage") of the outstanding stock of such stock insurer
(the "Acquisition"), Employer shall pay to Employee the Special Performance
Incentive, subject to adjustment as provided below. For purposes of
subparagraphs (A) and (B) below, the "Target Price" shall mean the Acquisition
Percentage multiplied by 115% of the total amount contained on the date of the
Conversion in the Subscribers' accounts established and maintained pursuant to
and in accordance with New York Insurance Law Section 6112 or any successor
provision and in accordance with the Subscribers Agreement as in effect on the
date hereof.
(A) If the Acquisition is completed at or below the Target
Price, the total amount of the Special Performance Incentive that Employee
shall be eligible to receive shall be $3,000,000.
(B) If, however, the Acquisition is completed at a price
above the Target Price (an "Excess Price"), then the amount of the Special
Performance Incentive that Employee shall be eligible to receive shall be
reduced by the percentage obtained by subtracting the Target Price from the
Excess Price and dividing the result by the Target Price.
(C) If the Acquisition Percentage is greater than or equal to
70%, then the Special Performance Incentive shall be as provided in
subparagraphs (A) and (B) above;
(D) If the Acquisition Percentage is greater than 50% but
less than 70%, then the Special Performance Incentive shall be as provided in
subparagraphs (A) and (B) above, but shall be reduced by multiplying the amount
of the Special Performance Incentive determined as provided in subparagraphs
(A) and (B) by the Acquisition Percentage (the "Partial Incentive");
(2) Incentive Related to Performance Goals. In the event FIG
undertakes but is unsuccessful in the completion of the Conversion or the
Acquisition, or if FIG notifies Employee that FIG has determined to not seek
the Conversion and the Acquisition, or if the Acquisition Percentage is less
than 70% (each, a "Noncompletion Event"), then Employee shall be eligible to
receive the difference between the Special Performance Incentive determined in
accordance with subparagraphs (A) and (B) above and the Partial Incentive, if
any, earned by Employee (the "Remainder Incentive") only if Employee has
accomplished each of the following performance goals established in
subparagraphs (1) through (4) below (collectively, the "Performance Goals" on
or before eighteen months after the occurrence of a Noncompletion Event:
(1) Either (i) the ratio of the number of employees of
Employer per medical malpractice insured of PRI is less than or equal to the
ratio of the number of employees of FPIC per medical malpractice insured of
FPIC, or (ii) the total salary expense of AFP, including claim chargebacks, is
less than or equal to that of FPIC, on a percent of premium basis;
(2) Employee, Employer, and FIG jointly have developed,
designed, organized, and implemented a reinsurance program approved by FIG, in
FIG's reasonable discretion,
4
5
and available generally to FIG and all entities that are subsidiaries or
affiliates of FIG (collectively, the "FIG Group") and available to PRI;
(3) Employee has organized, developed a business plan and
operating parameters for, staffed, obtained appropriate licenses for, and
accumulated a mutually agreed amount of managed assets in, an investment
management entity approved by FIG, in FIG's reasonable discretion, to manage
investment portfolio assets for the FIG Group and PRI; and
(4) Employee has organized, developed a business plan and
operating parameters for, staffed, and obtained appropriate licenses for, a
reinsurance brokerage business approved by FIG, in FIG's reasonable discretion,
to broker reinsurance for the FIG Group and PRI.
Employer shall cause the FIG Group to use all commercially reasonable efforts
to assist in accomplishing the Performance Goals.
The number of shares of FIG Common Stock comprising the stock portion of any
Special Performance Incentive or Partial Incentive to be paid to Employee
following the Conversion and Acquisition shall be determined by dividing 50% of
the amount of such Special Performance Incentive or Partial Incentive, as the
case may be, by the average (weighted to reflect daily trading volume) of the
daily closing prices per share of FIG Common Stock on the NASDAQ National
Market (or, if the FIG Common Stock is then traded on a national securities
exchange rather than through the NASDAQ National Market, on such national
securities exchange) as reported in the Southeast edition of the Wall Street
Journal for the first twenty (20) business days preceding the public
announcement of a definitive agreement concerning the Conversion and the
Acquisition.
In the event Employee has timely met the Performance Goals (the date thereof
being hereinafter referred to as the "Achievement Date"), then any Special
Performance Incentive or Remainder Incentive payable to Employee shall be paid
to Employee thirty (30) days following the Achievement Date and the number of
shares of FIG Common Stock payable as a portion of such Special Performance
Incentive or Remainder Incentive shall be determined by dividing an amount
equal to 50% of such Special Performance Incentive or Remainder Incentive by
the average (weighted to reflect daily trading volume) of the daily closing
prices per share of FIG Common Stock on the NASDAQ National Market (or, if the
FIG Common Stock is then traded on a national securities exchange rather than
through the NASDAQ National Market, on such national securities exchange) as
reported in the Southeast edition of the Wall Street Journal for the first
twenty (20) business days preceding the Achievement Date.
Notwithstanding the foregoing, no Special Performance Incentive or Partial
Incentive shall be paid to Employee regardless of whether the Conversion and
Acquisition ultimately are completed, if, prior to the completion of the
Conversion, Employee has voluntarily terminated this Employment Agreement or
has been dismissed for Cause following receipt of notice and an opportunity to
appear
5
6
before the Board as provided in Section 4(e), or Employee's employment has been
terminated due to death or permanent disability.
Employee acknowledges that any FIG Common Stock received by Employee shall
constitute unregistered securities and shall bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES ACTS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933
AND ANY APPLICABLE STATE SECURITIES ACTS OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
(8) Piggyback Registration. In the event that FIG, at any time after
the AFP Acquisition, proposes to register any FIG Common Stock, any other of
its equity securities or securities convertible into or exchangeable for its
equity securities and registrable under the Securities Act of 1933
(collectively, including FIG Common Stock, "Other Securities") under the
Securities Act of 1933 (the "Securities Act"), whether or not for sale for its
own account, in a manner that would permit registration of registrable
securities ("Registrable Securities") for sale for cash to the public under the
Securities Act, it shall at each such time give prompt written notice to
Employee. Subject to the terms and conditions hereof, such notice shall offer
Employee the opportunity to include in such registration statement such number
of Registrable Securities then owned by Employee as Employee requests. Upon the
written request of Employee (which written request shall specify the number of
Registrable Securities intended to be disposed of and the intended method of
disposition thereof) made within 15 days after the receipt of FIG's notice, FIG
shall use its commercially reasonable efforts to effect, in connection with the
registration of the Other Securities, the registration under the Securities Act
of all Registrable Securities which FIG has been so requested to register, to
the extent required to permit the disposition (in accordance with such intended
methods thereof) of the Registrable Securities so requested to be registered;
provided, that:
(1) if, at any time after giving such written notice of its
intention to register any Other Securities and prior to the effective date of
the registration statement filed in connection with such registration, FIG
shall determine for any reason not to register the Other Securities, FIG may,
at its election, give written notice of such determination to Employee and
thereupon FIG shall be relieved of its obligation to register such Registrable
Securities in connection with the registration of such Other Securities;
(2) if the registration referred to in the first sentence of this
Section 2(iii) is to be an underwritten registration on behalf of FIG, and a
nationally recognized investment banking firm selected by FIG advises FIG in
writing that, in such firm's good faith view, the inclusion of all or a part of
such Registrable Securities in such registration would be likely to have an
adverse effect upon the price, timing or distribution of the offering and sale
of the Other Securities then contemplated,
6
7
FIG shall include in such registration: (i) first, all Other Securities FIG
proposes to sell for its own account ("Company Securities"), (ii) second, up to
the full number of Registrable Securities held by other holders and are
requested to be included in such registration (Registrable Securities that are
so held being sometimes referred to herein as "Holder Securities") in excess of
the number of Company Securities to be sold in such offering which, in the good
faith view of such investment banking firm, can be sold without adversely
affecting such offering and the sale of the Other Securities then contemplated
(and if such number is less than the full number of such Holder Securities,
such number shall be allocated by FIG among such holders pro rata);
(3) FIG shall not be required to effect any registration of
Registrable Securities under this Section 2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange
offers, subscription offers, dividend reinvestment plans or stock option or
other executive or employee benefit or compensation plans.
(4) All underwriting discounts and selling commissions applicable
to the sale of Registrable Securities shall be borne by the holders of the
Holder Securities so registered pro rata on the basis of the number of their
shares sold, and all fees and disbursements of counsel for each holder shall be
paid by such holder. All other expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 2 shall be
borne by FIG.
3. Expenses. Employer agrees to reimburse Employee for ordinary and
necessary expenses incurred by Employee in performing services for Employer
pursuant to the terms of this Employment Agreement, in accordance with
established corporate policies.
4. Termination. Unless the employment of Employee previously has been
terminated pursuant to subparagraph 1(b), this Employment Agreement may be
terminated in the manner set forth in subparagraphs (a) through (f) below.
(1) Voluntary Termination by Employee. Employee may terminate this
Employment Agreement at any time by giving at least ninety (90) days written
notice to Employer, with no further obligation on Employer's part after the
effective date of such termination. It is agreed that should Employee
voluntarily terminate Employee's employment prior to the end of the term of
this Employment Agreement, Employee shall forfeit all rights to compensation
and all benefits based upon compensation occurring after the effective date of
such termination.
(2) Voluntary Termination by Employer. Employer may terminate this
Employment Agreement at any time for any reason sufficient to it, by act of its
Board. Such termination shall be immediately effective. Following such
voluntary termination, Employee shall continue to receive Employee's annual
salary, payable immediately prior to termination; together with any benefits
accrued to the date of termination, plus all benefits to which Employee is then
entitled, for the balance of the then current term of this Employment
Agreement. It is provided, however, that if Employee breaches or fails to
fulfill Employee's obligations under or is in violation of Section 4(h),
7
8
Section 7(g), or the fifth sentence of Section 1(c), such salary and benefits
shall thereupon terminate.
(3) Permanent Disability of Employee. If Employee has been, for
substantially all the normal working days during five (5) consecutive months,
unable to perform Employee's responsibilities and duties and to exercise
Employee's authorities in a satisfactory manner due to mental or physical
disability, then Employee may be deemed "permanently disabled," and Employee's
employment may be terminated at the election of the Board. Any determination of
permanent disability made by Employer shall be final and conclusive. In the
event that Employer deems Employee "permanently disabled," Employee shall be
entitled to receive the unpaid balance of Employee's annual salary, together
with other accrued benefits to the date of the determination of being
permanently disabled, payable as immediately prior to termination for the
remaining then current term of this Employment Agreement, less any amount
received by Employee under any Employer or Employer affiliate-provided long
term disability coverage and/or program. It is provided, however, that if
Employee breaches or fails to fulfill Employee's obligations under or is in
violation of Section 4(h), Section 7(g), or the fifth sentence of Section 1(c),
such salary and benefits shall thereupon terminate.
(4) Death of Employee. This Employment Agreement shall terminate on the
date of Employee's death, and Employer shall pay, in a lump sum, to the estate
or personal representative of Employee the unpaid balance of Employee's annual
salary, together with other accrued benefits, to the end of the year of death.
(5) Termination for Cause. The Board may terminate this Agreement for
cause, but only after a written notice specifying the cause has been submitted
to Employee. Employee shall be granted a reasonable opportunity to respond to
the notice, in writing, and in an appearance before the Board. A determination
by the Board to terminate this Agreement for cause may be made at a meeting of
the Board at which a quorum is present and by a vote of at least a majority of
the entire then current membership of the Board. If Employer terminates this
Employment Agreement for cause under this subparagraph, Employer shall not be
obligated to make any further payments under this Employment Agreement other
than amounts accrued at the time of such termination. "Cause" for the purposes
of this Agreement consists of the following:
(1) Employee's conviction of or plea of nolo contendere to a
dishonest act materially affecting Employer or fraud, misappropriation, or
embezzlement affecting Employer;
(2) Employee's conviction of or plea of nolo contendere to any
felony under state or federal law; or
(3) the failure or refusal of Employee to comply with any
reasonable material lawful policy, directive or instruction of the Board,
consistent with subparagraph l(c) hereof.
8
9
(6) Constructive Discharge. Employee may terminate this Employment
Agreement in the event of Constructive Discharge by providing written notice to
Employer within three months after the occurrence of such event, specifying the
event relied upon for a Constructive Discharge. "Constructive Discharge" shall
mean any (i) material change by Employer of Employee's position, functions, or
duties to an inferior position, functions, or duties from that in effect on the
date of this Agreement, (ii) assignment, reassignment, or relocation by
Employer of Employee without Employee's consent to another place of employment
that is not on Long Island, New York or is more than 50 miles from Employee's
current place of employment, [(iii) liquidation, dissolution, consolidation or
merger of Employer, or transfer of all or substantially all of its assets,
other than a transaction or series of transactions in which the resulting or
surviving transferee entity has, in the aggregate, a net worth at least equal
to that of Employer immediately before such transaction and expressly assumes
this Agreement and all obligations and undertakings of Employer hereunder,] or
(iv) reduction in Employee's base salary or target bonus opportunity (if
greater than the target bonus opportunity, the average of the annual bonuses
paid to Employee in the three calendar years prior to the calendar year of the
Constructive Discharge). Following termination of Employee's employment in the
event of a Constructive Discharge, Employee shall continue to receive
Employee's annual salary, payable as immediately prior to termination, plus all
benefits to which Employee is then entitled, for the balance of this Employment
Agreement. It is provided, however, that if Employee breaches or fails to
fulfill Employee's obligations under or is in violation of Section 4(h),
Section 7(g), or the fifth sentence of Section 1(c) of this Agreement, such
salary and benefits shall thereupon terminate. Employer and Employee, upon
mutual agreement, may waive any of the foregoing provisions that would
otherwise constitute a Constructive Discharge. Within ten days of receiving
such written notice from Employee, Employer may cure the event that constitutes
a Constructive Discharge.
(7) Return of Property. Upon any termination of this Agreement,
Employee shall immediately turn over to Employer all of Employer's property,
both tangible and intangible. To the extent that such Employer's property shall
constitute a benefit to Employee under this Agreement, Employee shall receive
from Employer the value of that benefit for the remaining term of this
Agreement.
(8) Covenants. Employer and Employee acknowledge, covenant and agree as
follows:
(1) Wrongful Inducement. Any attempt on the part of Employee to
induce others to leave Employer's employ, or any efforts by Employee to
interfere with Employer's relationships with other employees, or to interfere
with Employer's relationship with PRI, would be harmful and damaging to
Employer. Employee expressly agrees that during the term of this Employment
Agreement and for any period of time during which Employer is paying to
Employee salary and other benefits provided for in this Employment Agreement
and for a period of two (2) years thereafter, Employee will not, in any manner,
directly or indirectly, or through any means: (A) induce or attempt to induce
any employee of Employer or an affiliate thereof to terminate his or her
employment; (B) interfere with or disrupt Employer's or any affiliate's
relationship with any of their
9
10
employees; or (C) solicit, entice, take away or employ any person employed by
Employer or any affiliate.
(2) Restrictive Covenants. Employee expressly agrees that during
the term of this Employment Agreement and for any period of time during which
Employer is paying to Employee salary and other benefits provided for in this
Employment Agreement and for a period of two (2) years thereafter, Employee
shall not, directly or indirectly, own, operate, manage, have a proprietary
interest of any kind in, extend financial assistance to, solicit, encourage or
handle patronage for, be employed by or serve as a consultant, officer,
director, employee, or in any other capacity for any person, corporation,
company, partnership or other entity engaged in the medical professional
liability insurance business or the business of providing management or other
insurance services to medical professional liability insurers in or operating
within the State of New York, except that Employee may own two percent (2%) of
the outstanding stock in a publicly held corporation engaged in such a business
provided that such stock does not in any way represent any form of compensation
for any services rendered by Employee to such publicly held corporation.
(3) Designated Representative. Upon any termination of this
Agreement, regardless of the reason for termination, Employee shall resign and
be deemed to have resigned as Employer's Designated Representative on the Board
of Governors of PRI.
(4) Confidentiality. Employee agrees not to, without prior
written consent of Employer, divulge to others, or use, for Employee's own
benefit or for the benefit of others, any intellectual property, trade secrets
or confidential or proprietary information or data of Employer, PRI or their
affiliates, including without limitation, the contents of advertising, customer
lists, information regarding customers or their customers, programming methods,
business plans, strategies, financial statements, copyrights, correspondence or
other records of Employer, PRI or their affiliates. The restrictions of this
Section shall not apply to information relating to the business or interests of
Employer, PRI, or their affiliates that is, or shall lawfully and rightfully
become, public knowledge and in the public domain through no fault or wrongful
act of Employee; nor shall the restrictions of this Section 4(h)(iv) apply to
information that is (i) disclosed by Employee after obtaining prior written
consent of Employer, or (ii) is required or ordered to be divulged by a court
of competent jurisdiction or an administrative agency having lawful authority
to require disclosure of Employer's knowledge of such information. If Employee
is requested or required to disclose any such information, Employee will
provide Employer with written notice thereof so that Employee may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 4(h)(iv).
(5) Remedy. Employee acknowledges that Employee will be
conversant with Employer's, PRI's, and their affiliates' affairs, operations,
trade secrets, customers, customers' customers and other proprietary
information data; that Employee's compliance with the provisions of this
Section (h) is necessary to protect the goodwill and other proprietary rights
of Employer; and that Employee's failure to comply with the provisions of this
Section (h) will result in irreparable and continuing damage to Employer, PRI,
and their respective affiliates for which there will be no
10
11
adequate remedy at law. If Employee shall fail to comply with the provision of
this Section (h), Employer (and its respective successors and assigns) shall be
entitled to injunctive relief and to such other and further relief as may be
proper and necessary to ensure such compliance. Employee further acknowledges
that the restrictions, prohibitions and other provisions of this Section are
reasonable, fair and equitable in scope, term and duration, are necessary to
protect the legitimate business interests of Employer, and its affiliates, and
are a material inducement to Employer to enter into the transactions herein
contemplated. Employee covenants that he will not challenge the enforceability
of this Section (h) or any provision hereof nor will he raise any equitable
defenses to such enforcement. In the event that any restriction contained in
this Section (h) shall be held to be too broad in scope or too long in duration
to allow enforcement of such restriction to its full extent, then such
restriction shall be enforced to the maximum extent permitted by law, and
Employee hereby consents and agrees that such scope or duration may be
judicially modified accordingly in any proceeding brought to enforce such
restriction.
(6) Mitigation. In no event shall Employee be obligated to seek
other employment or to take other action by way of mitigation of the amounts
payable to Employee under any of the provisions of this Agreement and if
Employee obtains other employment, provided that such employment is not in
violation of the restrictive covenants of Section 4(h)(ii) or in violation of
Section 7(g), no compensation or other payments received by Employee in
connection with such other employment shall mitigate the amounts payable to
Employee under this Agreement.
5. Employment Security.
(1) Uncontrollable Event. If Employer suffers from any natural or
manmade disaster, work stoppage, civil disobedience, act of war, or any other
emergency condition beyond Employee's control the term of this Employment
Agreement shall remain in full force and effect as if such event had not taken
place.
(2) Corporate Reorganization. In the event of the merger, consolidation
or acquisition of Employer with or by any other corporation, corporations or
other business entities, the sale of Employer or a major portion of its assets,
or of its business or good will or any other corporate reorganization involving
Employer, this Employment Agreement shall be assigned and transferred to the
successor in interest as an asset of Employer and the assignee shall assume
Employer's obligations hereunder, and Employee agrees to continue to perform
Employee's duties and obligations hereunder. Failure to assign this Employment
Agreement prior to any of the events set forth in this subparagraph 5(b) will
obligate Employer to fulfill the terms and conditions hereof prior to
consummating the applicable event.
6. Arbitration. In the case of any dispute or disagreement arising out
of or connected with this Agreement, the parties hereby agree to submit such
disputes or disagreements to the American Arbitration Association within ninety
(90) days of such dispute or disagreement for resolution by a panel of three
arbitrators designated by the American Arbitration Association, sitting in
Jacksonville, Florida. The panel of arbitrators shall be instructed to render
their decision within
11
12
one hundred twenty (120) days of the initial submission of the dispute or
disagreement to them. Any decision or award by such arbitration panel shall be
final and binding, and except in a case of gross fraud or misconduct by one or
more of the arbitrators, the decision or award rendered with respect to such
dispute or disagreement shall not be appealable.
7. Miscellaneous.
(1) All notices and other communications hereunder shall be in writing
and shall be delivered personally, telegraphed, telexed (with appropriate
answerback received), sent by facsimile transmission (with immediate
confirmation by telephone conference with the recipient party thereafter), or
sent by registered, certified or express mail, postage prepaid, return receipt
requested, or sent by a nationally recognized overnight courier service, marked
for overnight delivery. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed (provided the correct answerback is received),
or sent by facsimile transmission (provided confirmation is received
immediately thereafter); or if mailed, three (3) business days after the date
of deposit in the mails; or if sent by overnight courier, one (1) business day
after the date of delivery to the courier service marked for overnight
delivery; in each case addressed as follows:
FPIC Insurance Group, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: 904/000-0000
Facsimile: 904/350-1049
with a copy to:
Xxxx X. Xxxxx, Esq.
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000-0000
Telephone: 904/000-0000
Facsimile: 904/353-1673
and
Xxxxxxx Xxxxxx
000 Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Telephone: 516/000-0000
Facsimile: 516/564-8682
12
13
with a copy to:
Xxxx X. Xxxxxxx, Esq.
Horowitz, Mencher, Xxxxxxxxx & Xxxxxxx, P.C.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Telephone: 516/000-0000
Facsimile: 516/222-2665
(2) Employer hereby agrees that no request, demand or requirement shall
be made to or of Employee that would violate any federal or state law or
regulations.
(3) Should any valid federal or state law or final determination of any
administrative agency or court of competent jurisdiction affect any provision
of this Employment Agreement, the provision so affected shall be automatically
conformed to the law or determination; otherwise, this Employment Agreement
shall continue in full force and effect.
(4) This Employment Agreement is made and entered into in the State of
New York and its validity and interpretation, and the performance by the
parties hereto of their respective duties and obligations hereunder, shall be
governed by the laws of the State of New York and of the United States of
America, without regard to any conflicts of interest laws that would call for
the application of the laws of any other jurisdiction.
(5) This Employment Agreement may be amended only by an instrument in
writing executed by the parties hereto.
(6) The headings of the various sections of this Employment Agreement
are inserted for the convenience of the parties and shall not affect the
meaning, construction, or interpretation of this Employment Agreement. They are
not intended to modify or explain, or to be a full or accurate description of
the contents thereof.
(7) Employee acknowledges that the relationships of Employer with PRI
and with the insureds of PRI are unique, key assets of Employer and of
fundamental and material importance to Employer in determining to execute and
deliver this Agreement. Therefore, Employee acknowledges and agrees that he
shall not at any time or in any manner induce or attempt to induce PRI to
terminate its relationship or contractual agreements with Employer.
Notwithstanding any other provisions of this Agreement, the provisions of this
Section 7(g) shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on the day and date first set forth above.
13
14
Xxxxxxx Xxxxxx Administrators for the Professions,
Inc.
By
---------------------------------- ---------------------------------
Its President
-----
---------------------------------- -----------------------------------
Attest Attest
GUARANTY
FPIC Insurance Group, Inc., by its execution hereof, hereby guarantees
the performance by Administrators for the Professions, Inc. of its obligations
to Xxxxxxx Xxxxxx under the foregoing Employment Agreement.
FPIC Insurance Group, Inc.
By:
------------------------------
Its President
-----
14
