Exhibit 10.10
EMPLOYMENT AGREEMENT
WHEREAS, Goran Capital 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 Xxxx X. Xxxxxxxxxx
("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 Vice
President and Chief Financial Officer, effective as of May 1, 1997 and
continuing until April 30, 1998, 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 six (6) 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. 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 Vice President and Chief
Financial Officer of the Company and further agree to devote substantially all
of Your working time and attention to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities associated with
Your position as Vice President and Chief Financial Officer of the Company 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 the Company and the Board of Directors of the Company, which duties
shall be consistent with the position of Vice President and Chief Financial
Officer of the Company, which shall grant Executive authority, responsibility,
title and standing comparable to that of the vice president and chief financial
officer of a stock insurance holding company of similar standing and which will
not require Executive to relocate his principal place of residence from the
metropolitan Indianapolis, Indiana 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 Boards of Directors of the
Company shall, following the effective date of this Agreement, elect and appoint
Executive as Vice President and Chief Financial Officer. Consistent with Section
1.2 of this Agreement, Executive shall be primarily responsible for the
financial affairs of the Company.
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 $132,000. 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 herein, the catch-up payment shall be paid to Executive by April 1 of
each year of this Agreement. For the calendar year beginning January 1, 1997 and
for each succeeding calendar year thereafter, Company shall pay Executive the
salary applicable to that calendar year in twenty-six (26) bi-weekly
installments. 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 Goran Capital Inc. (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.
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 100% 10%
100% or more, but less than 125% 20%
125% or more 30%
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It is understood and agreed that Goran Capital Inc.'s budgeted net
income for the year ending December 31, 1997 is $16,267,000 and that budgeted
net income for future years shall be set forth in Annual Addendums to this
Agreement.
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 three (3) weeks paid vacation during each calendar
year.
(b) A vehicle commensurate with Executive's position.
2.7 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.
3. Termination of Executive's Employment
3.1 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, he shall receive, as severance pay, one (1) month's
current salary for each full and partial year of service. 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 3.1 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.
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3.2 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.
3.3 Change of Control. Notwithstanding any other provisions of this
Agreement, if (i) a Change of Control shall occur; and (ii) within twelve (12)
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, or (c)
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 such that his base salary is at or
greater than existing base salary pursuant to this Agreement;
or
(b) The expiration of seventy-eight (78) weeks from Executive's Date of
Termination.
The receipt by Executive of payment pursuant to this Section 3.3 is specifically
conditioned, and no payments pursuant to this Section 3.3 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 3.3 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
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of any payment to Executive required pursuant to this Section 3.3 shall be
reduced (but not below zero) by any compensation received by Executive during
the period called for in this Section 3.3.
A Change of Control shall mean the inability of the Xxxxxx family to
cause the election of a majority of the members of the Board of Directors of
Goran Capital Inc., Xxxxxx International Group, Inc. or their respective
successors.
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. Permanent disability shall be determined pursuant to the terms of
Executive's long term disability insurance policy provided by the Company. If
Company elects to terminate this Agreement based on such permanent disability,
such termination shall be for cause.
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.
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.
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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 for two (2)
years 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. It is expressly agreed and
understood that this Section 4.1(b) shall not apply to a
public accounting or consulting firm.
(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 Indiana 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
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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 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:
Goran Capital, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President and Chief Executive Officer
If to Executive, to:
Xxxx X. Xxxxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
or to such other addresses as one party may designate in writing to the other
party from time to time.
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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.
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.
GORAN CAPITAL INC. AND SUBSIDIARIES
("Company")
By:_______________________________________
Title:______________________________________
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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:_________________
XXXX X. XXXXXXXXXX
("Executive")
-----------------------------------
State of Indiana )
) SS:
County of __________)
Before me the undersigned, a Notary Public for _______________ County,
State of Indiana, personally appeared Xxxx X. Xxxxxxxxxx, and acknowledged the
execution of this instrument this _______ day of ___________________, 1996.
-------------------------------
, Notary Public
State of Indiana, County of _______________
My Commission Expires:_________________
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