EMPLOYMENT AGREEMENT
Employment
Agreement (“Agreement”), dated as of April 3, 2008, by and between Xxxxxxx X.
Xxxxxx, an individual with an address at 00000
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxxx, XX 00000
(“Executive”), and VEBA Administrators, Inc. doing business as Benefit Planning,
Inc., a California corporation, with its principal office located at
0000
Xxxxxxxxx Xxx, 0xx Xxxxx, Xxxxxx Xxx Xxx, XX 00000
(the
“Company”).
RECITALS
A. Pursuant
to that certain Stock
Purchase Agreement entered by and between National Investment Managers Inc.
(“NIM”), the California Investment Annuity Sales, Inc. ("CIAS"), Xxxxxxx
X. Xxxxxx and Xxxx X. Xxxxxx Inter Vivos Trust Agreement dated 1/29/97 as
amended and restated 1/10/03
and
Xxxxxxx X. Xxxxxxx dated April 3, 2008 (the “Purchase Agreement”), contemporaneously
with the execution of this Agreement, CIAS was acquired by NIM. After the
acquisition, CIAS will be an affiliate of the Company.
B. Pursuant
to the Purchase Agreement, NIM has agreed to cause the Company to retain
Executive as an employee during the Term (as defined below).
C. Executive
desires to be employed by the Company during the Term, all upon the terms and
conditions set forth herein.
NOW,
THEREFORE, the Company and Executive agree as follows:
1 Engagement;
Duties.
Subject
to the terms and conditions set forth herein, the Company shall employ
Executive, and Executive shall serve the Company, as Executive Consultant during
the Term (as defined in Section 2). In such capacity, Executive shall perform
duties and be assigned responsibilities that are substantially similar to those
performed by the Executive immediately prior to the date hereof and as may
be
assigned to Executive from time to time consistent with the duties performed
by
the Executive immediately prior to the date hereof. During the Term, the
Executive shall report to the Chief Executive Officer and Chief Operating
Officer of NIM. During the Term, Executive shall use Executive’s reasonable
efforts to promote the interests of the Company, shall perform Executive’s
duties faithfully and diligently, consistent with sound business practices
and
shall devote Executive’s “full business time” to the performance of Executive’s
duties for the Company in accordance with the terms hereof. For purposes of
this
Section 1, “full business time” shall mean an average of thirty five (35) hours
per non vacation weeks during the Term (as defined below).
2 Term. Unless
this Agreement is terminated pursuant to Section 6, the term of this Agreement
(“Term”) shall be for a period of one (1) year,
commencing on April 3, 2008 and expiring on April 3, 2009.
3 Compensation.
As
consideration for the performance by Executive of Executive’s obligations under
this Agreement, the Company shall pay Executive a base salary as
follows:
1
(A) During
the Term, the Company shall pay Executive a base salary (“Base Salary”) at the
annual rate equal to Ninety Dollars ($90,000) per year.
(B) An
annual
bonus shall be paid at the discretion of the Board of Directors of the Company
which shall be equal to up to 50% of the Base Salary and shall be based on
the
performance criteria established by NIM’s President and Chief Operating Officer.
In the event a bonus is declared for any of the other employees of the Company,
then Executive shall receive a bonus, so long as the performance criteria have
been satisfied. The bonus shall be payable no later than thirty (30) days after
the end of each twelve (12) month period during the Term of this
Agreement.
(C) The
Company shall pay the Executive fees as set forth on Schedule 1 attached hereto
associated with new business generated by Executive.
(D) The
Base
Salary shall be payable in accordance with the Company’s normal payroll policy.
The Company
shall deduct from the Base Salary and any other compensation any federal, state
or local withholding taxes, social security contributions and any other amounts
which may be required to be deducted or withheld by the Company pursuant to
any
federal, state or local laws, rules or regulations.
4 Reimbursement
of Expenses; Fringe Benefits.
(A) Expenses.
During
the Term, the Company shall reimburse Executive for ordinary and necessary
business expenses incurred by Executive in the performance of Executive’s duties
on behalf of the Company in accordance with the Company’s expense reimbursement
policy.
(B) Fringe
Benefits.
During
the Term, Executive shall be entitled to those fringe benefits and perquisites
that are provided to other similarly situated executives of the Company
generally, including any health or other insurance, pension and/or retirement,
or welfare plan. Notwithstanding the foregoing, the parties acknowledge and
agree that Executive shall not be entitled to fringe benefits and perquisites
identified as non-recurring on Exhibit
A
annexed
hereto.
(C) Vacation. Executive
shall be entitled to four (4) weeks paid vacation days during each calendar
year
of the Term, pro-rated for any partial calendar year, at such times as are
mutually agreed upon by Executive and the Company.
5 Relocation.
In no
event shall Executive be required to relocate or perform his services in another
office or location which is more than twenty (20) miles distant from the
Company's current principal office location.
6 Termination.
Executive may terminate this Agreement in the event that Xxxx Xxxxx’ employment
as COO and President of NIM is terminated (the “Xxxxx Termination”). The Company
may terminate this Agreement upon Executive's death, and may terminate this
Agreement at any earlier time at the option of the Company due to Executive's
Disability (as defined below) or for Cause (as defined below).
2
(A) As
used
in this Agreement:
(i) The
term
"Disability" means the inability of Executive substantially to perform
Executive’s duties and obligations under this Agreement for sixty (60)
consecutive days or sixty (60) days in any one hundred twenty (120)-day period
because of any mental or physical incapacity.
(ii) The
term
"Cause" means (A) any act by Executive that damages, in any material respect,
the reputation, business or business relationships of the Company, (B) any
action by Executive that constitutes a fraud against the Company, (C) the
conviction of Executive of a felony, (D) Executive's refusal or failure to
perform Executive’s duties that continues for a period of ten (10) business days
after notice of such refusal or failure is given by the Company to Executive,
(E) any material breach by Executive of this Agreement or any other agreement
between Executive and the Company, or any affiliate of the Company, that
continues for a period of ten (10) business days after notice of such breach
is
given by the Company to Executive, or (F) any failure by the Executive to
maintain Executive’s securities registrations and other regulatory licenses and
authorizations, including without limitation, any willful violation of
applicable laws, rules or regulations by the Executive that results in the
suspension or revocation of such registrations, licenses or
authorizations.
(iii) The
term
“Termination Date” shall mean the earlier of the expiration of this Agreement or
the effective date of the Company’s termination of this Agreement as provided in
Section 6(A).
(B) Payments
to Executive Upon Termination of This Agreement.
(i) In
the
event this Agreement is terminated prior to the expiration of the Term by
the
Company without Cause, the Company shall pay to Executive the amounts set forth
in this Section 6(B)(i)
within
thirty (30) days of the effective date of termination: (a)
an
amount equal to Executive’s accrued but unpaid Base Salary and earned but unpaid
bonus prior to the date of termination; (b) reimbursement for any reimbursable
business expenses incurred in accordance with this Agreement prior to the
Termination Date; (c) Executive’s Base Salary for the remainder of the Term,
payable as and when such Base Salary otherwise would have been payable in
accordance with the Company’s payroll practices (provided, however, if the
Company’s payroll practices change after the Executive has begun to receive
payments under this Section 5(B)(i)(c), such payments shall continue to be
made
in accordance with the Company’s payroll practices prior to such change); and
(d) any other amounts or benefits due under this Agreement and any benefit
plan,
or program through the remainder of the Term in accordance with the terms of
said plan or program.
For
purposes of this Sections 6(B) (i) and (ii), the bonus calculation, including
performance criteria, shall be prorated during any twelve month period in which
a termination occurs.
(ii) In
the
event this Agreement is terminated prior to the expiration of the Term by
Executive in the event of a Xxxxx Termination or by the Company for Cause or
due
to Executive’s death or Disability or resignation as provided in the
introductory paragraph of this Section 6 other than for the reasons described
in
Section 6(B)(i) above, the Company shall pay to Executive the amounts set forth
in this Section 6(B)(ii):
(a) an
amount equal to Executive’s accrued but unpaid Base Salary and earned but unpaid
bonus prior to the date of termination; (b) reimbursement for any reimbursable
business expenses incurred in accordance with this Agreement prior to the
Termination Date; and (c) any other amounts or benefits due through the
Termination Date under this Agreement and any benefit plan, or program in
accordance with the terms of said plan or program.
3
(iii) Upon
expiration of the Term, the Company shall pay to Executive the amounts set
forth
in this Section 6(B) (iii): (a) all of Executive’s accrued but unpaid Base
Salary and earned but unpaid bonus prior to the date of termination; (b)
reimbursement for any reimbursable business expenses incurred in accordance
with
this Agreement prior to the end of the Term; and (c) any other amounts or
benefits due through the end of the Term under this Agreement and any benefit
plan, or program in accordance with the terms of said plan or program, but
without duplication.
The
Company’s obligations under Sections 6(B)(i), (ii) and (iii) shall survive
termination of this Agreement.
7 Non-Disclosure;
Non-Solicitation. Reference
is made to the
Non-Solicitation and Non-Disclosure Agreement, of even date herewith, between
NIM, the Company and Executive, which is incorporated herein by reference and
shall survive the expiration or termination of this Agreement.
8 Representation
and Warranty of Executive.
Executive represents and warrants to Company that the execution and delivery
of
this Agreement and the performance of Executive’s obligations pursuant hereto
shall not conflict with or result in a breach of any provisions of any (a)
agreement, commitment, undertaking, arrangement or understanding to which
Executive is a party or by which Executive is bound; or (b) order, judgment
or
decree of any court or arbitrator.
9 General
Provisions.
(A) Notices.
All
notices and other communica-tions under this Agreement shall be in writing
and
may be given by personal delivery, registered or certified mail, postage
prepaid, return receipt requested or generally recognized overnight delivery
service. Notices shall be sent to the appropriate party at that party's address
set forth above or at such other address for that party as shall be specified
by
notice given under this Section. All such notices and communications shall
be
deemed received upon (a) actual receipt by the addressee or (b) actual delivery
to the appropriate address. Copies of notices hereunder shall be sent as
follows: If to Executive - to: Xxxxxxx
X. Xxxxxx,,16839
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxxx, XX 00000,
Facsimile: 000-000-0000 with a copy to Xxxxxxx X. Xxxxx, Esq., Xxxxx Luftman
Xxxxxxx & Xxxxx, 00000 Xxxxxxxx Xxxx., Xxxxx Xxxxx, Xxx Xxxxxxx, XX 00000,
fax no. 000-000-0000; and if to the Company, to: VEBA
Administrators, Inc., c/o National
Investment Managers Inc., 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxx 00000,
fax no. (000) 000-0000 attention: Chief Financial Officer, and to: Law Offices
of Xxxxxxx X. Xxxxxxx PLLC, 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx,
Xxxx Xxxxxx, Xxx Xxxx 00000, fax no. 000 000 0000, attention: Xxxxxxx X.
Xxxxxxx, Esq.
(B) Assignment.
This
Agreement shall be binding upon, and inure to the benefit of, the parties'
respective successors, permitted assigns, and heirs and legal representatives.
This Agreement may be assigned to, and thereupon shall inure to the benefit
of,
any organization which succeeds to substantially all of the business or assets
of the Company, whether by means of merger, consolidation, acquisition of all
or
substantially all of the assets of the Company or otherwise, including, without
limitation, by operation of law. This Agreement is a personal services contract
and may not be assigned by Executive nor may the duties of Executive hereunder
be delegated by Executive to any other person.
4
(C) Severability.
If any
provision of this Agreement, or the application of any provision to any person
or circumstance, shall for any reason or to any extent be invalid or
unenforceable, the remainder of this Agreement and the application of that
provision to other persons or circumstances shall not be affected, but shall
be
enforced to the full extent permitted by law.
(D) No
Waiver.
The
failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other
term
of this Agreement. Any waiver must be in writing.
(E) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California applicable to agreements made and to be performed in that
state, without regard to any of its principles of conflicts of laws or other
laws that would result in the application of the laws of another jurisdiction.
This Agreement shall be construed and interpreted without regard to any
presumption against the party causing this Agreement to be drafted. Each of
the
parties hereby unconditionally and irrevocably waives the right to a trial
by
jury in any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. Unless the matter is subject
to Arbitration as provided in Section 9 (F), below, each of the parties
unconditionally and irrevocably consents to the exclusive jurisdiction of the
courts of the State of California located in the County of Los Angeles and
the
Federal court in the Central District of California with respect to any suit,
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and each of the parties hereby unconditionally
and irrevocably waives any objection to venue in any such court.
5
(F) Arbitration.
Arbitrable
Claims.
To the
fullest extent permitted by law, all disputes between Executive (and his
attorneys, successors, and assigns) and Company and its affiliates,
members, shareholders, directors, officers, employees, agents, successors,
insurers, attorneys, and assigns) of any kind whatsoever, including, without
limitation, all disputes relating in any manner to the employment or termination
of Executive, and all disputes arising under this Agreement, (“Arbitrable
Claims”) shall be resolved by arbitration. All persons and entities specified in
the preceding sentence (other than Company and Executive) shall be
considered third-party beneficiaries of the rights and obligations created
by
this Section on Arbitration.
Procedure.
Arbitration of Arbitrable Claims shall be before the Judicial Arbitration and
Mediation Service (“JAMS”) in accordance with its Rules for the resolution of
disputes, as amended, and as augmented in this Agreement. Arbitration shall
be
final and binding upon the parties and shall be the exclusive remedy for all
Arbitrable Claims. Either party may bring an action in court to compel
arbitration under this Agreement and to enforce an arbitration award. Otherwise,
neither party shall initiate or prosecute any lawsuit or administrative action
in any way related to any Arbitrable Claim. Notwithstanding the foregoing,
either party may, at its option, seek injunctive relief pursuant to section
1281.8 of the California Code of Civil Procedure. All arbitration hearings
under
this Agreement shall be conducted in Los Angeles, California. Company
shall pay the arbitrator’s and JAMS’ fees and costs to the extent required by
law. If
the
allocation of responsibility for payment of the arbitrator’s fees and costs
would render the obligation to arbitrate unenforceable, the parties authorize
the arbitrator to modify the allocation as necessary to preserve enforceability.
The arbitrator shall apply and follow California Substantive and Evidence Law.
The decision of the arbitrator shall be in writing and shall include a statement
of the essential conclusions and findings upon which the decision is based.
The
interpretation and enforcement of this agreement to arbitrate shall be governed
by the California Arbitration Act. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY
MAY
HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT
LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE, VALIDITY,
OR
ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE.
(G) Attorneys'
Fees. In
the event of any dispute between parties to this Agreement, the prevailing
party
shall be entitled to immediate payment of all costs incurred by such party
in
such dispute, including, but not limited to, court costs and reasonable
attorneys' fees.
(H) Counterparts.
This
Agreement may be executed in counterparts, both of which shall be considered
an
original, but both of which together shall constitute the same instrument.
In
addition, the parties may execute multiple original copies of this Agreement,
each of which shall be considered an original, but all of which shall be
considered the same Agreement.
(I) Entire
Agreement; Amendment.
This
Agreement contains the complete statement of all the arrangements between the
parties with respect to its subject matter, supersedes all prior agreements
between them with respect to that subject matter, and may not be changed or
terminated orally. Any amendment or modification must be in writing and signed
by the party to be charged.
6
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date first set forth
above.
|
VEBA
Administrators, Inc., doing business as Benefit Planning, Inc., a
California corporation
|
|
|
By:
/s/Xxxxxx Xxxx
|
|
|
Name:
Xxxxxx Xxxx
|
|
|
Title:
CEO
|
|
|
/s/
Xxxxxxx X. Xxxxxx
|
|
|
Xxxxxxx
X. Xxxxxx
|
[SIGNATURE
PAGE - XXXXXX EMPLOYMENT AGREEMENT]
7
SCHEDULE
1
This
Schedule I pertains only to new business generated by the
Executive.
|
Type
of revenue
|
Payment
to Executive
|
Part
A
|
·
Referrals
for TPA business
|
30%
of the first year TPA fees (legal and plan administration), excludes
amendments and restatement fees.
|
Part
B
|
·
Asset
based installation allowance (on asset deposit/transfer and 1st
year flow) received from insurance carrier
|
30%
of fee *
|
|
·
Insurance
& Securities Commissions
|
50%/50%
split with NIVM (after Broker/Dealer fees)
|
|
·
RIA
Services “solicitor fees”
|
50%/50%
split with NIVM
|
|
·
RIA
Services TPA allowance
|
100%
NIVM
|
|
·
Ins.
Commission referral (inside NIVM)
|
30%
referral fee (1st
year revenue only) (i.e. VFE)
|
|
·
Ins.
Commission referral (outside NIVM)
|
50%/50%
split with NIVM (i.e. Xxxxxxxx)
|
|
·
TPA
overrides from Ins. Carrier
|
100%
NIVM
|
*Exception
for Brand Source case which is in progress. Installation allowance percentage
to
be increased as mutually agreed by Xx. Xxxxx and Xx. Xxxxxx.
8
EXHIBIT
A
Non-Recurring
Fringe Benefits
Auto
reimbursement in excess of IRS mileage rate
Cell
phones for spouses
Reimbursement
of Personal Disability Coverage
Reimbursement
of Personal Long Term Care Insurance
Club
Dues
Key
Man
Insurance
Exotic
Travel
9
