EXHIBIT 10.48
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is effective the 28th day of March, 2005, by and
between CERES GROUP, INC., a Delaware corporation, referred to in this Agreement
as "Employer," and XXXX X. XXXXXXXXXXX referred to in this Agreement as
"Employee."
RECITALS:
Employer is engaged in the insurance business and maintains its main
corporate office in the City of Strongsville, Ohio; and
Employer wished to employ Employee, and Employee wishes to be employed by
Employer on the terms, covenants and conditions set forth in this Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
Employer hereby employs Employee and Employee hereby accepts such
employment upon the terms, covenants and conditions hereinafter set forth.
1. SERVICES. Employer shall employ Employee as Executive Vice President
and Chief Actuary, solely subject to the supervision and pursuant to
the assignments, advices and directions of Employer. Employee's duties
and responsibilities shall include duties and responsibilities as are
customarily performed by one holding such a position for Employer
and/or other similar businesses or enterprises.
Employee shall devote all Employee's time, attention, knowledge, and
skill solely and exclusively to the business and interest of Employer,
and Employer shall be entitled to all of the benefits, emoluments,
profits or other issues arising from or incident to any and all work,
services and advice of Employee, and Employee expressly agrees that
during the term of this Agreement, Employee will not be interested,
directly or indirectly, in any form, fashion or manner, as partner,
officer, director, 5% or more stockholder, advisor, employee or in any
other form or capacity, in any other business similar to Employer's
business or any allied trade. However, this will not preclude Employee
from engaging in personal, civic, cultural, charitable or religious
activities that do not interfere with the performance of Employee's
duties and responsibilities hereunder, that do not adversely impact
Employer and that are not in conflict with the above.
Employee represents and warrants to Employer that his employment
hereunder and compliance with the terms and conditions of this
Agreement will not conflict with or result in the breach of any
agreement or obligation to which he is a party or may be bound.
2. TERM AND TERMINATION. The duration of employment pursuant to this
Agreement shall be for a period of two (2) years, commencing on March
28, 2005 through March 29, 2007; provided, however, that this
Agreement shall automatically renew for succeeding one (1) year terms,
unless the Employer
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provides Employee with at least sixty (60) days' advance written
notice that this Agreement and Employee's employment shall terminate
as of the close of business on March 29 of the then-current original
or renewal termination date (as the case may be).
TERMINATION WITHOUT CAUSE. Regardless of any provisions of this
Agreement to the contrary, or which could be construed to the
contrary, in the event that (a) Employer chooses to terminate this
Agreement upon sixty (60) days' advance written notice prior to the
end of the initial term or then-current renewal term, (b) Employee's
annual salary is reduced, or (c) Employee shall leave the employment
of Employer at any time other than as a voluntary quit or for "cause"
(as defined below) or Employee's employment is terminated in
connection with a "change of control" (as defined below), this
Agreement shall terminate and Employee shall be entitled to severance
pay equal to twelve (12) months of Employee's then-current annual
salary (less normal administrative deductions), payable in twelve (12)
equal monthly installments. Such payments shall be in lieu of any
other payments from Employer, including, without limitation, severance
or termination payments contained herein or otherwise and Employer
shall have no further liability or obligation to Employee for
compensation or benefits.
"CHANGE OF CONTROL." In the event that Employee's employment is
terminated in connection with a "change of control" of Employer,
Employee shall be entitled to receive cash compensation equal to
twenty-four (24) months of Employee's then-current annual salary (less
normal administrative deductions), payable in lump sum within thirty
(30) days of such "change of control." Such payment shall be in lieu
of any other payments from Employer, including, without limitation,
severance or termination payments contained herein or otherwise and
Employer shall have no further liability or obligation to Employee for
compensation or benefits.
"Change of control" shall mean the occurrence of any of the following
events:
(i) a tender offer shall be made and consummated for the
ownership of 50.1% or more of the outstanding voting
securities of Employer;
(ii) Employer shall be merged or consolidated with another
corporation and, as a result of such merger or
consolidation, less than 50.1% of the outstanding voting
securities of the surviving or continuing corporation
shall be owned in the aggregate by the former
stockholders of Employer as the same shall have existed
immediately prior to such merger or consolidation; or
(iii) Employer shall sell substantially all of its operating
assets to another corporation which is not a
wholly-owned subsidiary;
(iv) a person, within the meaning of Section 3(a)(9) or of
Section 13(d)(3) (as in effect on the date hereof) of
the Exchange Act shall acquire, other than by reason of
inheritance, (50.1%) or more
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of the outstanding voting securities of Employer
(whether directly, indirectly, beneficially or of
record).
In determining whether a Change of Control has occurred,
gratuitous transfers made by a person to an affiliate of such
person (as determined by the Board of Directors of Employer),
whether by gift, devise or otherwise, shall not be taken into
account. For purposes of this Agreement, ownership of voting
securities shall take into account and shall include ownership
as determined by applying the provisions of Rule
13d-3(d)(1)(i) as in effect on the date hereof pursuant to the
Exchange Act."
TERMINATION FOR "CAUSE." Notwithstanding any other provisions of this
Agreement to the contrary, Employee's employment and this Agreement
may be terminated by the Employer at any time without further
compensation or severance pay or fringe benefits for "cause."
For purposes of this paragraph, "cause" shall mean if Employee (a) has
refused, failed or neglected to perform duties or render services
hereunder or has performed or rendered them incompetently; (b) has
been dishonest or committed a fraud or breach of trust or engaged in
illegal or wrongful conduct substantially detrimental to the business
or reputation of Employer; (c) has developed or pursued interests
substantially adverse to Employer; (d) has been charged with, indicted
for, or convicted of, a crime that constitutes a felony; or (e) has
otherwise materially breached this Agreement.
If, in the opinion of the Board of Employer, Employee's employment
shall become subject to termination for "cause," the Board shall give
Employee written notice to that effect which notice shall describe the
matter or matters constituting such "cause." In the case of clauses
(b) and (d) above, such notice shall constitute notice of termination
of Employee's employment and Employee's employment will terminate
immediately. In the case of clauses (a), (c) and (e) above, if, within
15 days of receipt of such notice, Employee has not substantially
eliminated, resolved or cured each such matter or matters to the
satisfaction of the Board in its sole discretion, then Employer shall
have the right to give Employee notice that Employee's employment will
terminate immediately.
VOLUNTARY QUIT. Notwithstanding any other provision of this Agreement,
Employee shall have the right to voluntarily quit Employee's
employment and terminate this Agreement by giving sixty (60) days'
advance written notice to Employer at the address provided herein.
Notwithstanding any other provision of this Agreement, if Employee
shall so voluntarily quit and terminate this Agreement, Employer shall
have no further obligations pursuant to the terms of this Agreement,
except to pay to Employee accrued salary to the date of termination.
In the event Employee voluntarily terminates his employment with
Employer during the first twelve (12) months of employment, Employee
shall reimburse Employer, on a pro rata basis, all relocation benefits
previously paid to him.
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Employee will also reimburse Employer, on a pro rata basis, the amount
of Employee's Signing Bonus, as defined in Section 3.
3. COMPENSATION.
BASE COMPENSATION. During this Agreement, Employer shall pay Employee
(according to Employer's normal payroll procedures) and Employee
agrees to accept from Employer, in full payment for services under
this Agreement, a salary set by the Board of Directors and Employee
shall receive annual reviews and merit increases. Employee's initial
salary shall be $275,000 per annum.
SIGNING BONUS. Upon execution of this Agreement, Employer shall pay
Employee a one-time signing bonus of $50,000.00 (the "Signing Bonus").
BONUSES. Employee shall also participate in Employer's bonus plan for
officers or such other incentive compensation or plans as may be
established by the Board of Directors of Employer (the "Officer Bonus
Plan"). Employee's bonus shall be payable as soon as it reasonably can
be determined. Notwithstanding the foregoing, Employee shall be
entitled to defer the receipt of his salary and/or bonus pursuant to
procedures adopted or plans maintained by Employer.
EXPENSES. Employer agrees that it will reimburse Employee for any and
all necessary, customary and usual business expenses incurred by
Employee, subject to Employer's then-current policies regarding such
expenses.
BENEFITS. In addition to the above salary and reimbursement, Employee
shall be provided all fringe benefits on the same basis that Employer
normally provides to a regular full-time employee holding Employee's
position with Employer, including, but not limited to, health/dental
insurance, life insurance, holidays, paid time off ("PTO") (etc.).
Employee will be entitled to five (5) weeks of PTO per year.
4. COVENANTS.
NON-DISCLOSURE. During Employee's employment by Employer, Employee
will enjoy access to Employer's "confidential information" and "trade
secrets." For the purposes of this Agreement, "confidential
information" shall mean information which is not publicly available
including, without limitation, information concerning customers,
material sources, suppliers, financial projections, marketing plans
and operation methods, Employee's access to which derives solely from
Employee's employment with Employer. For purposes of this Agreement,
"trade secrets" shall mean Employer's processes, methodologies and
techniques known only to those employees of Employer who need to know
such secrets in order to perform their duties on behalf of Employer.
Employer takes numerous steps, including these provisions, to protect
the confidentiality of its confidential information and trade secrets,
which it considers unique, valuable and special assets.
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Employee, recognizing Employer's significant investment of time,
effort and money in developing and preserving its confidential
information and trade secrets, shall not, during his employment
hereunder and for a period of three (3) years after the end of
Employee's employment hereunder, use for his direct or indirect
personal benefit any of Employer's confidential information or trade
secrets. During the term of this Agreement and for a period of three
(3) years after the end of Employee's employment hereunder, Employee
shall not disclose to any person any of Employer's confidential
information or trade secrets.
NON-COMPETITION. During Employee's employment hereunder and, in the
event of a change of control or termination of Employee's employment
for any reason other than (i) for "cause" (under Section 2) or (ii) a
voluntary quit, for a period of one (1) year, Employee shall not
engage, directly or indirectly, whether as an owner, partner,
employee, officer, director, agent, consultant or otherwise, in any
location where Employer or any of its subsidiaries is engaged in
business after the date hereof and prior to the termination of
Employee's employment, in a business the same or similar to, any
business now, or at any time after the date hereof and prior to
Employee's termination, conducted by Employer or any of its
subsidiaries, provided, however, that the mere ownership of 5% or less
of the stock of a company whose shares are traded on a national
securities exchange or are quoted on the National Association of
Securities Dealers Automated Quotation System shall not be deemed
ownership which is prohibited hereunder.
NON-SOLICITATION. Employee agrees that regardless of any termination
of this Agreement, during or at the end of this Agreement or any
renewal thereof, Employee will not, for a period of one (1) year
thereafter, (i) hire, retain or recruit any of Employer's insurance
agents for the purpose of performing services for Employee or another
insurance company, or (ii) contact or solicit, directly or indirectly,
any person, firm or entity connected with Employer, including its
customers or clients, for the purpose of diverting work or business
from the Employer.
No termination of this Agreement shall terminate the rights and
obligations of the parties under this Section, but such rights and
obligations shall serve such termination in accordance with the terms
of this Section.
5. NON-DISPARAGEMENT. Following the termination of this Agreement for any
reason, Employee hereby agrees and acknowledges that Employee will
continue to have a duty of loyalty to Employer, and to the officers,
directors, shareholders and employees of Employer, and in recognition
of that duty of loyalty, Employee agrees that Employee shall not
indulge in any conduct which may reflect adversely upon, nor make any
statements disparaging of, Employer, or the officers, directors,
shareholders or employees of Employer.
6. REMEDIES. Employee agrees that the remedy at law for any violation or
threatened violation by Employee of Sections 4 and 5 will be
inadequate and that, accordingly, Employer shall be entitled to
injunctive relief in the event of a violation or threatened violation
without being required to post bond or other surety. The foregoing
remedies shall be in addition to, and not in limitation of,
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any other rights or remedies to which Employer is or may be entitled
at law, or in equity, or under this Agreement.
7. DEATH. Notwithstanding any other provisions of this Agreement, this
Agreement shall be deemed automatically terminated upon death of the
Employee. In such event, Employer shall pay to Employee's personal
representative or executor any compensation accrued but unpaid as of
such date. Upon the payment of such accrued compensation, Employer
shall have no further obligations under this Agreement, including, but
not limited to, an obligation to pay a salary, severance or
termination pay or any other form of compensation, or to provide any
further fringe benefits of any kind or nature.
8. ENTIRE AGREEMENT. This written Agreement contains the sole and entire
agreement between the parties and shall supersede any and all other
agreements, whether oral or written, between the parties. The parties
acknowledge and agree that neither of them has made any representation
with respect to the subject matter of this Agreement or any
representations inducing its execution and delivery, except such
representations as are specifically set forth in this writing, and the
parties acknowledge that they have relied on their own judgment in
entering into the same. The parties further acknowledge that any
statements or representations that may have been made by either of
them to the other are void and of no effect and that neither of them
has relied on such statements or representations in connection with
its dealings with the other.
9. CONFIDENTIALITY. The terms of this Agreement are to be confidential,
and Employee shall disclose its terms only to Employee's attorney, tax
advisor and/or spouse, if any, subject to disclosure that may be
necessary to comply with applicable law or in the event of a dispute
leading to mediation and/or arbitration.
10. WAIVER/MODIFICATION. It is agreed that no waiver or modification of
this Agreement or of any covenant, condition or limitation contained
in it shall be valid unless it is in writing and duly executed by the
party to be charged with it, and that no evidence of any waiver or
modification shall be offered or received in evidence in any
proceeding, arbitration or litigation between the parties arising out
of or affecting this Agreement, or the rights or obligations of any
party under it, unless such waiver or modification is in writing, duly
executed as above. The parties agree that the provisions of this
paragraph may not be waived, except by a duly executed writing.
11. ARBITRATION. If a dispute of any kind arises from or relates in any
manner to this Agreement or the breach thereof, and if such dispute
cannot be settled through direct discussions, the parties agree to
endeavor to first settle the dispute in an amicable manner by
mediation administered by and through the American Arbitration
Association in accordance with its Commercial Mediation Rules before
resorting to arbitration. Thereafter, any unresolved controversy or
claim arising from or relating to this Agreement or breach thereof
shall be settled by arbitration administered by and through the
American Arbitration Association in accordance with its Commercial
Arbitration Rules, provided however that only one arbitrator shall be
appointed, which arbitrator shall be an attorney licensed in
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the State of Ohio or an active or retired judge, having experience in
employment contracts, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
12. GOVERNING LAW. The parties agree that it is their intention and
covenant that this Agreement be construed in accordance with and under
and pursuant to the laws of the State of Ohio.
13. SUCCESSORS AND ASSIGNS. Employee may not assign any rights or
obligations under this Agreement without the prior written consent of
Employer. This Agreement shall be binding upon and inure to the
benefit of Employee and his lawful heirs, guardians, executors,
administrators, and permitted successors and assigns.
Employer may not assign any rights or obligations under this Agreement
without the prior written consent of Employee except to the surviving
corporation in connection with a merger or consolidation involving
Employer or to the purchaser of assets in connection with a sale of
all or substantially all of its assets, so long as the assignee
expressly assumes Employer's rights or obligations. This Agreement
shall be binding upon and inure to the benefit of Employer and its
permitted successors and assigns.
This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this
Agreement, except as provided in this Section 13.
14. RETURN OF PROPERTY. Upon termination of this Agreement for any reason,
Employee shall immediately return any property of Employer, including,
but not limited to, any equipment, credit cards, advertising
materials, booklets, training guides or any other such similar
information, materials or documents that Employee has in Employee's
possession or control; provided, however, that Employee shall be
allowed to keep copies of documentation required to be maintained by
law or regulation.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original
but all of which together will constitute one and the same instrument.
16. SEVERABILITY. If any clause, paragraph, or section of this Agreement
be held invalid or unenforceable, the remaining provisions of this
Agreement shall not be affected thereby and shall be valid and remain
enforceable to the extent permitted by law. Moreover, if any one or
more of the provisions in this Agreement shall for any reason by held
to be excessively broad as to duration, geographical scope, activity,
or subject, it shall be construed by limiting and reducing it, so as
to be enforceable to the extent compatible with then applicable law.
17. NOTICES: All notices required to be provided under the terms of this
Agreement shall be sent by United States mail, certified, return
receipt requested, and to the following addresses:
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TO EMPLOYER:
Ceres Group, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxx 00000
TO EMPLOYEE:
Xxxx Xxxxxxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxx Xxxx, Xxxxx 00000
ACKNOWLEDGMENT BY EMPLOYEE: BY SIGNING THIS AGREEMENT, I AFFIRM THAT I
HAVE CAREFULLY READ AND CONSIDERED ALL OF THE TERMS AND CONDITIONS OF
THIS AGREEMENT AND THAT SUCH TERMS AND CONDITIONS ARE UNDERSTOOD,
ACCEPTED AND AGREED.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EMPLOYER: EMPLOYEE:
CERES GROUP, INC. XXXX X. XXXXXXXXXXX
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxxxxxx
------------------------------ ---------------------------------
Printed Name: Xxxx X. Xxxxxxx Printed Name: Xxxx X. Xxxxxxxxxxx
Its: Executive Vice President
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