SENIOR MANAGEMENT AGREEMENT BY AND BETWEEN BENEFICIAL INSURANCE SERVICES, LLC AND ROBERT J. BUSH
Exhibit
10.11
BY
AND
BETWEEN
BENEFICIAL
INSURANCE SERVICES, LLC
AND
XXXXXX
X.
XXXX
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TERM
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SECTION
REFERENCED
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“AAA”
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Section
12.2
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“Affiliate”
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Section
1.1
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“Agreement”
|
Introduction
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“Average
Monthly Variable Compensation”
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Section
2.3(b)
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|
“Asset
Purchase Agreement
|
Background
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“Base
Salary”
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Section
2.1
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“Board”
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Section
1.1
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“Business”
|
Background
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“Cause”
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Section
1.4
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“Company”
|
Introduction
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“Confidential
Information”
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Section
5
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“Effective
Date”
|
Introduction
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“Employer
Group”
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Section
3.1
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“Employer
Group Member”
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Section
3.1
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“Employment
Discrimination”
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Section
12.2
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“Employment
Period”
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Section
1.2
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“Employment
Rules”
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Section
12.2
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“the
Executive”
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Introduction
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“Good
Reason”
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Section
1.5(b)
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“Xxxxxx”
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Background
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“Initial
Period”
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Section
1.2
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“Permanent
Disability”
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Section
1.4
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“Permitted
Investments”
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Section
4
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“Restrictive
Covenants”
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Section
12.1
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“Severance
Period”
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Section
2.3(b)
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“Territory”
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Section
4
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“Variable
Compensation”
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Section
2.2
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“Work
Product”
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Section
8
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SENIOR
MANAGEMENT AGREEMENT (the “Agreement”),
dated
as of January
14, 2005, (the “Effective
Date”)
by and
among Beneficial Insurance Services, LLC (the “Company”),
Beneficial Mutual Savings Bank (“BSB”), solely as its obligations relate to
Section 14 hereof, and Xxxxxx X. Xxxx (the “Executive”).
BACKGROUND
A. The
Company is a wholly-owned subsidiary of BSB. This Agreement is being entered
into in connection with the Asset Purchase Agreement dated as of January 14,
2005, by and among the Company, Xxxx Xxxxxx & Co., Inc. (“Xxxxxx”)
and
the shareholders of Xxxxxx (the “Asset
Purchase Agreement”).
Prior
to the date hereof, Xxxxxx acted as a full-service independent insurance agent
and broker providing property, casualty, life, health benefit and financial
services products to businesses, organizations and individuals in the United
States, principally in Pennsylvania, New Jersey and Delaware (the “Business”).
Pursuant to the Asset Purchase Agreement, the Company has acquired substantially
all of the assets of Xxxxxx.
B. The
Company desires to engage the Executive as its President as of the Effective
Date, and the Executive desires to be so engaged by the Company, as set forth
herein.
TERMS
NOW,
THEREFORE, in consideration of the premises, the mutual covenants of the parties
hereinafter set forth and other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto hereby agree as follows:
PROVISIONS
RELATING TO EMPLOYMENT
1. Employment.
1.1. Engagement;
Duties and Powers.
The
Company shall employ the
Executive, and the Executive hereby accepts employment with the Company, as
President for the Employment
Period (as defined below), in accordance with the terms and conditions of this
Agreement. During the Employment Period, the Executive shall have such
responsibilities, duties and authority as are customarily assigned to such
position and shall render such services of an executive and administrative
character or act in such other capacity for the Company and its Affiliates
(as
defined below), as the Company’s board of managers (the “Board”)
may
direct, and report to such persons as the Board may from time to time direct.
The Executive shall perform
the duties and carry out the responsibilities assigned to the Executive, to
the
best of the Executive’s ability, in a trustworthy, businesslike and efficient
manner for the purpose of advancing the business of the Company and
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shall
comply with the Company’s policies and procedures. The Executive acknowledges
that the Executive’s duties and responsibilities hereunder will require the
Executive’s full business time and effort and agrees that, during the Employment
Period, the Executive will not engage in any other business activity or have
any
business interests which may conflict with or impair the performance of any
of
the Executive’s duties hereunder except that the Executive may engage in (a)
activities or interests as set forth on Schedule 1.1, (b) activities in
connection with
the
winding down of the Business or (c) activities or
interests approved by the prior written consent of the Company, which consent
the Company may withhold in its sole and absolute discretion, in each case
of
clauses (a) through (c) inclusive, to the extent that such activities do not
interfere with the Executive’s duties hereunder. The Executive
represents and
warrants that the Executive is not bound by any agreements or other business
commitments that would in any manner limit the Executive’s work, effort or
activity on behalf of, and while employed by, the Company. “Affiliate” means,
with respect to any person or entity, any other person or entity directly or
indirectly controlling, controlled by, or under common control with such person
or entity.
1.2. Employment
Period.
The
engagement of the Executive under this Agreement shall begin on the Effective
Date and shall continue through and until the second anniversary of the
Effective Date (the “Initial
Period”).
Commencing
on the second anniversary of the Effective Date, the Executive’s employment with
the Company will be “at will.” The Initial Period and any period during which
the Executive is employed by the Company on an “at will”
basis is hereinafter referred to as the “Employment
Period.”
Notwithstanding anything to the contrary contained herein, the Employment Period
is subject to termination pursuant to Sections
1.3, 1.4, and 1.5.
1.3. Termination
Upon Death.
If the
Executive dies during the Employment Period, this Agreement and the Executive’s
employment shall automatically terminate on the date of the Executive’s
death.
1.4. Termination
by the Company. The
Company may terminate this Agreement and the Executive’s employment hereunder
upon written notice to the Executive at any time (i) due to the Permanent
Disability (as defined below) of the Executive or (ii) for Cause (as defined
below).
For
purpose of this Agreement, “Cause”
means
the occurrence of any of the
following events, as determined in the good faith judgment of the
Board:
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(i)
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the
failure of the Executive to perform the Executive’s duties or comply with
reasonable directions of the Board (other than as a result of physical
or
mental illness or injury)
that continues for 10 days after the Board has given
written notice to the Executive specifying in reasonable detail the
manner
in which the Executive has failed to perform such duties or comply
with
such directions;
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(ii)
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Commission
by the Executive of (a) a felony, (b) an act or omission constituting
dishonesty, disloyalty, moral turpitude or professional misconduct
with
respect to the Company or its Affiliates, (c) an act or omission
(I)
constituting fraud against the Company or its Affiliates or (II)
indicating a violation of law, regulation or ordinance applicable
to the
Company, its Affiliates or the Business, in the case of clause (II)
to the
extent such act or omission materially and adversely affects the
Company;
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(iii)
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commission
by the Executive of an act or omission that adversely affects, or
could
reasonably be expected to adversely affect, the Company’s business or
reputation, or indicates alcohol abuse or illegal drug use by the
Executive, which act or omission continues for 10 days after
the Board has given written notice to the Executive of
such act or omission;
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(iv)
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the
material breach, non-performance or non-observance of any of the
terms of
this Agreement (other than a breach, non-performance or non-observance
described in clause (v)) of this Section
1.4
or
any other agreement (other than the
Asset Purchase Agreement) to which the Executive and
any of the Company or its Affiliates are parties, by the Executive,
if
such breach, non-performance or non-observance shall continue beyond
a
period of 10 days immediately after notice thereof by the Company
to the
Executive;
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(v)
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any
breach, non-performance or non-observance of Section
4, 5, 6, 7, 8 or 9
of
this Agreement; or
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(vi)
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the
existence of any legal or contractual limitation on the Executive’s
ability to engage in the Business that reasonably could be expected
to
have a material adverse effect on the Executive’s ability to attract or
retain clients or perform services
hereunder.
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The
Executive shall be deemed to have a “Permanent Disability”
if
a
physician selected by the Board, who is reasonably acceptable to the Executive,
and located in the Philadelphia, Pennsylvania metropolitan area, determines
that
the Executive has been unable to perform, by reason of physical or mental
incapacity, the Executive’s duties or obligations under this Agreement even with
reasonable accommodation, for either (a) a total period of 60 continuous
days or (b) a total period of 90 days in any 360 day period.
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1.5. Termination
by the Executive.
(a) The
Executive may terminate the Executive’s employment hereunder at any time and for
any or no reason. Furthermore, the Executive may terminate the Executives’
employment hereunder for Good Reason. The Executive shall give 30 days prior
written notice to the Company prior to the effectiveness of any resignation
of
the Executive’s employment with the Company, and such resignation shall not be
effective until the expiration of such notice period, unless such notice is
waived by the Company (in which case such resignation shall be effective as
of
the date of such waiver).
(b) For
purposes of this Agreement, the term “Good
Reason”
shall
mean (i) any substantial change by the Company in the Executive’s functional
area of responsibility, such that the Executive’s skills and experience would be
of limited applicability to such new responsibilities, which change is not
consented to by the Executive or (ii) a change in the Company’s business
location to a new location that is more than twenty (20) miles from Xxxxxx’x
principal offices prior to the date of this Agreement, which relocation is
not
consented to by the Executive or (iii) a failure by the Company to make payments
hereunder to the Executive when due, which failure continues for 10 days after
the Executive has provided written notice to the Company of such failure;
provided, that the Executive’s consent to any event which would otherwise
constitute “Good Reason” shall be conclusively presumed if the Executive does
not exercise his or her rights hereunder within 30 days of the
event.
2. Compensation
and Benefits.
2.1. Base
Salary.
During
the Employment Period, the Company shall pay the Executive an annual base salary
of $90,000.00 (the “Base
Salary”),
payable in accordance with the Company’s customary payroll practices as in
effect from time to time.
2.2. Variable
Compensation.
The
Executive shall earn variable compensation
in
accordance with the commission schedule set forth on Exhibit
A
hereto,
payable and reconciled quarterly in accordance with Xxxxxx’x past customary
payroll practices.
2.3. Compensation
After Termination.
(a) If
the
Executive is terminated by the Company for Cause or due to the Executive’s
Permanent Disability, if the Executive resigns, other than for Good Reason,
or
if the Executive’s employment terminates due to the Executive’s death, then,
except as required by law, the Company shall have no further obligations
hereunder with respect to the Executive’s employment hereunder from and after
the date of such termination (except payment of the Base Salary accrued through
the date of such termination and expenses pursuant to Sections
2.4(b) and 2.4(c)
hereof),
and the Company shall continue to have all other rights available hereunder
(including, without limitation, all rights under the Restrictive Covenants
at
law or in equity).
(b) Subject
to Sections
13.2
and
13.14
hereof,
if, during the Initial Period, the Executive terminates the Executive’s
Employment for Good Reason, the Executive
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shall
be
entitled to receive as severance pay an amount equal to the aggregate of the
Base Salary that would otherwise have been payable if the Executive continued
the Executive’s employment period hereunder for the Initial Period. In addition,
the Executive shall be entitled to receive Variable Compensation equal to the
number of calendar months remaining from the date of termination until
expiration of the Initial Term multiplied by the Average Monthly Variable
Compensation. The “Average
Monthly
Variable Compensation”
shall
mean the Variable Compensation received by the Executive during the 12 month
period preceding the Executive’s termination divided by 12. The amounts set
forth in this Section
2.3(b)
shall be
payable in accordance with the Company’s customary payroll practices as in
effect from time to time, and otherwise in accordance with the Company’s
policies that would otherwise apply to the payment of the Base Salary;
provided
all such
rights to any payments shall cease in the event the Company determines in good
faith that the Executive has violated any Restrictive Covenants (as defined
below). The Company shall, except as required by law, have no other obligations
hereunder or otherwise with respect to the Executive’s employment from and after
the termination date, and the Company shall continue to have all other rights
available hereunder (including, without limitation, all rights under the
Restrictive Covenants at law or in equity).
2.4. Fringe
Benefits; Incentive Compensation; Retirement; Welfare Benefits;
Expenses.
(a) During
the Employment Period, the Executive shall be eligible to participate in any
fringe benefit, retirement, and health and welfare benefit plans, policies,
or
arrangements maintained by the Company for its key management employees
generally from time to time in accordance with such plans, policies, or
arrangements as from time to time are in effect and applicable to key management
employees of the Company.
(b) During
the Employment Period, the Company shall reimburse the Executive for all
ordinary, necessary and reasonable travel and other business expenses incurred
by the Executive in connection with the performance of the Executive’s duties
hereunder, in accordance with Company policy. Such reimbursement shall be made
upon presentation of itemized expense statements and such other supporting
documentation as the Company may reasonably require; provided, however,
subject
to the terms and conditions of the Company’s reimbursement policy, the Company
shall reimburse, within five business days of the date of termination of the
Executive’s employment with the Company for any reason whatsoever or, if later,
the date the Executive submits the Executive’s request for reimbursement, the
Executive pursuant to this Section
2.4(b)
for
reasonable expenses incurred but not paid prior to such termination of
employment.
(c) For
each
month during the Employment Period, the Company shall pay the Executive $700
per
month in connection with car expenses the Executive incurs in connection with
the Executive’s duties hereunder.
2.5. Taxes.
All
compensation payable to the Executive from the Company or its
Affiliates shall be subject
to all applicable withholding taxes, normal payroll withholding and any other
amounts required by law to be withheld.
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PROVISIONS
RELATING TO RESTRICTIVE COVENANTS
3. General
Provisions.
3.1. Executive’s
acknowledgment.
The
Executive agrees and acknowledges that
in
order to assure the Company and its Affiliates (each, an “,Employer
or Group Member,”
and
collectively, the “Employer
Group”)
that
they will retain its value and that of the Business as a going concern, it
is
necessary that the Executive undertake not to utilize the Executive’s special
knowledge
of the Business and the Executive’s relationships with customers to compete with
any Employer
Group Member. The Executive acknowledges that in connection with the Asset
Purchase Agreement, the Executive entered into a Non-competition,
Non-Solicitation and Confidentiality
Agreement (the “Non-Competition
Agreement”),
which
agreement contains
provisions restricting the Executive’s ability to compete with the Business, and
that the Executive is receiving separate consideration under such agreement.
The
Executive further acknowledges that:
(a) the
Executive is engaged in, is knowledgeable about, and provides services in
connection with all aspects of the Business;
(b) the
Executive will occupy a position of trust and confidence with the
Company, and during the Employment Period, the Executive will become familiar
with the
Employer
Group’s trade secrets and with other proprietary and Confidential Information
concerning the Employer Group and the Business;
(c) the
Restrictive Covenants (as defined below) are essential to protect the Employer
Group and the goodwill of the Business and compliance with the Restrictive
Covenants will not impair the Executive’s ability to procure subsequent
employment at a comparable compensation level;
(d) the
Executive’s employment with the Company has special, unique and extraordinary
value to the Employer Group and each Employer Group Member would be irreparably
damaged if the Executive were to violate the provisions of Sections
4, 5, 6, 7, 8, 9 and 10
of this
Agreement; and
(e) The
provisions contained in Sections
4,
5,
6,
7, 8, 9 and 10
are
integral to the Asset Purchase Agreement and that the Company would not enter
into the transaction
contemplated by the Asset Purchase Agreement without the protections afforded
by Sections
4, 5, 6, 7, 8, 9 and 10.
3.2. Blue-Pencil.
If any
court of competent jurisdiction shall at any time deem the
term
of
any Restrictive Covenant too lengthy, the Territory too extensive or the scope
or subject matter of any Restrictive Covenant exceeds the limitations imposed
by
applicable law, the parties agree that applicable provisions shall be amended
to
the minimum extent necessary such that the provision is enforceable or
permissible by such applicable law.
4. Non-Compete.
During
the Employment Period and for a period of two (2) years
after
the termination of the Executive’s employment with the Company for any reason
whatsoever, the Executive shall not, directly or indirectly, as employee, agent,
consultant, equityholder, director,
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manager,
co-partner or in any other individual or representative capacity, own, operate,
manage, control, engage in, invest in or participate in any manner in, act
as a
consultant, advisor or lender to, render services for (alone or in association
with any Person), or otherwise assist any Person that engages in or owns,
invests in, operates, manages or controls any venture or enterprise that
directly or indirectly engages or proposes to engage anywhere in Pennsylvania,
New Jersey or Delaware (the “Territory”)
in the
Business or any business similar to, or competitive with, the Business or the
business of the Company at the time of the termination of the Executive’s
employment, unless the Board expressly and in its sole discretion waives in
writing the Executive’s compliance with this Section
4;
provided, however, that nothing
contained herein shall be construed to prevent the Executive from investing
in
the stock
of any
competing corporation listed on a national securities exchange or traded in
the
over-the-counter market so long as the Executive is not involved in the business
of said corporation and the Executive does not own more than one percent (1%)
of
the stock of such corporation (a “Permitted
Investment”).
With
respect to the Territory, the Executive specifically acknowledges that the
Business has heretofore been conducted throughout the states of Pennsylvania,
New Jersey and Delaware.
5. Confidential
Information.
During
the Employment Period and thereafter, the Executive shall keep secret and retain
in strictest confidence, and shall not, without the prior written consent of
the
Board, furnish, make available or disclose
to any
third
party or use for the benefit of himself or herself or any third party, any
Confidential Information. “Confidential Information”
shall
mean any trade secret or information relating to the business or affairs of
any
Employer Group Member or the Business, including, without limitation,
information relating to financial statements, customer identities, potential
customers, employees, suppliers, potential acquisition targets, servicing
methods, equipment, programs, strategies and information, analyses, profit
margins or other proprietary information used by any Employer Group Member
in
connection with the Business; provided, however, that Confidential Information
shall not include any information that is in the public domain or becomes known
in the public domain through no wrongful act on the part of the Executive.
The
Executive shall deliver to the Company at the termination of the Executive’s
employment, or at any other time any Employer Group Member may request, all
memoranda, notes, plans, records, reports and other documents or
materials, in any medium, (and copies thereof) relating to the Business or
the
Employer Group
or other
forms of Confidential Information which the Executive may then possess or have
under the Executive’s control, as well as any property of any Employer Group
Member in the Executive’s possession or control.
6. Interference
with Relationships.
During
the Employment Period and for a period
of five
(5) years after termination of Executive’s employment with the Company for any
reason whatsoever, the Executive shall not, directly or indirectly, as employee,
agent, consultant, stockholder, director, co-partner or in any other individual
or representative capacity without the prior written consent of the Board:
(i)
recruit, hire or solicit for employment or engagement, or assist, encourage
or
suggest to any other person to recruit, hire or solicit for employment or
engagement, any person who is (or was within 12 months of the date such
solicitation commences or occurs, as the case may be) employed or engaged by
any
Employer Group Member, or otherwise seek to influence or alter any such person’s
relationship with such Employer Group Member, or (ii) solicit, contact, or
attempt to solicit or contact, or assist, encourage or suggest to any other
person to solicit, contact or attempt to solicit or contact, or conduct business
with (A) any client or customer doing business with any Employer Group Member,
as of the date of the termination of the Executive’s employment or within the
two year period prior to such termination, with whom or
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which
the
Executive had any contact or involvement during the Executive’s employment with
the Company; or (B) any prospective client or customer of any Employer Group
Member whom or which is a prospective client of such Employer Group Member
as of
the date of the termination of the Executive’s employment and with whom or which
the Executive had any contact or involvement during the Executive’s employment
with the Company.
7. Business
Disparagement.
The
Executive shall not, directly or indirectly, make disparaging remarks about
any
Employer Group Member, their Affiliates or any of their respective directors,
officers or employees.
8. Intellectual
Property, Inventions and Patents.
The
Executive acknowledges that all discoveries, concepts, ideas, inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, patent applications, copyrightable work and mask work (whether or
not
including any Confidential Information) and all registrations or applications
related thereto, all other proprietary information and all similar or related
information (whether or not patentable) which relate to the Employer Group
Members’ actual or anticipated business, research and development or existing or
future products or services and which are conceived, developed or made by the
Executive (whether above or jointly with others) while employed by the Employer
Group and for a period of six (6) months after the termination of the
Executive’s employment with the Employer Group, whether before or after the date
of this Agreement (“Work
Product”),
belong
to the Employer Group. The Executive shall promptly disclose such Work Product
to the Company and, at the Company’s expense, perform all actions reasonably
requested by the Company (whether during or after the term of the Executive’s
employment with the Employer Group) to establish and confirm such ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments). Any copyrightable work falling within the definition of
Work
Product shall be deemed a “work made for hire” under the applicable copyright
laws to the maximum extent permitted under applicable copyright law, and
ownership of all rights therein shall vest in the Employer Group. To the extent
that any Work Product cannot be deemed to be a “work made for hire” under
applicable copyright law, the Executive hereby assigns and agrees to assign
to
the Employer Group all right, title and interest, including without limitation,
the intellectual property rights that the Executive may have in and to such
Work
Product. The Executive has identified and listed on Exhibit
C
attached
hereto all items of intellectual property that are or were owned by the
Executive or were written, discovered, made, conceived or first reduced to
practice by the Executive alone or jointly with another person prior to the
Executive’s employment under this Agreement and that relates to the Employer
Group Members’ business or actual or demonstrably anticipated research and
development of the Employer Group. If no such intellectual property is listed,
the Executive represents and warrants to the Employer Group that the Executive
does not now nor has the Executive ever owned, nor has the Executive developed,
any such intellectual property.
9. New
Employment.
During
the period described in Section 4, the Executive shall disclose
to the Company the name, address and description of business of any new employer
or business
affiliation, located within the Territory, within 10 days of the acceptance
of
such position. If the Executive fails to provide such notice, the period
described in Section 4 shall be extended by a period equal to the period of
nondisclosure.
10.
Legal
Processes.
If the
Executive is requested pursuant to, or required by, applicable
law, regulation or legal process to disclose any of the Confidential
Information, the Executive
will notify the Company immediately so that the Company may seek a protective
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order
or
other appropriate remedy. If no such protective order or other remedy is
obtained, or the
Company
waives compliance with the terms of Section
5,
the
Executive or the representative will furnish only that portion of the
Confidential Information which the Executive or the representatives are advised
in writing or orally by counsel to the Company is legally required and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Confidential Information.
MISCELLANEOUS
PROVISIONS
11.
Effect
on Termination.
If, for
any reason, the Executive’s employment with the Company shall terminate, then,
notwithstanding such termination, those provisions which must remain in effect
in order for the parties’ intent to be effectuated shall remain in full force
and effect.
12.
Remedies.
12.1. Non-Exclusive
Remedy for Restrictive Covenants.
The
Executive acknowledges and agrees that the covenants set forth in Sections
4, 5, 6, 7, 8, 9 and 10
of this
Agreement (collectively, the “Restrictive
Covenants”)
are
reasonable and necessary for the protection of the Employer Group Members’
business interests, that irreparable injury will result to the Employer Group
if
the Executive breaches any of the terms of the Restrictive Covenants,
and
that
in the event of the Executive’s actual or threatened breach or non-performance
of any of
the
Restrictive Covenants, the Employer Group will have no adequate remedy at law.
The Executive accordingly agrees that in the event of any actual or threatened
breach or non-performance by the Executive of any of the Restrictive Covenants,
each Employer Group Member shall be entitled to injunctive and other equitable
relief from any court of competent jurisdiction, without the necessity of
showing actual monetary damages or the posting of a bond or other security.
Nothing contained herein shall be construed as prohibiting any Employer Group
Member from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of damages.
12.2. Arbitration.
Except
with respect to the enforcement of the Restrictive Covenants, any controversy
or
claim arising out of or related to (i) this Agreement, (ii) the breach thereof,
(iii) the Executive’s employment with the Company or the termination of such
employment, or (iv) allegations of Employment Discrimination, shall be settled
by arbitration in Philadelphia, Pennsylvania before a single arbitrator
administered by the American Arbitration Association (“AAA”) under its National
Rules for the Resolution of Employment Disputes, effective as of January 1,
2001
(the “Employment
Rules”),
and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. References herein to any arbitration rule(s) shall
be construed as referring to such rule(s) as amended or renumbered from time
to
time and to any successor rules. Any such arbitration will proceed, if any
Employer Group Member so desires, on an expedited basis. References to the
AAA
include any successor organization. “Employment
Discrimination”
means
any claim of discrimination against or harassment of the Executive in connection
with the Executive’s employment with the Company or the termination of such
employment, including any discrimination or harassment prohibited under federal,
state or local statute or other applicable law, including the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964, the Employee
Retirement Income
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Security
Act of 1974, the Americans with Disability Act, the Family and Medical Leave
Act, the Fair Labor Standards Act, or any similar federal, state or local
statute.
13.
Miscellaneous.
13.1. Income
Tax Treatment.
The
Executive and the Company acknowledge that
it
is the intention of the Company to deduct all amounts paid under Sections
2.1, 2.2 and 2.3(b)
hereof
as ordinary and necessary business expenses for income tax purposes. The
Executive agrees and represents that the Executive will treat all amounts paid
hereunder as ordinary
income for income tax purposes, and should the Executive report such amounts
as
other
than
ordinary income for income tax purposes, the Executive will indemnify and hold
the Company harmless from and against any and all taxes, penalties, interest,
costs and expenses, including reasonable attorneys’ and accounting fees and
costs, which are incurred by Company directly or indirectly as a result
thereof.
13.2. General
Release.
The
Executive acknowledges and agrees that the Executive’s
right to receive severance pay and other benefits pursuant to Section
2.3(b) of
this
Agreement
is contingent upon the Executive’s compliance with the Restrictive Covenants and
the
Executive’s execution and acceptance of the terms and conditions of, and the
effectiveness of, a general release in a form substantially similar to that
attached hereto as Exhibit
B
(the
“Release”).
If
the Executive fails to comply with the Restrictive Covenants or if the Executive
fails to execute the Release or revokes the Release during the seven day period
following the Executive’s execution of the Release, then the Executive shall not
be entitled to any severance payments or other benefits to which the Executive
would otherwise be entitled under Section
2.3(b).
13.3. Assignment.
The
Executive may not assign any of the Executive’s rights or obligations hereunder
without the written consent of the Company. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by
or
on behalf
of
any of the parties hereto shall bind and inure to the benefit of the respective
successors
and
assigns of the parties hereto whether so expressed or not. In the event of
the
Executive’s death prior to completion by the Company of all payments due under
this Agreement, the Company shall make all such payments to the Executive’s
beneficiary or to the Executive’s estate as appropriate.
13.4. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition
or
invalidity and without invalidating the remainder of this
Agreement.
13.5.
Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and
the
same Agreement.
-
12 -
13.6. Descriptive-Headings;
Interpretation.
The
descriptive headings in this Agreement
are inserted for convenience of reference only and are not intended to be part
of or to
affect
the meaning or interpretation of this Agreement. Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular forms of nouns, pronouns,
and verbs shall include the plural and vice versa. Reference to any agreement,
document, or instrument means such agreement, document or instrument as amended
or otherwise modified from time to time in accordance with the terms thereof,
and if applicable hereof. The use of the words “include”
or
“including”
in
this
Agreement shall be
by way
of example
rather than by limitation. The use of the words “or,”
“either”
or
“any” shall
not
be exclusive.
13.7. Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been duly given if (i) delivered personally to the recipient,
(ii) sent to the recipient by reputable express overnight courier service
(charges prepaid), or (iii) telecopied to the recipient (with hard copy sent
to
the recipient by reputable overnight courier service (charges prepaid) that
same
day). Such notices, demands and other communications shall be sent to the
addresses indicated below:
To
the Company:
Beneficial
Insurance Services, LLC
000
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxx
Facsimile
number: 215.864.6097
With a copy to:
Xxxxxx
Xxxxxxxx LLP
000
Xxxxxx Xxxx
000
Xxxxxxx Xxxx
Xxxxxx,
XX 00000-0000
Attention:
Xxxxxx X.. Xxxxxxx, Esquire
Facsimile:
000.000.0000
If
to the Executive:
To
the
Executive’s address as reflected in the Company’s records
or
to
such other address or to the attention of such other person as the recipient
party shall have specified
by prior written notice to the sending party. Date of service of such notice
shall be (x) the
date
such notice is personally delivered, (y) one day after the date of delivery
to
the express overnight courier if sent by express overnight courier or (z) the
same day, if telecopied before 5:00 p.m. Philadelphia, PA time on a Business
Day, and otherwise on the next Business Day after the date of transmittal by
telecopy.
-
13 -
13.8. Background.
Background Section of this Agreement hereby incorporated and made part of this
Agreement.
13.9. Entire
Agreement.
Except
as otherwise expressly set forth herein, this Agreement, the Noncompetition
Agreement and the Asset Purchase Agreement set forth the entire understanding
of
the parties, and supersede and preempt all prior oral or written understandings
and agreements with respect to the subject matter hereof.
13.10. Governing
Law.
This
Agreement shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this
Agreement shall be governed by, the laws of the Commonwealth of Pennsylvania
without giving effect to provisions thereof regarding conflict of
laws.
13.11. Jurisdiction.
Without
limiting the provisions of Section
12.2
hereof,
each party hereby irrevocably submits to the exclusive jurisdiction of the
United States District Court for the Eastern District of Pennsylvania located
in
Philadelphia, PA or the Pennsylvania State Court located in Philadelphia, in
respect of any claim relating thereto, and hereby waives, and agrees not to
assert, as a defense in any action, suit or proceeding in which any such claim
is made
that
it is not subject thereto or that such action, suit or proceeding may not be
brought or is not
maintainable in such courts or that the venue thereof
may not be appropriate or that this Agreement may not be enforced in or by
such
courts.
13.12. No
Strict Construction.
The
language used in this Agreement will be deemed
to
be the language chosen by the parties hereto to express their mutual intent,
and
no rule
of
strict construction will be applied against
any party hereto.
13.13. Amendment
and Waivers.
Any
provisions of the Agreement may be amended
or waived only with the prior written consent of the Company and the
Executive.
13.14. Right
to Setoff.
Notwithstanding anything to the contrary contained herein,
the Company, at its election and in its sole discretion, shall have the right,
subject to applicable law, to withhold and setoff against any amount due
hereunder (other than the Base Salary) the amount of any claim for
indemnification or payment of damages, any payment, or any amount to which
the
Company or any of its Affiliates may be entitled under this Agreement. The
Company shall provide written notice to the Executive of its intent to setoff
pursuant to this Section
13.14.
The
Executive shall be entitled to pay the amount intended to be
setoff
in immediately
available funds within 30 days of such notice. In the event the Executive does
not pay
within such 30 days or indicates to the Company that the Executive does not
intend to satisfy
such
setoff amount in immediately available funds, the Company shall be entitled
to
exercise the right of setoff in the amount specified in the written notice
less
any partial payments by the Executive
with respect to such notice.
Notwithstanding anything to the contrary herein or in any other
Transaction Document, and other than with respect to Base Salary, during any
30
day notice period, any amounts due or payable to the Executive shall be tolled
and there shall be no default due to such tolling and nonpayment. In the event
the Executive satisfies all proposed setoff amounts in immediately available
funds, such tolling shall cease and any amount or payment owed shall be payable
in accordance with its terms. Notwithstanding the above, the Company
shall be entitled to exercise any other remedies provided by this Agreement
or
any other Transaction Document.
-
14 -
13.15. Third
Parties.
The
parties hereto acknowledge and agree that certain provisions
of this Agreement are intended for the benefit of the Employer Group Members
(other
than the
Company), that such entities are third-party beneficiaries of this Agreement
and
that provisions of this Agreement shall be enforceable by such persons as
provided herein.
14.
Guaranty
by BSB.
BSB
hereby guarantees to the Executive the due and punctual performance of each
of
the obligations owing by the Company under this Agreement if, as and when such
obligations become due (the “Obligations”),
but
in all cases, subject to the satisfaction by the Executive of each and every
of
the Executive’s conditions to the performance of such Obligations. If the
Company shall fail to perform or satisfy any part or all of the Obligations
if
and when due, then BSB shall perform or satisfy or cause the Company to perform
or satisfy such Obligations pursuant to the terms thereof. Neither BSB’s
covenant contained in this Agreement nor the rights of the Executive under
this
Section 14 shall be assignable or transferable by the Executive without the
prior written consent of BSB. This Section 14 shall automatically terminate
upon
the expiration of the Initial Term. BSB’s obligations pursuant to this Section
14 are subject to all rights, claims, counterclaims, causes of action, defenses
and remedies to which BSB or the Company may be entitled.
[SIGNATURE
PAGE FOLLOWS]
-
15 -
IN
WITNESS WHEREOF, the parties hereto have executed this Senior
Management Agreement as of the day and year first above
written.
|
BENEFICIAL
INSURANCE SERVICES, LLC
/s/ Xxxxxx
Xxxxxxx
By:
Xxxxxx Xxxxxxx
Its.
Vice President
|
|
XXXXXX
X. XXXX
/s/
Xxxxxx X.
Xxxx
Solely
as to its obligations under Section 14
hereof,
|
|
BENEFICIAL MUTUAL SAVINGS
BANK
/s/ Xxxxxx
Xxxxxxx
By: Xxxxxx Xxxxxxx
Its: Executive Vice President
and CFO
|
[signature
page to Senior Management Agreement]
-
16 -
Exhibit
A
COMMISSION
SCHEDULE
|
Variable
Compensation:
|
||
|
(Based
on paid basis commissions coded to
Executive*)
|
||
|
$0-$250,000
|
35%
|
|
|
$250,001
- $500,000
|
28%
|
|
|
$500,001
-
|
21%
|
|
*Some
accounts are shared commission accounts and may be coded
differently.
All
Variable compensation subject to offsets for returns and bad debts at management
discretion.
All
Producers can receive a 10% referral fee bonus for business referred to and
placed in another
department. Receiving producer charged with 10% cost.
Variable
compensation excludes personal lines accounts.
A-1
Exhibit
B
FORM
OF GENERAL RELEASE OF ALL CLAIMS
This
General Release of All Claims is made as of (“General Release”),
by
and between Xxxxxx X. Xxxx (the “Executive”)
and
Beneficial Insurance Services, LLC (the “Company”).
WHEREAS,
the Company and the Executive are parties to a Senior Management
Agreement dated as of January [__], 2005 (the “Senior
Management Agreement”);
WHEREAS,
the execution of this General Release is a condition precedent to
the
payment
of severance as set forth in Section
2.3(b)
of the
Senior Management Agreement;
WHEREAS,
in consideration for the Executive’s signing of this General Release, the
Company will provide the Executive with severance benefits pursuant to
Section
23(b)
of the
Senior Management Agreement; and
WHEREAS,
the Executive and the Company intend that this General Release
shall be
in full satisfaction of the obligations described in this General Release owed
to the Executive by the Company, including those under the Senior Management
Agreement.
NOW,
THEREFORE, in consideration of the promises and the mutual covenants
and
agreements herein contained, the Company and the Executive agree as
follows:
1. the
Executive, for himself or herself, the Executive’s spouse, heirs,
administrators, children, representatives, executors, successors, assigns,
and
all other persons claiming through the Executive, if any (collectively,
“Releasers”),
does
hereby release, waive, and forever discharge the Company and each of its
respective agents, subsidiaries, parents, Affiliates, related organizations,
employees, officers, directors, attorneys, successors, and assigns
(collectively, the “Releasees”)
from,
and does fully waive any obligations of Releasees to Releasers for, any and
all
liability, actions, charges, causes of action, demands, damages, or claims
for
relief, remuneration, sums of money, accounts or expenses (including attorneys’
fees and costs) of any kind whatsoever, whether known or unknown or contingent
or absolute, which heretofore has been or which hereafter may be suffered or
sustained, directly or indirectly, by Releasers in consequence of, arising
out
of, or in any way relating to: (a) the Executive’s employment with the Company
and any of its Affiliates; (b) the termination of the Executive’s employment
with the Company and any of its Affiliates; (c) the Senior Management Agreement;
or (d) any events occurring on or prior to the date of this General Release.
The
foregoing release and discharge, waiver and covenant not to xxx includes, but
is
not limited to, all claims and any obligations or causes of action arising
from
such claims, under common law including wrongful or retaliatory discharge,
breach of contract (including but
not limited
to any claims under the Senior Management Agreement and any claims under any
benefit plans sponsored by the Company or any of its Affiliates, on the other
hand) and any action arising in tort including libel,
slander,
defamation or intentional infliction of emotional distress, and claims under
any
federal, state or local statute including the Age Discrimination in Employment
Act (“ADEA”), Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of.
1866 and
1871 (42 U.S.C. § 1981), the National Labor Relations Act, the Fair Labor
Standards Act, the Employee Retirement Income Security Act, the Americans with
Disabilities Act of 1990, the Rehabilitation
B-1
Act
of
1973, the Pennsylvania Human Relations Act or the discrimination or employment
laws of any state or municipality, and/or any claims under any express or
implied contract which Releasers may claim existed with Releasees. This also
includes a release of any claims for wrongful discharge and all claims for
alleged physical or personal injury, emotional distress relating to or arising
out of the Executive’s employment with the Company or any of its Affiliates or
the termination of that employment; and any claims under the WARN Act or any
similar law, which requires, among other things, that advance notice be given
of
certain work force reductions. This release and waiver does not apply to: (i)
any right to indemnification now existing under the charter or bylaws; (ii)
any
rights to the receipt of employee benefits which vested on or prior to the
date
of this General Release; (iii) the right to receive Severance Benefits under
Section 2.3(b) of the Senior Management Agreement and the right to reimbursement
of expenses under Section 2.4(c) of the Senior Management Agreement; (iv) rights
under the Asset Purchase Agreement; and (v) right to continuation coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act.
2. Excluded
from this General Release and waiver are any claims which cannot be waived
by
law, including but not limited to the right to participate in an investigation
conducted by certain government agencies. The Executive does, however, waive
the
Executive’s right to any monetary recovery should any agency (such as the Equal
Employment Opportunity Commission) pursue any claims on the Executive’s behalf.
The Executive represents and warrants that the Executive has not filed any
complaint, charge, or lawsuit against the Releasees with any government
agency
or
any court.
3. the
Executive agrees never to seek personal recovery from Releasees in any forum
for
any claim covered by the above waiver and release language, except that the
Executive may bring a claim under the ADEA to challenge this General Release.
If
the Executive violates this General Release by suing Releasees, other than
under
the ADEA or as otherwise set forth in Section
1 hereof,
the Executive shall be liable to the Company for its reasonable attorneys’ fees
and
other
litigation costs incurred
in defending against such a suit. Nothing in this General Release is intended
to
reflect any party’s belief that the Executive’s waiver of claims under ADEA is
invalid or unenforceable, it being the intent of the parties that such claims
are waived.
4. the
Executive acknowledges and recites that:
(a) the
Executive has executed this General Release knowingly and
voluntarily;
(b) the
Executive has read and understands this General Release in its
entirety;
(c) the
Executive has been advised and directed orally and in writing (and this
subparagraph (c) constitutes such written direction) to seek legal counsel
and
any other advice the Executive wishes with respect to the terms of this General
Release before executing it;
(d) the
Executive’s execution of this General Release has not been forced by any
employee or agent of the Company, and the Executive has had an opportunity
to
negotiate about the terms of this General Release; and
(e) the
Executive has been offered 21 calendar days after receipt of this General
Release to consider its terms before executing it).1
___________________
1 In
the
event the Company determines that the Executive’s termination constitutes “an
exit incentive
or other employment termination program offered to a group or class of
employees” under the ADEA, the Company
will provide the Executive with: (1) 45 days to consider the General Release;
and (2) the disclosure schedules required for an effective release under
the
ADEA.
B-2
5. This
General Release shall be governed by the internal laws (and not the choice
of
laws) of the Commonwealth of Pennsylvania, except for the application of
pre-emptive Federal law.
6. The
Executive shall have 7 days from the date the Executive executes this General
Release to revoke his or her waiver of any ADEA claims by providing written
notice of the revocation to the Company, as provided in Section 10.2 of the
Senior Management Agreement. In the event of such revocation, the terms of
Section 10.2 of the Senior Management Agreement shall govern.
7. Defined
terms not defined in this General Release have the meanings given in
the
Senior
Management Agreement.
PLEASE
READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE
OF ALL
KNOWN AND UNKNOWN CLAIMS.
| Date: __________________________________ | __________________________________ |
|
Executive
|
B-3
Exhibit
C
Any
and
all Intellectual Property, including all “Work Product”, currently existing, in
the process of or to be created, either directly or indirectly, associated
with
Xxxx Communications, LLC; Investment & Business Advisors, LLC; New Media
Design, LLC and Trifecta Investment Company, LLC and/or any of its Affiliates,
from the beginning of time until the end of time plus one day.
C-1
Schedule
1.1
Xxxx
Communications, LLC - Chairman (NY & PA Advertising Agency)
Investment
& Business Advisors, LLC - Chairman & President (Holds investment in
Xxxx Communications)
New
Media
Design, LLC - Chairman (NY Media Design Company)
Trifecta
Investment Company, LLC - Chairman & President (Holds investment in New
Media Design)
Xxxxx
Xxxxx Speech & Hearing Center - Board President (Non Profit)
Manufacturers’
Golf & Country Club - Member, Board of Governors
Union
League of Philadelphia - Chair of the Insurance Committee
