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Exhibit 10.8
EMPLOYMENT/CONSULTING AGREEMENT
I
PARTIES
1.1 PARTIES. This Employment/Consulting Agreement (Agreement) is made this
16th day of December, 1997, effective January 1, 1998, by and between
Xxxxx Xxxxxxx (Employee) and Central Reserve Life Insurance Company,
and Central Reserve Life Corporation, Ohio corporations having their
principal offices at 00000 Xxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxx 00000-0000
(hereinafter, collectively "Company").
II
RECITALS
2.1 COMPANY. Central Reserve Life Insurance Company is the wholly-owned
subsidiary of Central Reserve Life Corporation, a holding company
organized under the laws of the State of Ohio.
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2.2 EMPLOYEE. Employee is Senior Executive Vice President, Chief Financial
Officer of Company.
2.3 PRIOR AGREEMENTS. Employee and Company are parties to prior employment
agreements. It is the intention of the parties that all such prior
employment agreements be canceled and supplanted in their entirety by
this Agreement.
III
TERMS OF THE AGREEMENT
3.1 TERM AND COMPENSATION. Company agrees to continue the employment of
Employee for a term of six (6) months, commencing January 1, 1998 and
ending June 30, 1998, with primary responsibilities devoted to the
financial affairs of Company. Commencing July 1, 1998 and continuing to
June 30,
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2000, Employee shall assume the duties of consultant regarding the
financial affairs of Company.
Employee shall devote no more than fifty percent (50%) of his time to
his duties as a consultant to Company (e.g., no more than 970 hours per
calendar year). During the term from January 1, 1998 to June 30, 1998,
Employee shall be paid a salary at the annual rate of $250,000, payable
in accordance with Company's normal payroll practices.
Beginning July 1, 1998 and continuing to June 30, 2000, unless
otherwise terminated according to the terms of this agreement, in
consideration for the performance of his duties as a financial
consultant to Company, Employee shall be paid a consulting fee in the
amount of $10,417 per month.
During the term of this agreement, Company shall reimburse Employee for
all reasonable travel expenses in accordance
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with Company's usual reimbursement practices for Employee's expenses
incurred in connection with the performance of his duties as an
employee of Company from January 1, 1998 until June 30, 1998 and,
thereafter, in connection with the performance of his duties as a
consultant.
Upon termination of his employment, Company shall reimburse Employee
for the cost of continuing his health insurance for himself and for his
spouse, Xxxx Xxxxxxx, pursuant to COBRA, for a period of eighteen (18)
months; thereafter, Company shall reimburse Employee for the cost of a
health insurance plan available to Eligible Individuals, as defined
under the laws of the State of North Carolina, for himself and for his
spouse, Xxxx Xxxxxxx, until each is eligible for Medicare, at which
time such reimbursement shall terminate.
During the term beginning January 1, 1998 and continuing until June 30,
1998, Employee shall continue to receive the
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following fringe benefits on the same basis as he was receiving them as
an of December 1, 1997: (i) country club membership; and (ii) an
allowance for a leased automobile, plus insurance, maintenance, and
operational expenses.
Beginning July 1, 1998, and continuing to the termination of this
agreement, all compensation in any form whatsoever shall terminate,
including, but not limited to, any salary, reimbursement, and fringe
benefits, at which time Employee shall be entitled only to receive the
consulting fee, reimbursement for reasonable travel and health
insurance, as set forth herein.
Moreover, Employee shall be entitled to retain his current office for
as long as he is employed by Company.
3.2 VACATION. During the employment term beginning January 1 , 1998 to June
30, 1998, Employee is entitled to three (3)
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weeks' paid vacation. No vacation time prior to January 1, 1998 shall
so cumulate.
3.3 INSURANCE BENEFITS AS EMPLOYEE. During the employment term beginning
January 1, 1998 to June 30, 1998, Company shall pay Employee the
compensation set forth in Section 3.1 herein during any time that he
shall suffer either partial or total disability (whether such
disability be temporary or permanent), reduced only by the amounts
which are paid to Employee under any insurance program purchased by
Company or any affiliate. In addition, during Employee's term of
employment (January 1, 1998 to June 30, 1998), Company shall furnish
Employee at no cost to him, group life insurance, AD&D, medical and
hospital insurance benefits no less than those covering Employee on
January 1, 1998, and Employee shall be entitled to such additional
fringe benefits, if any, that are provided to an executive of his level
in Company.
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3.4 RETIREMENT BENEFITS. From January 1, 1998 to June 30, 1998, Employee
may participate in Company's 401(k) under the same terms and conditions
that apply to an executive of his level in Company. Company's pension
plan and retirement plan fully paid by Company in effect on January 1,
1982 shall not be terminated or its benefits reduced below the level in
effect on December 31, 1997 as it applies to Employee; provided that
after the contribution for the year ending December 31, 1997, Company
shall have no further obligation to make contributions to such plan on
behalf of Employee.
3.5 RELOCATION. Employee shall not be required to relocate his place of
employment or his residence outside of Cuyahoga County, Ohio, but may
relocate his residence from time to time within or without Cuyahoga
County at his sole election.
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IV
GENERAL COVENANTS
4.1 GENERAL COVENANTS.
(a) TERMINATION BY EMPLOYEE. At no time within the term of this Agreement
shall Employee terminate this contract or refuse to perform his
reasonable and customary duties and responsibilities for Company,
except upon a material breach of the terms hereof by Company. Upon
termination by Employee because of such breach by Company, the rights
of Employee and the obligations of Company shall be the same as those
provided as to Employee and Company in Article V herein.
(b) TERMINATION BY COMPANY. At no time within the term of this Agreement
shall Company terminate this Agreement. If, however, Company shall
attempt for any reason whatsoever to
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terminate its employment of Employee and/or its agreement to engage his
services as a consultant, then and in that event, Employee may deem
this a material breach of the terms of this Agreement by Company, and
the rights of the Employee and the obligations of Company shall be as
set forth in Article V herein.
Notwithstanding the provisions of this Section 4.1(b), this Agreement
and Employee's employment or agreement to be a consultant hereunder, as
the case may be, may be terminated by Company at any time without
further compensation for significant just and sufficient cause. For
purposes of this paragraph, "significant just and sufficient cause"
shall mean any action or non-action involving a material breach of the
terms and conditions of the Agreement by Employee, which cannot be
promptly cured or rectified by Employee to Company's reasonable
satisfaction, or gross or repeated insubordination or a major conflict
or interference with Employer's best interests or business operations.
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(c) ASSIGNABILITY. Neither party shall have the right to assign this
Agreement nor any rights or obligations hereunder without the prior
written consent of the other party. Provided however that, upon the
sale of all or substantially all of the assets, business and goodwill
of Company to another corporation or entity, or upon the merger or
consolidation of Company with another corporation or entity, this
Agreement shall inure to the benefit of, and be binding upon, both
Employee and the corporation or entity purchasing such assets, business
and goodwill, or surviving such merger or consolidation, as the case
may be, in the same manner and to the same extent as though such other
corporation or entity were the original party to this Agreement.
V
TERMINATION PAYMENTS
5.1 TERMINATION OBLIGATIONS OF COMPANY. Where applicable, the termination
payment obligations of Company shall be discharged as follows:
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(a) Employee's annual salary shall become fixed for the unexpired remainder
of the initial employment term of this Agreement, January 1, 1998 to
June 30, 1998 and Employee's consulting fee shall become fixed for the
unexpired remainder of the term of consulting (July 1, 1998 to June 30,
2000;
(b) Such annual salary and or consulting fee owing for the unexpired
employment or consulting term, as the case may be, shall then be paid
to Employee in one lump sum within thirty (30) days of the effective
date of his termination;
(c) Upon termination of employment or consulting services, the
reimbursement for health insurance to which Employee is entitled at no
cost to Employee under the terms and conditions of Section 3.1 herein
shall be continued by Company.
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Notwithstanding the provisions of this Section 5.1(b) or any other
provision of this Agreement, Employee's employment or consulting
services, as the case may be, may be terminated by Company at any time
without further compensation for significant just and sufficient cause.
For purposes of this paragraph, "significant just and sufficient cause"
shall mean any action or non-action involving a material breach of the
terms and conditions of Agreement, which cannot be promptly cured or
rectified by Employee to Company's reasonable satisfaction, or gross or
repeated insubordination or a major conflict or interference with
Employer's best interests or business operations.
VI
MISCELLANEOUS
6.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto in relation to the subject matter hereof,
and no other representations,
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warranties, covenants, understandings or agreements, oral or otherwise,
exist in relation thereto between the parties.
6.2 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended solely for the
benefit of Company and Employee and confers no right or benefit upon
any other person, including stockholders of Company and other officers
and directors of Company.
6.3 SEPARABILITY. Each provision of this Agreement is separable from each
other provision, and if any provision shall be found invalid for any
reason, the remaining provisions shall continue in full force and
effect.
6.4 SECTION HEADINGS. The article and section headings herein are intended
only as aids to the location of subject matter, and are neither a part
of the substance of the Agreement nor a guide to construction.
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6.5 INDEPENDENT CONTRACTOR: Employee's employment shall terminate as of
June 30, 1998, at which time, pursuant to the terms of this Agreement,
he will be engaged as an independent contract to perform financial
consulting services to Company as provided herein.
6.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original, and all such
counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have signed this Agreement on the day and year
first above written, effective January 1, 1998.
EMPLOYEE: COMPANY:
CENTRAL RESERVE LIFE INSURANCE
COMPANY
/s/ Xxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxxxx
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Xxxxx Xxxxxxx
Its: General Counsel
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CENTRAL RESERVE LIFE CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
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Its: General Counsel
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