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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is made and entered into as
of August 11, 1995 by and between Conning & Company,
a Connecticut corporation (the "Company"), Conning Asset
Management Company, a Missouri corporation ("CAM"), and Xxxxxxx
X. Xxxxxxx ("Employee").
WHEREAS, the Company and Employee are parties to that
certain Contribution Agreement (the "Contribution Agreement"),
made and entered into as of July 24, 1995, by and among Conning
Asset Management Company, a Missouri corporation, General
American Life Insurance Company, a Missouri corporation, General
American Holding Company, a Missouri corporation which is a
wholly owned subsidiary of General American, General American
Investment Management Company, a Missouri corporation, the
Company, Conning Corporation, a Delaware corporation, and the
shareholders and option holders of Conning Corporation, including
Employee.
WHEREAS, Employee possesses skills and experience which
Company believes are of value to the success of Company's
business operations;
WHEREAS, Company wishes to employ Employee subject to
the terms and conditions of this Agreement, and Employee wishes
to accept such employment subject to the terms and conditions of
this Agreement;
WHEREAS, the Company and its Affiliates are in the
business of rendering investment advice, with a special expertise
in advising insurance companies in the United States, and have
accumulated valuable, confidential information including trade
secrets and know-how relating to portfolio construction and
management, technology, formulas, marketing plans, business
strategies, and other business records; and
WHEREAS, the giving of the covenants contained herein
is a condition precedent to the employment of Employee, and
Employee acknowledges that the execution of this Agreement and
the entering into of these covenants is an express condition of
his or her employment and that said covenants are given in
consideration for such employment and the other benefits
conferred upon him by this Agreement.
NOW, THEREFORE, in consideration of the mutual
promises, covenants, and agreements herein set forth, the parties
hereto agree as follows:
1. Employment and Duties. Company hereby agrees to
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employ Employee, and Employee agrees to enter the employ of
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Company for the Term herein specified. During the Term,
Employee shall serve and be employed as President of CAM and as President
and CEO of the Company with responsibility for (i) marketing for
CAM and its subsidiaries, (ii) managing the Hartford office of
CAM and its subsidiaries, (iii) participating in identifying and
negotiating acquisitions, and (iv) participating in the
development and execution of an initial public offering of the
stock of CAM. Employee shall also perform such other duties as
the Board of Directors or officers of Company may reasonably
assign to Employee, and shall devote his or her full time,
attention, and effort to the business and affairs of Company.
2. Term. The term of this Agreement shall be for the
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period commencing on date hereof and ending three years after the
date hereof (the "Term"), unless terminated prior thereto as
provided in Section 4.
3. Compensation and Benefits.
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a. In consideration of his or her services,
Employee shall receive during the Term hereof a base salary at
the rate of not less than $250,000 per year ("Annual Base
Salary"), payable in substantially equal installments in
accordance with Company's usual paying practices, but not less
frequently than monthly. Employee shall be eligible to receive
increases in Employee's Annual Base Salary pursuant to periodic
salary reviews consistent with the Company's corporate policies;
it being understood such increases are not guaranteed, but are
subject to evaluation of Employee's job performance. In addition
to the foregoing compensation, Employee will be eligible, in the
sole discretion of the Board of Directors of the Company, to
participate as a limited partner in Conning Investment Partners
LP III or in the Company's Venture Capital Carried Interest
Allocation Plan and the Company's Bonus Plan as modified to
reflect the combination of the Company with GAIMCO.
b. As further consideration for the covenants
contained herein, the Company will provide Employee with such
insurance, welfare, sick leave, and other benefits as may be
established by the Company from time to time with respect to its
employees and will reimburse Employee for authorized business
expenses in accordance with policies established by the Company
from time to time. Employee shall be entitled to vacation in an
amount equal to the amount of vacation to which such Employee
would have been entitled under the Company's vacation policy in
effect as of June 30, 1995 for employees with service and
position equal to the length of Employee's service and position
with the Company.
c. Upon execution of this Agreement, Employee
shall be paid a signing bonus in cash equal to $195,000 (the
"Signing Bonus"), subject to the forfeiture provisions provided
in Section 4(d)(3) hereof. In order to secure such forfeiture
provisions, Employee agrees that a certificate (the
"Certificate") evidencing 36,585 shares of the Series A
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Convertible Preferred Stock, par value $.01 per share ("Preferred
Stock"), of the Company issued to Employee in connection with the
cancellation of certain stock options held by Employee shall be
pledged to the Company, which encumbrance shall be evidenced by a
legend on such Certificate until such time as such risk of
forfeiture shall have expired.
4. Termination.
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a. Termination Without Cause. Employee's
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employment may be terminated without cause:
(1) At any time upon the mutual written
agreement of the parties hereto;
(2) Immediately upon Employee's death;
(3) Immediately upon Employee's Total
Disability (as defined in Section 4(f));
(4) Upon not less than 30 days' advance
written notice from Employee of Employee's desire to
terminate this Agreement, provided, however, that, following
such notice, the Company shall have the right to terminate
Employee's employment immediately, provided that the Company
pays Employee the compensation due him or her as if the
Termination Date occurred 30 days from the date of such
notice; or
(5) Upon not less than 30 days' advance
written notice from the Company of the Company's desire to
terminate this Agreement.
b. Termination For Cause. Employee's employment
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may be terminated by the Company upon written notice to Employee
at any time for any of the following reasons, each of which shall
constitute "termination for cause":
(1) Any material breach of this
Agreement by Employee which is not cured within 20 days
after written notice by the Company;
(2) Employee's fraud, embezzlement,
dishonesty or unlawful acts in connection with the business
of the Company or its Affiliates;
(3) Employee's conviction for any
felony; or
(4) Employee's substantial and
continuing willful failure to perform, or grossly negligent
performance of, the duties of Employee's position.
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c. Termination Date. Employee's last day of
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employment with the Company (if such date occurs prior to the
third anniversary of this Agreement) shall be referred to in this
Agreement as the "Termination Date" and shall constitute the end
of the Term of this Agreement.
d. Effect of Termination.
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(1) Upon any termination of the employment
pursuant to this Section 4, this Agreement shall terminate and
the Company shall have no obligation of any kind whatsoever to
Employee except to pay Employee the compensation due him or her
through the Termination Date, the amount of such compensation due
Employee under Section 3(a) hereof being apportioned for the
portion of the fiscal period Employee was actually employed, and
any deferred compensation then due to Employee hereunder. The
obligations under Section 6 and 7 shall survive the end of the
Term of this Agreement according to their terms.
(2) In addition, upon termination pursuant
to Section 4(a)(5), the Company shall (i) pay Employee an amount
equal to 150% of the Annual Base Salary for each year (or portion
thereof, pro rated) through the balance of the Term and (ii)
provide all benefits described in Section 3(b) through the
balance of the Term. Payment pursuant to this Section 4(d)(2)
shall not apply to any termination other than one pursuant to
Section 4(a)(5).
(3) Upon termination of this Agreement
pursuant to Section 4(a)(4) or Section 4(b), Employee agrees to
repay to the Company the percentage of the Signing Bonus
indicated below, depending upon the year in which such
termination occurs.
During Year Percentage Forfeited
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1 100%
2 66.6%
3 33.3%
Immediately upon such termination, Employee shall either pay the
Company the forfeited portion of the Signing Bonus in cash or
tender to the Company the Certificate, which the Company shall
cancel and reissue to the Employee for a number of shares of
Preferred Stock equal to the original number of shares evidenced
by the Certificate less a number of shares, valued in accordance
with Section 11.3 of the Company's Shareholders Agreement, equal
to the forfeited portion of the Signing Bonus. If Employee
neither pays cash nor tenders the Certificate, the Company shall
be entitled to unilaterally cancel the Certificate on its stock
books and reissue Employee a new certificate as provided in the
preceding sentence.
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e. Release. In the event Employee becomes
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entitled to payments pursuant to Section 4(d)(2) hereof, Employee
shall, as a condition to such payments being made, execute and
deliver to the Company, and any Affiliates of the Company
designated by the Company, a release of all Employee's claims for
employment, employment-related compensation or employee benefits
or any form of damages as a result of termination of employment
in such form as is reasonably satisfactory to the Company, which
document shall include a covenant not to bring any claim, action
or suit with respect to the matters which are the subject of such
release.
f. Definition of Total Disability. "Total
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Disability" means having a physical or mental condition which
renders Employee incapable of performing his duties and
responsibilities with the Company for a period of six months.
Determination of Total Disability will be made by a physician
selected by the Company. If the determination of such physician
differs from the opinion as to disability of the Employee's
physician, the two physicians shall select a third physician,
whose determination shall be binding on both parties.
5. Company Policies. Employee agrees to abide by the
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policies, rules, regulations, and usages applicable to Employee
as they are established by the Company from time to time
("Company Policies"), and to perform the duties assigned to him
faithfully and loyally.
6. Non-Disclosure. Employee agrees that he will
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never disclose, directly or indirectly, to any other firm or
person any of Company's or Company's Affiliates' confidential or
proprietary information including customer lists, trade secrets,
and know-how relating to its or their business. Confidential or
proprietary information shall not include any information which
is or hereafter comes in the public domain or is or becomes
generally known or available in the industry through no act of
Employee prohibited by this Agreement.
7. Non-Compete Agreement.
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a. Covenant. Employee recognizes that (i) CAM
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and the subsidiaries of which it controls a majority of the
voting stock ("Controlled Subsidiaries") have spent substantial
money, time and effort over the years in developing and
solidifying their relationships with their customers and in
developing their confidential information; (ii) long-term
customer relationships often can be difficult to develop and
require a significant investment of time, effort, and expense;
(iii) the Company pays its employees to, among other things,
develop and preserve business information, customer goodwill and
customer loyalty for and on behalf of the Company; and (iv) the
Company is hereby agreeing to employ and pay Employee based upon
Employee's assurances and promises contained herein not to divert
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the Company's customers' goodwill and not to put himself or
herself in a position during or following Employee's employment
with the Company in which the confidentiality of the Company's
proprietary information might somehow be compromised.
Accordingly, Employee covenants and agrees that for a period of
three years following the date hereof, regardless of whether
Employee remains employed by the Company and regardless of
whether Employee's termination, if any, is with or without cause,
neither Employee nor any entity controlling, controlled by or
under common control with Employee shall (i) engage in, or have
any direct or indirect interest in any other person, firm,
corporation, or other entity engaged in any business activities
competitive with the business activities of CAM and the
Controlled Subsidiaries, or (ii) become an employee, director,
advisor, consultant, independent contractor, or agent of any such
person, firm, corporation, or other entity, except with CAM's
prior written consent.
b. Acknowledgement Regarding Restrictions.
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Employee recognizes and agrees that the restraints contained in
Section 7(a) are reasonable and enforceable in view of the
legitimate interests of CAM and the Controlled Subsidiaries in
protecting their confidential information and customer goodwill,
and that the limitations contained therein on the duration and
geographic scope of, and activities prohibited by, such
restraints are reasonable and binding upon Employee.
c. Enforceability.
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(1) The covenants contained in this
Section 7 shall be deemed to be a series of separate covenants,
one for each aspect of CAM's or the Controlled Subsidiaries'
businesses and locations. Each separate covenant shall
hereinafter be referred to as a "Separate Covenant."
(2) If any court or tribunal of competent
jurisdiction shall refuse to enforce one or more of the Separate
Covenants because the time limit applicable thereto is deemed
unreasonable, it is expressly understood and agreed that such
Separate Covenant or Separate Covenants shall not be void but
that for the purpose of such proceedings such time limitation
shall be deemed to be reduced to the extent necessary to permit
the enforcement of such Separate Covenant or Separate Covenants.
(3) If any court or tribunal of competent
jurisdiction shall refuse to enforce any or all of the Separate
Covenants because, taken together, they are more extensive
(whether as to geographic area, scope of business, or otherwise)
than is deemed to be reasonable, it is expressly understood and
agreed between the parties that such Separate Covenant or
Separate Covenants shall not be void but that for the purpose of
such proceedings the restrictions contained therein (whether as
to geographic area, scope of business, or otherwise) shall be
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deemed to be reduced to the extent necessary to permit the
enforcement of such Separate Covenant or Separate Covenants.
d. Ownership of Securities. Nothing contained
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herein shall restrict Employee from owning 2% or less of the
corporate securities of any entity in competition with CAM's or
the Controlled Subsidiaries' businesses, which securities are
listed on any national securities exchange or authorized for
listing on the Nasdaq National Market, if Employee has no other
connection or relationship, direct or indirect, with the issuer
of such securities.
8. Non-Waiver of Rights. The Company's failure to
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enforce at any time any of the provisions of this Agreement or to
require at any time performance by Employee of any of the
provisions hereof shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this
Agreement, or any part hereof, or the right of Company thereafter
to enforce each and every provision in accordance with the terms
of this Agreement.
9. The Company's Right to Injunctive Relief. In the
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event of a breach or threatened breach of any of Employee's
duties and obligations under the terms and provisions of Sections
6 or 7 hereof, the Company shall be entitled, in addition to any
other legal or equitable remedies it may have (including any
right to damages that it may suffer), to temporary, preliminary,
and permanent injunctive relief restraining such breach or
threatened breach. Employee hereby expressly acknowledges that
the harm which might result to the Company's business as a result
of any noncompliance by Employee with any of the provisions of
Sections 6 or 7 would be largely irreparable. Employee
specifically agrees that if there is a question as to the
enforceability of any of the provisions of Sections 6 or 7
hereof, Employee will not engage in any conduct inconsistent with
or contrary to such Sections until after the question has been
resolved by a final judgment of a court of competent
jurisdiction.
10. Employee Representations. Employee represents
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that the execution and delivery of this Agreement and Employee's
employment with the Company do not violate any previous
employment agreement or other contractual obligation of Employee.
Employee also represents and agrees that Employee has not
disclosed, and will not disclose, to the Company any information,
whether confidential, proprietary, or otherwise, which Employee
has in Employee's possession and which Employee is not legally
free to disclose.
11. The Company's Right to Recover Costs and Fees.
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Employee and the Company each undertakes and agrees that if such
party breaches this Agreement, such party shall be liable for any
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attorneys' fees and costs incurred by the other party in
enforcing its rights hereunder.
12. Definition of Affiliate. "Affiliate" shall for
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purposes of this Agreement mean any person or entity (the
"Specified Person") (a) who directly or indirectly controls, is
controlled by, or is under common control with the Company, (b)
who owns or controls thirty percent (30%) or more of the
Company's outstanding voting securities or percentage interests;
(c) in whom the Company owns or controls thirty percent (30%) or
more of the outstanding voting securities or percentage
interests; (d) who is a director, partner, manager, executive
officer or trustee of the Company; (e) in whom the Company is a
partner; or (f) who has any relationship with the Specified
Person by blood, marriage or adoption, not more remote than first
cousin, and shall include, without limitation, Conning Asset
Management Company, General American Life Insurance Company,
General American Holding Company, General American Investment
Management Company, and Conning Corporation.
13. Miscellaneous. Neither this Agreement nor any
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rights hereunder shall be assignable by either party hereto.
This agreement contains the entire agreement between
the parties with respect to the terms of Employee's employment by
Company, free of any other representation, promise, or
understanding. This Agreement may be modified or amended only by
a written agreement executed by both parties to this Agreement.
Nothing in this Agreement shall be construed as
creating a joint venture or partnership between Employee and the
Company or any of its affiliates.
Section headings are provided in this Agreement for
convenience only and shall not be deemed to alter the content of
such sections.
PLEASE NOTE: BY SIGNING THIS EMPLOYMENT AGREEMENT, EMPLOYEE IS
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HEREBY CERTIFYING THAT EMPLOYEE (A) HAS RECEIVED A COPY OF THIS
AGREEMENT FOR REVIEW AND STUDY BEFORE EXECUTING IT; (B) HAS READ
THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAS HAD
SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY
QUESTIONS EMPLOYEE HAS ABOUT THE AGREEMENT AND HAS RECEIVED
SATISFACTORY ANSWERS TO ALL SUCH QUESTIONS; AND (D) UNDERSTANDS
EMPLOYEE'S RIGHTS AND OBLIGATIONS UNDER THE AGREEMENT.
This Agreement shall be construed and interpreted under
the laws of Missouri.
IN WITNESS WHEREOF, the parties have executed this
agreement on the date first set out above.
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CONNING ASSET MANAGEMENT COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: X.X. Xxxxxxxxxx
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Title: CEO
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CONNING & COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: X.X. Xxxxxxx
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Title: Chairman, President & CEO
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EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Address: 178 Rever Knolls
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Xxxx, XX 00000
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