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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
Xxxxxxxx-Xxxxxxxxx Management Company (hereafter "SCMC") agrees to employ the
undersigned Employee, and the Employee accepts employment under the Terms of
this Employment Agreement.
1. EMPLOYMENT. Employee will perform the duties assigned by SCMC, and
will receive compensation and benefits as determined by SCMC. SCMC may change
the duties and may change the compensation, benefits, and other conditions of
employment from time to time as determined by SCMC.
2. BASE SALARY. Employee will receive a base salary of $110,000 during
the 1997 calendar year. Beginning with calendar year 1998 and each year
thereafter, Employee's annual base salary will be adjusted to reflect changes in
the cost of living. The adjustment will be made by dividing the all items and
major group index for all urban consumers (1982-1984 = 100) for the month of
October in each year by that index in the month of October in 1996, which was
158.3. The result will then be multiplied by $110,000 to fix the annual base
salary beginning in the following January. The annual base salary will be paid
in accordance with the payroll practices of SCMC.
3. BONUS. Employee will be given an opportunity to earn a bonus during
each calendar year. The maximum annual bonus available for 1997 will be
$110,000, and for 1998 will be $150,000. The bonus shall be based upon stated
objectives/goals to be set by SCMC with input from Employee for 1997 and each
subsequent year. Any amount may be awarded up to the maximum each year based
upon obtaining all or a portion of the objectives/goals. The maximum incentive
for years subsequent to 1998 will be set by SCMC with input from Employee for
1997 and each subsequent year. Any amount may be awarded up to the maximum each
year based upon obtaining all or a portion of the objectives/goals. The maximum
incentive for years subsequent to 1998 will be set by SCMC with input from
Employee.
4. TERMINATION. The employment relationship may be terminated in
accordance with the following provisions:
A. Employee may terminate the employment at any time upon two
weeks' notice.
B. Employee may be terminated without prior notice for cause.
Acts by the Employee which constitute misconduct, gross negligence,
unlawfulness, dishonesty, or breach of any provision of this Agreement shall be
considered cause for the immediate termination of the employment relationship in
which event the Employee shall not be entitled to any severance pay.
C. Employee may be terminated for failure to meet reasonable
performance objectives or goals upon payment of severance equal to one-half of
the annual base salary at the time of termination. The annual base salary for
this purpose will be 120% of base salary at the time of termination to provide
for the approximate value of fringe benefits. In addition to one-half of 120% of
the base salary, Employee will be entitled to one-half of the bonus paid in the
year previous to termination.
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D. In the event of a management, ownership or business
alteration, if Employee's employment is terminated or Employee resigns because
Employee's duties and responsibilities have been significantly changed or
reduced, then Employee will be entitled to severance pay equal to 120% of the
Employee's current annual base salary plus 100% of the previous year's bonus. If
Employee's employment with SCMC is terminated, but Employee is offered a
comparable or similar position, with comparable compensation, with the successor
to the business of SCMC, no severance payment will be made; provided that such
successor agrees that in the event it significantly changes or reduces
Employee's duties and responsibilities or terminates Employee's employment
within two years, such successor shall be obligated to make the severance
payment provided in this subparagraph 4.D. Employee may also be terminated
without cause upon payment of the severance pay provided in this subparagraph
4.D.
5. CONFIDENTIAL INFORMATION AND TRADE SECRETS. Employee acknowledges
that he or she will be working with confidential information and trade secrets
which are the property of SCMC. Such information includes, but is not limited
to: client lists and information, medical data, financial data, sales data,
marketing data, policyholder data, claims data, personnel information, business
files, contracts, documents, business strategies, business opportunities,
computer software, software codes, and software documentation. During and after
employment with SCMC, Employee agrees not to share such information with any
person outside of SCMC, except upon prior written authorization from SCMC.
6. SCMC BUSINESS ASSETS. Employee agrees that the business assets of
SCMC include information regarding SCMC clients, and relationships with SCMC
clients. SCMC business assets also include confidential information and trade
secrets of SCMC, including those items listed in paragraph 5 above. Employee
also agrees that the work product of Employee produced in the course of
employment with SCMC will be the property of SCMC. Employee agrees that SCMC
shall own the copyright, patent, and other property rights in such work product,
and that this work product will be "work made for hire" for copyright purposes.
Upon termination of employment, Employee shall deliver to SCMC all work product,
and all confidential information and trade secrets (including but not limited to
the items listed in paragraph 5), and Employee shall not retain a copy.
7. SOLE EMPLOYMENT. Unless written permission has been given by SCMC,
Employee will not engage in any other employment, but shall devote his or her
best efforts and entire working time to advancing the interests of SCMC.
8. RELATED COMPANIES. SCMC may assign Employee to work for other
companies which are under common ownership or otherwise related to SCMC. Related
companies include companies which are managed by SCMC, such as Michigan
physicians Mutual Liability Company and its subsidiaries. This Employment
Agreement will apply to services which are performed by Employee for a Company
which is under Common ownership with SCMC or otherwise related to SCMC.
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9. EMPLOYMENT LIMITATION. Employee agrees that for a period of two
years after termination of employment with SCMC, Employee will not accept
employment (on a salaried, or commission, or other basis) in Michigan with any
person or entity which sells or provides medical malpractice insurance to
Michigan physicians. Employee also agrees that for a period of two years after
termination of employment with SCMC, Employee will not directly or indirectly
solicit business from or provide any service or product to any clients of SCMC
or any clients of the insurance companies which SCMC manages for any services or
products which are offered by or through SCMC. Clients include insureds and
other entities who are provided insurance or other services during the one year
period preceding termination of Employee's employment. Employee further agrees
that for a period of six months after termination of employment with SCMC,
Employee will not accept employment (on a salaried, commission, or other basis)
with a person or entity which is being provided services by SCMC or has been
provided such services in the six months preceding termination of employment. If
there is any breach or threatened breach by Employee of the provision of this
paragraph, paragraph 5, or paragraph 6, SCMC shall, without limiting any other
remedy, be entitled to injunctive relief together with reasonable damages and
attorney fees incurred in enforcing those provisions.
10. ENTIRE AGREEMENT. This written contract is the entire Employment
Agreement between the parties and it supersedes all prior negotiations,
employment interviews, communications and understandings between parties. There
are no other Employment Agreements between the parties. This Agreement may not
be changed orally, but only by a written agreement signed by SCMC's chief
executive officer, chief operating officer, or vice president of human
resources.
Dated this 4th day of April , 1997.
EMPLOYEE XXXXXXXX-XXXXXXXXX
MANAGEMENT COMPANY
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxx Its: President
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