EMPLOYMENT AGREEMENT
WHEREAS, Xxxxxx International Group, Inc.("SIG") and Goran Capital Inc.
("Goran") (collectively, SIG and Goran are referred to as the "Company")
consider it in SIG's best interests to employ Xxxxx Xxxxxxxx ("You", "Your"or
"Executive"), upon the terms and conditions hereinafter set forth; and
WHEREAS, the Executive desires to be employed by SIG, upon the terms
and conditions contained herein.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth below, the parties agree as follows:
1. Employment
1.1 Term of Agreement. SIG agrees to employ Executive as Vice President
and Chief Information Officer effective as of January 26, 2000 and continuing
until January 26, 2003 unless such employment is terminated pursuant to Section
3 below; provided, however, that the term of this Agreement shall automatically
be extended without further action of either party for additional one (1) year
periods thereafter unless the Company or Executive gives written notice that it
or he does not intend to extend this Agreement (the "Term").
1.2 Terms of Employment. During the Term, You agree to be a full-time
employee of SIG serving in the position of Vice President and Chief Information
Officer of SIG and further agree to devote substantially all of Your working
time and attention to the business and affairs of SIG and, to the extent
necessary to discharge the responsibilities associated with Your position as
Vice President and Chief Information Officer of SIG and to use Your best efforts
to perform faithfully and efficiently such responsibilities. Executive shall
perform such duties and responsibilities as may be determined from time to time
by the Chief Executive Officer or Executive Vice President of SIG, which duties
shall be consistent with the position of Vice President and Chief Information
Officer of SIG, which shall grant Executive authority, responsibility, title and
standing comparable to that of the vice president and chief information officer
of a stock insurance holding company of similar standing. Your primary place of
work will be at the Company's headquarters in Indianapolis, Indiana, but it is
understood and agreed that your duties may require travel. Nothing herein shall
prohibit You from devoting Your time to civic and community activities or
managing personal investments, as long as the foregoing do not interfere with
the performance of Your duties hereunder.
1.3 Appointment and Responsibility. The Board of Directors of SIG
shall, following the effective date of this Agreement, elect and appoint
Executive as Vice President and Chief Information Officer. Consistent with
Section 1.2 of this Agreement, Executive shall be primarily responsible for the
information systems of the Company.
2. Compensation, Benefits and Prerequisites
2.1 Salary. Company shall pay Executive a salary, in equal bi-weekly
installments, equal to an annualized salary rate of One Hundred Seventy Five
Thousand Dollars ($175,000). Executive's salary as payable pursuant to this
Agreement may be increased from time to time as mutually agreed upon by
Executive and the Company. Notwithstanding any other provision of this
Agreement, Executive's salary paid by Company for any year covered by this
Agreement shall not be less than such salary paid to Executive for the
immediately preceding calendar year.
2.2 Bonus. The Company and Executive understand and agree that the
Company expects to achieve significant growth during the term of this Agreement
and that Executive will make a material contribution to that growth which will
require certain personal and familial sacrifices on the part of Executive.
Accordingly, it is the desire and intention of the Company to reward Executive
for the attainment of that growth through bonus and other means (including, but
not limited to, stock options, stock appreciation rights and other forms of
incentive compensation). Therefore, the Company will pay Executive a lump-sum
bonus of up to Seventy-Five Thousand Dollars ($75,000) (subject to normal
withholdings) within sixty (60) business days from receipt by Company of its
consolidated, annual audited financial statements. Executive's bonus for the
year ended December 31, 2000 shall be in an amount not less than Thirty-Seven
Thousand Five Hundred Dollars ($37,500). Additional bonus amounts shall be
subject to the discretion of the Chief Executive Officer and Executive Vice
President of the Company.
2.3 Employee Benefits. During the term of this Agreement, You shall be
entitled to participate in all incentive, savings, and retirement plans,
practices, policies, and programs available generally to other employees of the
Company. During the term of this Agreement, You and/or Your family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies, and programs available
generally to other employees of the Company.
2.4 Additional Prerequisites. During the term of this Agreement,
Company shall provide Executive with:
(a) Not less than four (4) weeks paid vacation during each
calendar year.
(b) An automobile allowance equal to the value of a Suburban, but
in no event in excess of seven hundred fifty dollars ($750.00)
per month.
2.5 Expenses. During the period of his employment hereunder, Executive
shall be entitled to receive reimbursement from the Company (in accordance with
the policies and procedures in effect for the Company's employees) for all
reasonable travel, entertainment and other business expenses incurred by him in
connection with his services hereunder.
2.6 Hiring Bonus. The Company will pay Executive Fifty Thousand Dollars
($50,000) upon commencement of employment. Should the Executive's employment
with the Company terminate within the first twelve (12) months of employment,
including termination for cause and excluding other termination by the Company,
the Executive shall immediately reimburse the Company the sum of Four Thousand
One Hundred Sixty-Six Dollars ($4,166) for each remaining month of the first
twelve (12) months of employment.
2.7 Relocation Expense.
(a) Company will cover the direct costs of moving Executive and
his family from Dallas, Texas to Indianapolis, Indiana,
including house-hunting visits to Indianapolis, packing and
unpacking of household goods, and insurance.
(b) Company will pay realtor fees of up to seven percent (7%) on the sale
of Executive's Dallas, Texas home.
(c) Company will pay all closing costs on an Indianapolis home.
(d) Company will reimburse Executive for temporary living expenses
in Indianapolis and weekly travel to and from Dallas, Texas
until the relocation is complete.
2.8 Stock Options. Executive shall be eligible to participate in the
Company's stock option plan and will be granted 10,000 options for shares of SIG
at the market price on the first day of the Term. Executive's stock options
shall be issued pursuant to the Xxxxxx International Group, Inc. 1996 Stock
Option Plan and a Stock Option Agreement with respect thereto which shall be
substantially in the form of Exhibit A attached hereto. The options shall vest
and become exercisable by the Executive pro-rata over a three (3) year period
from the date of grant.
3. Termination of Executive's Employment
3.1 Termination of Employment and Severance Pay. Executive's employment
under this Agreement may be terminated by the Company at any time for any
reason; provided, however, that if Executive's employment is terminated for any
reason other than for cause, he shall receive, as severance pay, an amount equal
to his salary for a period of one (1) year from the date of termination of
employment. Further, if Executive shall be terminated without cause, receipt of
severance payments are conditioned upon execution by Executive and the Company
of that mutual Agreement of Release and Waiver attached hereto as Exhibit B.
3.2 Cause. For purposes of this Section 3, "cause" shall mean:
(a) the Executive being convicted in the United States of America,
any State therein, or the District of Columbia, or in Canada
or any Province therein (each, a "Relevant Jurisdiction"), of
a crime for which the maximum penalty may include imprisonment
for one year or longer (a "felony") or the Executive having
entered against him or consenting to any judgment, decree or
order (whether criminal or otherwise) based upon fraudulent
conduct or violation of securities laws;
(b) the Executive's being indicted for, charged with or otherwise
the subject of any formal proceeding (criminal or otherwise)
in connection with any felony, fraudulent conduct or violation
of securities laws, in a case brought by a law enforcement or
securities regulatory official, agency or authority in a
Relevant Jurisdiction;
(c) the Executive engaging in fraud, or engaging in any unlawful
conduct relating to the Company or its business, in
either case as determined under the laws of any Relevant
Jurisdiction;
(d) the Executive breaching any provision of this Agreement;
(e) gross negligence or willful misconduct by the Executive in the
performance of his duties hereunder; or
(f) failure of the Executive to follow the written directive of
the Chief Executive Officer of Executive Vice President of the
Company such that the activities of the Executive are
detrimental to the business operations.
3.3 Change of Control. Notwithstanding any other provisions of this
Agreement, if (i) a Change of Control shall occur; and (ii) within twelve (12)
months of any such Change of Control, (a) Company (including its successors, if
any) shall require Executive to perform his duties and obligations pursuant to
this Agreement in a location other than the city of employment of Executive at
the time of such Change of Control, or (b) Company (including its successors, if
any) shall materially change the duties, authority or responsibilities of
Executive such that the same are materially inconsistent with the duties,
authority or responsibilities of Executive at the time of such Change of
Control, then Executive's employment under this Agreement shall be deemed to
have terminated for other than cause pursuant to Section 3.1 hereof, and
Executive shall be entitled to receive salary and benefits as provided in such
Section 3.1. In addition, Executive's stock options shall vest immediately and
Executive may exercise such options within four (4) weeks of the date of
termination of employment. In the event Executive shall fail to exercise the
options within four (4) weeks of termination of employment, the options shall
expire.
A Change of Control shall mean the inability of the Xxxxxx
family to cause the election of a majority of the members of the Board of
Directors of Goran Capital Inc., Xxxxxx International Group, Inc. or their
respective successors.
3.4 Disability. So long as otherwise permitted by law, if Executive has
become permanently disabled from performing his duties under this Agreement, the
Company's Chairman of the Board, may, in his discretion, determine that
Executive will not return to work and terminate his employment as provided
below. Upon any such termination for disability, Executive shall be entitled to
such disability, medical, life insurance, and other benefits as may be provided
generally for disabled employees of Company during the period he remains
disabled. Permanent disability shall be determined pursuant to the terms of
Executive's long term disability insurance policy provided by the Company. If
Company elects to terminate this Agreement based on such permanent disability,
such termination shall be for cause.
3.5 Indemnification. Executive shall be indemnified by Company (and,
where applicable, its subsidiaries) to the maximum extent permitted by
applicable law for actions undertaken for, or on behalf of, the Company and its
subsidiaries.
4. Non-Competition, Confidentiality and Trade Secrets
4.1 Noncompetition. In consideration of the Company's entering into
this Agreement and the compensation and benefits to be provided by the Company
to You hereunder, and further in consideration of Your exposure to proprietary
information of the Company, You agree as follows:
(a) Until the date of termination or expiration of this Agreement for
any reason (the "Date of Termination") You agree not to enter
into competitive endeavors and not to undertake any commercial
activity which is contrary to the best interests of the Company
or its affiliates, including, directly or indirectly, becoming
an employee, consultant, owner (except for passive investments
of not more than one percent (1%) of the outstanding shares of,
or any other equity interest in, any company or entity listed
or traded on a national securities exchange or in an
over-the-counter securities market), officer, agent or director
of, or otherwise participating in the management, operation,
control or profits of (a) any firm or person engaged in the
operation of a business engaged in the acquisition of insurance
businesses or (b) any firm or person which either directly
competes with a line or lines of business of the Company
accounting for five percent (5%) or more of the Company's gross
sales, revenues or earnings before taxes or derives five
percent (5%) or more of such firm's or person's gross sales,
revenues or earnings before taxes from a line or lines of
business which directly compete with the Company.
Notwithstanding any provision of this Agreement to the
contrary, You agree that Your breach of the provisions of this
Section 4.1(a) shall permit the Company to terminate Your
employment for cause.
(b) If Your employment is terminated by You, or by reason of Your
Disability, by the Company for cause, or pursuant to a notice
of non-renewal of this Agreement, then for one (1) year after
the Date of Termination, You agree not to become, directly or
indirectly, an employee, consultant, owner (except for passive
investments of not more than one percent (1%) of the
outstanding shares of, or any other equity interest in, any
company or entity listed or traded on a national securities
exchange or in an over-the-counter securities market), officer,
agent or director of, or otherwise to participate in the
management, operation, control or profits of, any firm or
person which directly competes with a business of the Company
which at the Date of Termination produced any class of products
or business accounting for five percent (5%) or more of the
Company's gross sales, revenues or earnings before taxes at
which the Date of Termination derived five percent (5%) or more
of such firm's or person's gross sales, revenues or earnings
before taxes. It is expressly agreed and understood that this
Section 4.1(b) shall not apply to a public accounting or
consulting firm.
(c) You acknowledge and agree that damages for breach of the
covenant not to compete in this Section 4.1 will be difficult
to determine and will not afford a full and adequate remedy,
and therefore agree that the Company shall be entitled to an
immediate injunction and restraining order (without the
necessity of a bond) to prevent such breach or threatened or
continued breach by You and any persons or entities acting for
or with You, without having to prove damages, and to all costs
and expenses (if a court or arbitrator determines that the
Executive has breached the covenant not to compete in this
Section 4.1, including reasonable attorneys' fees and costs, in
addition to any other remedies to which the Company may be
entitled at law or in equity. You and the Company agree that
the provisions of this covenant not to compete are reasonable
and necessary for the operation of the Company and its
subsidiaries. However, should any court or arbitrator determine
that any provision of this covenant not to compete is
unreasonable, either in period of time, geographical area, or
otherwise, the parties agree that this covenant not to compete
should be interpreted and enforced to the maximum extent which
such court or arbitrator deems reasonable.
4.2 Confidentiality. You shall not knowingly disclose or reveal to any
unauthorized person, during or after the Term, any trade secret or other
confidential information (as outlined in the Indiana Uniform Trade Secrets Act)
relating to the Company or any of its affiliates, or any of their respective
businesses or principals, and You confirm that such information is the exclusive
property of the Company and its affiliates. You agree to hold as the Company's
property all memoranda, books, papers, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company and its
affiliates, whether made by You or otherwise coming into Your possession and, on
termination of Your employment, or on demand of the Company at any time, to
deliver the same to the Company.
Any ideas, processes, characters, productions, schemes, titles, names,
formats, policies, adaptations, plots, slogans, catchwords, incidents,
treatment, and dialogue which You may conceive, create, organize, prepare or
produce during the period of Your employment and which ideas, processes, etc.
relate to any of the businesses of the Company, shall be owned by the Company
and its affiliates whether or not You should in fact execute an assignment
thereof to the Company, but You agree to execute any assignment thereof or other
instrument or document which may be reasonably necessary to protect and secure
such rights to the Company.
5. Miscellaneous
5.1 Amendment. This Agreement may be amended only in writing,
signed by both parties.
5.2 Entire Agreement. This Agreement contains the entire understanding
of the parties with regard to all matters contained herein. There are no other
agreements, conditions or representations, oral or written, expressed or
implied, with regard to the employment of Executive or the obligations of the
Company or the Executive. This Agreement supersedes all prior employment
contracts and non-competition agreements between the parties.
5.3 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be delivered either in person or by certified or
registered mail, return receipt requested. Any notice by mail shall be addressed
as follows:
If to the Company, to:
Chief Executive Officer
Xxxxxx International Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
If to Executive, to:
Xxxxx Xxxxxxxx
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or to such other addresses as one party may designate in writing to the other
party from time to time.
5.4 Waiver of Breach. Any waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
5.5 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
5.6 Governing Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Indiana, without giving
effect to conflict of law principles.
5.7 Headings. The headings of articles and sections herein are included
solely for convenience and reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
5.8 Counterparts. This Agreement may be executed by either of the
parties in counterparts, each of which shall be deemed to be an original, but
all such counterparts shall constitute a single instrument.
5.9 Survival. Company's obligations under Section 3.1 and Executive's
obligations under Section 4 shall survive the termination and expiration of this
Agreement in accordance with the specific provisions of those Paragraphs and
Sections and this Agreement in its entirety shall be binding upon, and inure to
the benefit of, the successors and assigns of the parties hereto.
5.10 Mutuality. This Agreement is mutually binding on Goran and SIG.
5.11 Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by You and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
subsequent time.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the _____ day of January, 2000.
("Company")
GORAN CAPITAL INC.
By:________________________________
Title:______________________________
XXXXXX INTERNATIONAL GROUP, INC.
By:________________________________
Title:______________________________
XXXXX XXXXXXXX
("Executive")
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