Exhibit 10.1.1
EXECUTIVE COMPENSATION AGREEMENT
This Executive Compensation Agreement dated as of the 18th day of November,
1997, between Rushmore Financial Group, Inc., a Texas Corporation (hereinafter
referred to as "Rushmore") and Xxxxx X Xxxxx, Xx., (hereinafter referred to as
"Officer").
WITNESSETH:
WHEREAS, Officer is President and Chief Operating Officer of Rushmore
(Rushmore, its subsidiaries and RSC are hereinafter collectively referred to as
the "Companies"), and Officer has direct supervisory responsibilities for all
functions of the Companies; and
WHEREAS, Rushmore desires that Officer continue to use his experience and
abilities in the business of the Companies in a capacity similar to that in
which he has heretofore served; and
WHEREAS, Officer desires to accept such employment upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is hereby agreed as follows:
1. Employment. Rushmore hereby agrees to continue to employ Officer and
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Officer hereby agrees to continue to serve Rushmore as President and Chief
Executive Officer of Rushmore and in other capacities similar to those in
which he has heretofore served, for the term and on the conditions
hereinafter set forth. Officer shall have such executive duties to
Companies during the term of this Agreement as shall be determined by the
Board of Directors of Rushmore; however, Officer shall not be assigned to a
position which shall substantially diminish his prestige or responsibility
compared to that which he has heretofore enjoyed with Rushmore. Subject to
the foregoing, Officer hereby agrees to serve in any comparable executive
position in the State of Texas to which he shall be directed by the Board
of Directors of Rushmore, excluding service in the insurance related
businesses of Rushmore, and further agrees to use his best efforts to
promote the efficient and profitable operation of the business of Rushmore.
2. Term of Employment. The term of Officer's employment shall continue
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subject to the provisions of this Agreement, commencing as of the date
hereof, until December 31, 2000. Beginning January 1, 1998, and on the
first day of each month thereafter, the term shall annually be extended for
a successive additional one-month period unless either party notifies the
other that it intends to terminate this Agreement. If such a notice is
given, this Agreement will terminate on the last day of the term of this
Agreement.
3. Compensation.
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a. Base Compensation. As base compensation for services provided
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pursuant to this Agreement, Rushmore shall initially pay Officer
compensation at the rate of $138,000.00 per year, which amount shall
be paid beginning January 1, 1998. Within three months prior to each
January 1st, the Board of Directors of Rushmore will evaluate the
performance of Officer and the compensation paid to executives in
other companies in the Financial Services Sector of similar size and
scope of operations, during the previous year and fix his Base
Compensation for the next following year at an amount which shall not
be less than the prior year's Base Compensation as determined by the
Board of Directors. When a new Base Compensation is fixed by the
Board of Directors of Rushmore under this paragraph, it shall become
the new Base Compensation and thereafter the Base Compensation shall
not be less than that amount, without regard to any elective deferral
of compensation by Officer. The Base Compensation provided for in
this Paragraph 3 shall be payable in equal semimonthly installments
on the first and fifteenth business day of each month.
b. Additional Compensation. Officer shall also earn commissions and
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overrides for accounts serviced by him personally as broker, and
override commissions on commissions earned by persons introduced by
Officer to Rushmore and its subsidiaries or affiliates, in accordance
with the commission rates applicable to him, which shall be paid
semimonthly as provided above. The Board of Directors of Rushmore
reserves the right to pay to Officer compensation and any other bonus
or incentive compensation, in money, stock options, or any other
form, as the Board in its discretion deems appropriate. The total of
the Base Compensation and Additional Compensation shall be Combined
Compensation hereunder. In any year in which Officer shall elect to
defer a portion of the Base Compensation to which he is entitled,
such deferred amount shall be paid to Officer in the following year
of this Agreement or its termination.
c. Reimbursement. Rushmore shall provide Officer with an automobile, or
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an allowance for such, for his business use and pay all expenses of
operating it. So long as Officer shall be employed by Rushmore, he
shall be entitled and authorized to incur reasonable and necessary
expenses in connection with or related to his business duties,
including without limitation, expenses for travel, entertainment,
maintaining membership in various clubs and similar expenses.
Rushmore will pay all such expenses directly or will reimburse
Officer for them.
4. Participation in Employee Benefit Programs. Officer will be entitled to
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participate on the same basis as other executive employees in any employee
benefit programs presently in force or subsequently adopted by Rushmore,
including such pension and profit-sharing plans, hospitalization, medical and
health and accident insurance programs, policies and
benefits, life insurance programs and pension and retirement benefit plans
as may from time to time be in effect.
5. Payments Upon Death or Disability
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a. In the event that Officer should die, Rushmore shall pay to the
beneficiary as may have been designated in writing by Officer or,
failing such designation, to Officer's estate, the sum of three (3)
years' Combined Compensation at the then existing rate. Such payment
shall be made either in cash within one hundred twenty (120) days
after Officer's death or disability, or in thirty-sixty (36) equal
monthly installments, as determined by Rushmore.
b. Rushmore shall acquire for the benefit of Officer, disability
insurance to pay to Officer a benefit of 75% of his Combined
Compensation for the last complete year of employment, in the event
Officer shall become totally disabled. Officer's occasional absence
from work for reasonable periods of time because of sickness (not
resulting in total disability) shall not result in any adjustment in
his compensation or rights under this Agreement. For the purpose of
this Agreement, the term "totally disabled" or "total disability"
mean Officer's inability on account of sickness or accident to
regularly engage or to adequately perform his assigned duties under
this Agreement.
6. Severance Pay Upon Termination. In the event Officer's employment is
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terminated by Rushmore, except for "cause" and except for Officer's death or
total disability, Rushmore shall pay to Officer as severance pay the sum of
three years' Base Compensation at the then existing rate, plus any sums due in
respect of increases in Base Compensation pursuant to Paragraph 3(a) hereof.
Such payment shall be made in thirty-sixty (36) equal monthly installments.
Termination for "cause" shall mean termination by Rushmore for any of the
following reasons:
a. Willfully and significantly damaging Rushmore's property, business,
reputation or goodwill;
b. The commission of a felony;
c. Stealing, dishonesty, fraud or embezzlement;
d. Deliberate neglect of duty, or resignation.
Notwithstanding any other provision of this Agreement, if during any period of
time, Officer receives severance pay pursuant to this Paragraph 6 and
concurrently therewith is paid any Combined Compensation (as defined in
Paragraph 3(b) hereof), then the amount of severance pay to which Officer would
otherwise be entitled hereunder shall be reduced during such period by an amount
equal to the Combined Compensation paid during such period.
7. TRADE SECRETS AND CONFIDENTIAL INFORMATION. During the term of this
Agreement, Officer will have access to customer lists and compilations of
information and records specific to and regularly used in the operation of
the business of Rushmore and its subsidiaries including RISI. Officer
acknowledges that such information constitutes valuable and confidential
information of the Rushmore. Officer shall not disclose any of the
aforesaid private company secrets, directly or indirectly, nor use them in
any way, either during the term of this Agreement or after termination of
employment. All files, records, electronic and magnetic files, documents,
specifications, equipment and similar information relating to the business
of Rushmore, whether prepared by Officer or otherwise coming into Officer's
possession, shall remain the exclusive property of Rushmore and shall not
be removed from the premises of Rushmore except as shall be necessary for
Officer to perform Officer's duties under this Agreement. Upon termination
of this Agreement for any reason, Officer will deliver all such materials
in his possession and all copies thereof to Rushmore.
8. RESTRICTIVE COVENANTS. In consideration the severance provisions of this
Agreement and of the provision to Officer of Rushmore's trade secrets and
confidential information, and in order to protect the rights of Rushmore
and its subsidiaries including RISI to its trade secrets, confidential
information, and client relationships, the Officer hereby agrees as
follows:
8.1 Officer agrees that during the term of this Agreement and for a
period of two (2) years following any termination of employment, Officer
shall not be an officer, director, employee, agent or representative, or an
owner of more than five percent (5%) of the outstanding capital stock of
any corporation, or an owner of any interest in, or employee, agent or
representative of, any other form of business association, sole
proprietorship or partnership that solicits, hires (whether or not
solicited) or otherwise attempts to induce any employees, agents or
representatives of Rushmore and its subsidiaries including RISI to
terminate their position as employee, agent or representative therewith.
8.2 Officer agrees that, during the term of this Agreement and for a
period of two (2) years following termination for any reason, Officer shall
not, directly or indirectly by being an officer, director, employee, agent,
representative or consultant, or a record or beneficial owner of more than
five percent of the outstanding capital stock of any corporation or an
owner of any interest in, or employee of, any other form of business
association, sole proprietorship or partnership, conduct a financial
services business or organization which engages or participates, directly
or indirectly, in any business or activity that is engaged in the sale of
insurance, securities or other investment products or otherwise competes
with Rushmore and its subsidiaries including RISI anywhere within the State
of Texas or any city of the United States in which the Rushmore and its
subsidiaries including RISI maintains a retail office.
8.3 In the event that any adjudicative body shall finally hold that this
Section 9 constitutes an unreasonable restriction upon Officer, the parties
hereby expressly agree
that the provisions of this Section 9 shall not be rendered void, but shall
apply as to time and territory or to such other extent as such body may
indicate constitutes a reasonable restriction under the circumstances
involved.
8.4 Officer agrees that irreparable harm would occur if any of the
provisions of Section 7 or 8 were breached and that the Company shall be
entitled to obtain an injunction or other equitable relief to enforce
specifically the provisions thereof in any court of competent jurisdiction.
9. Vacation/Sick Days. Officer shall be entitled to an annual vacation of
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three (3) weeks each year at full compensation at a time mutually
satisfactory to Rushmore and Officer. Unused vacation and sick days may be
accrued indefinitely.
10. Approval by the Board of Directors. This Agreement has been approved by
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the Board of Directors of Rushmore.
11. Agreement is Personal. This Agreement is a personal agreement and the
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rights and interests hereunder (except that of Rushmore) may not be sold,
transferred, assigned, pledged or hypothecated. This Agreement shall be
binding on the heirs, executors and administrators of Officer and on the
successors and assigns of Rushmore. During, Officer's lifetime, the parties
hereto by mutual agreement may amend, modify or rescind this Agreement
without the consent of any other person.
12. Severability of Provisions. If any of the provisions of this Agreement
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shall be held invalid, the remainder of this Agreement shall not be
affected thereby.
13. Governing Law. This instrument contains the entire agreement between the
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parties and shall be governed by the laws of the State of Texas. It may be
amended only by agreement in writing signed by each of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
RUSHMORE FINANCIAL GROUP, INC.
By: /s/ Xxx X. Xxxxx
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Xxx X. Xxxxx, Secretary
/s/ Xxxxx X. (Xxxxx) Xxxxx, Jr.
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Xxxxx M (Xxxxx) Xxxxx, Jr.
