EXHIBIT 10.14
CAPITAL TITLE AGENCY, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of this 17th day of June, 1997, by and between
CAPITAL TITLE AGENCY, INC., an Arizona corporation ("Company"), and XXXXXX X.
XXXXXXXXXXX, ("Employee").
WITNESSETH:
WHEREAS, Employee has broad-based experience in the title insurance agency
industry, and Company desires to employ him and to assure itself of continued
availability of his services for the Company's benefit, and Employee is willing
to accept such employment and to perform such services, all in accordance with
the terms herein contained.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and intending to be legally bound hereby, the parties agree as
follows:
1. EMPLOYMENT. The Company agrees to employ the Employee and the Employee
agrees to be hired by the Company with primary job responsibility in employee
recruitment, marketing and expansion of Company operations at strategic
locations throughout Maricopa County. Employee shall report to and be supervised
by Xxxxxx X. Head, Chief Executive Officer, or such other supervisor as the
Board of Directors may hereafter designate from time to time. In the performance
of his duties, Employee shall support the recruitment and marketing
responsibilities of Xxxxx X. Xxxxxxxx and Xxxx Xxxxxxxxxxxx. Additionally,
Employee shall serve with those two and the CEO on an executive team, the
purpose of which shall be to promote the Company's expansion strategy, to
improve the quality and delivery of Company services, and to improve the
efficiency and profitability of the Company's operations on an on-going basis.
2. EXTENT OF SERVICES. During the employment period, except for illness and
for reasonable vacations, Employee shall devote his full-time attention, skill
and efforts to the duties under this "Agreement."
3. TERM. The employment period shall be for a term commencing on November
10, 1997, and ending June 30, in the year 2000.
4. COMPENSATION. For performing the services required to be performed by
this Agreement during the employment period, Employee shall be compensated by
the Company as follows:
A. A fixed salary at the rate of One Hundred Twenty Thousand Dollars
($120,000) per year, payable twice monthly in accordance with
normal Company policy.
B. Additional compensation equal to 3.333% of the Company's pre-tax
net profit on operations in Maricopa County calculated according
to generally acceptable accounting principles applicable to title
insurance agencies consistently applied, prorated in the first
year of employment for the period remaining in the Company's
fiscal year if less than twelve (12) months, such compensation to
be determined and paid within three months following the end of
each succeeding fiscal year. Pre-tax profits for purposes of this
Agreement shall be net taxable income attributable to operations
in Maricopa County as disclosed by the Company's federal income
tax returns and related internal records allocating income and
expenses separately as to the respective counties in which the
Company shall be conducting its Arizona business, but exclusive
of bonuses, dividends or other remuneration to stockholders,
directors or executive committees. Copies of the Company's
federal tax returns and records of results in each county of
operation shall be furnished to Employee when received by the
Company's accounting firm in final form. At the Company's option,
estimated compensation may be paid in successive fiscal years
with appropriate adjustments spread over twelve (12) month
periods in the event of any under or over estimated payments made
pursuant to this paragraph.
C. For purposes of subparagraph "B," Company operations shall
include revenues derived from subsidiaries or related title
business generated on Maricopa County real estate transactions.
D. Reimbursement for all necessary and pre-approved travel and
entertainment expenses incurred by Employee on behalf of the
Company, not to exceed Two Thousand Dollars ($2,000) per month,
which expenses shall be incurred by the Employee and reimbursed
by the Company in accordance with normal Company practices and
budget or other restrictions that may be imposed by the Board of
Directors.
5. SUPPLEMENTAL BENEFITS. During the term of this agreement, Employee shall
receive health insurance, vacation and other Employee benefits pursuant to the
terms and as set forth in the Company's Employee Handbook initially published on
October 1, 1993, as amended, a receipt of a copy of which is hereby acknowledged
by Employee.
6. DISABILITY AND INCAPACITY. If Employee shall be unable to perform his
duties by reason of disability or impairment of health for at least ninety (90)
consecutive calendar days, Company shall have the right to terminate this
Agreement by giving written notice to that effect, provided that at the time
such notice is given such disability or impairment is still continuing.
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7. DEATH. In the event of Employee's death while employed by Company, this
Agreement shall terminate at the end of the calendar month in which Employee's
death occurs, and his legal representative shall be entitled to receive the
compensation due through the last day of the calendar month in which his death
shall have occurred, and any other amounts which may have accrued to Employee
for periods prior to such date.
8. COMPENSATION ON TERMINATION.
A. Prior to the end of the employment period of this Agreement, if
the Company shall terminate employment of the Employee without
"just cause" as hereinafter defined, or if the Employee shall
terminate his employment for "good reason" as hereinafter
defined, then the Company shall pay to the Employee his aggregate
compensation, and such other amounts as shall be necessary to
continue any supplemental Employee benefits and prerequisites of
office which were provided the Employee prior to such
termination. In the event such benefits or prerequisites of
office are not continuable, the Employee shall be paid their cash
equivalent. All payments hereunder shall be payable during the
remaining term of this Agreement as if it had not been
terminated. Notwithstanding the foregoing, Employee shall have a
duty to mitigate his damages in the event of any such termination
without good cause and, to the extent his reasonable efforts
generate or could have generated replacement income during the
remaining term of this Agreement, such income shall be credited
to Company against the obligation to pay additional salary and
benefits pursuant to this paragraph. Company may withhold
payments for such period that Employee refuses to render all
reasonable or necessary cooperation to enable Company (1) to
determine the extent of any replacement income that may have been
paid or may be payable to Employee during which time Company may
be obligated to continue paying compensation after termination
pursuant to this paragraph, and (2) to determine whether Company
has from time to time exerted reasonable efforts to obtain
replacement income.
B. In the event of Employee's death or termination due to
disability, or if the Company shall terminate the employment of
the Employee for "just cause", or if the Employee shall terminate
his employment without "good reason", then the Company shall pay
the Employee his salary to the effective date of such
termination, and any accrued vacation not used, but no added
compensation as otherwise provided under paragraph 4.B shall be
deemed earned in any of such events.
C. As used herein, "just cause" shall mean (i) a material breach by
the Employee of this Agreement, (ii) incapacity of the Employee
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by reason of health or incompetence to perform his duties for
ninety (90) consecutive calendar days, or (iii) dishonesty,
theft, embezzlement or conviction of a felony. As used herein,
"good reason" shall mean a material breach by the Company of this
Agreement including but not limited to a material change in
Employee's duties as President (Maricopa County Operations) of
the Company.
9. ASSIGNMENT. The rights and obligations of the Company hereunder shall
inure to the benefit of, and be binding upon, the Company and any other
corporation or entity into which the Company shall be merged, or to which
substantially all of the assets of the Company shall be transferred and such
other corporation or entity shall thereupon be deemed the "Company" hereunder.
The rights and obligations of the Employee hereunder shall not be assignable
except as to compensation earned but not paid when due.
10. PROPRIETARY PROTECTION.
A. NON-COMPETITION. At all times while employed by Company, and for
a period of one (1) year after the date on which the Employee
ceases to be actively employed by the Company, the Employee shall
not compete in any way with the business of the Company anywhere
within Maricopa County, Arizona, whether directly or indirectly,
as an employee, agent, independent contractor, owner, or
otherwise. In addition, during such one (1) year period, the
Employee shall not directly or indirectly enter into or in any
manner take part in any other business or entity that competes
with the Company.
B. CONFIDENTIALITY. At all times while employed by Company, and
continuing after termination of such relationship without
limitation as to time, the Employee shall not directly or
indirectly use or disclose to others any confidential or
proprietary information or trade secrets of the Company. For the
purpose of this Agreement, confidential or proprietary
information includes all information regarding the Company,
whether disclosed by Company or originated by Employee while
employed by the Company, including, without limitation, Company's
policies and procedures, Company's suppliers and supply
information, Company's customer lists and customer information
(whether the customer is a past, present or prospective
customer), pricing, sales and marketing information, financial
and technical information, manufacturing processes, inventions
and know-how. Employee acknowledges that all trade secrets,
inventions, know-how, and all other information described in this
paragraph developed by Employee during the course of employment
belongs to Company.
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C. NON-PIRACY OF EMPLOYEES. Employee recognizes that Company's other
Employees are a valuable resource of the Company. Accordingly,
Employee agrees that for a period of one (1) year after the date
on which the Employee ceases to be actively employed by the
Company, Employee will not, alone or in conjunction with others,
solicit, induce, or recruit any Employee of the Company to leave
the Company's employment. Employee shall never, at any time,
attempt to induce another Employee of Company to violate a
contract of employment for a specified term of years.
D. CUSTOMER ANTI-PIRACY. Employee agrees that for a period of six
(6) months after the date on which Employee ceases to be actively
employed by the Company, Employee will not directly or indirectly
in any capacity whatsoever, either as an Employee, officer,
director, stockholder, proprietor, partner, joint venturer,
consultant, or otherwise, (a) induce any customer (past or
present) to patronize any company that is in competition with the
Company's business; (b) canvass, solicit, or accept any similar
business from any past or present customer of the Company; or (c)
request or advise any past or present customer of the Company to
withdraw, curtail, or cancel its business with the Company.
E. EMPLOYEE ACKNOWLEDGEMENT OF FAIRNESS. Employee acknowledges and
agrees that Employee's services to the Company are of a special
character with unique value to the Company, and that the
restrictive covenants set forth in this Agreement are reasonable,
fair and valid in scope or activity, duration, territory, and in
all other respects.
F. SEVERABILITY AND REFORMATION. If any court of competent
jurisdiction determines that any of the restrictive covenants in
this Agreement, or any part thereof, is or are invalid or
unenforceable, the remainder of the restrictive covenants shall
not thereby be affected and shall be given full effect, without
regard to invalid portions. If any of the provisions of this
paragraph should ever be deemed to exceed the temporal,
geographic, or occupational limitations permitted by applicable
laws, those provisions shall be and are hereby reformed to the
maximum temporal, geographic, or occupational limitations
permitted by law. In any litigation concerning this Agreement,
the prevailing party shall be entitled to recover reasonable
attorneys' fees incurred.
G. BREACH OF OBLIGATIONS BY EMPLOYEE. In the event of a breach or
threatened breach by the Employee of the obligations set forth in
subparagraphs A through D above, the Company shall be entitled to
apply to any appropriate court for an injunction restraining the
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Employee; provided, however, that this paragraph shall not be
construed as prohibiting the Company from pursuing any other
available remedies for such breach or threatened breach
including, but not limited to, the recovery of damages from the
Employee.
H. BREACH BY THE COMPANY. In the event the Company terminates
Employee without just cause, subparagraph "A" shall not be
enforceable, however, in any event, all other subparagraphs of
this section shall remain fully enforceable.
11. OPTION TO PURCHASE STOCK OF PUBLIC COMPANY.
A. On execution of this Agreement by both parties, the Company shall
cause the Capital Title Group, Inc. to grant an option in favor
of Employee, subject to the conditions set forth below, to
purchase up to 100,000 shares of the common stock of such Public
Company.
B. The purchase price for such option stock shall be One Dollar
($1.00) per share. Employee shall be entitled to exercise that
option as to not more than Fifty (50%) Percent of such option
shares after two full years of employment. The option may be
exercised as to the remaining Fifty (50%) Percent no later than
30 days after expiration of the term of this agreement.
C. All other terms of such option shall be as set forth in the
standard employee option agreement , receipt of a copy of which
Employee hereby acknowledges.
12. AGREEMENT. The entire agreement of the parties is herein written fully
and supersedes any prior agreement between the parties hereto, and the parties
hereto are not bound by any agreements, understandings, conditions or
inducements otherwise than are expressly set forth and stipulated hereunder.
13. NOTICES. All notices required to be sent pursuant to the terms of this
Agreement shall be sent by first class mail, postage prepaid, to the parties
hereto at the following addresses, or such other addresses as they may hereafter
designate in writing:
COMPANY:
CAPITAL TITLE AGENCY, INC.
Attention: Xxxxxx X. Head
000 Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxx 00000
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EMPLOYEE:
XXXXXX X. XXXXXXXXXXX
0000 X. Xxxx Xxx
Xxxxxxxx, XX 00000
14. ATTORNEY FEES. In the event of any controversy, claim or dispute
between the parties affecting or relating to the subject matter of performance
of this Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party all of its reasonable attorney fees.
15. GOVERNING LAW. This Agreement shall be construed both to as validity
and performance, and enforced in accordance with and governed by the laws of the
State of Arizona.
16. NORWEST NON-COMPETE AGREEMENT.. Employee has disclosed to the Company
that he is under covenant to Norwest Corporation, as successor in interest to
United Title Agency of Arizona, Inc., pursuant to a Non-Competition Agreement
dated December 15, 1993. Employee represents and warrants that the obligations
under such agreement expire on November 7, 1997. Employee further represents and
warrants that he has not received, and has not been given or promised, any
incentive or inducement by the Company to violate the terms of such Agreement.
Employee further agrees that in the event the Company learns or has good reason
to believe that any time prior to expiration of such Agreement, Employee shall
have violated its terms in any material particular, the Company shall have the
option to terminate this agreement without any further obligation to Employee.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement as of
the day above written.
COMPANY: EMPLOYEE:
CAPITAL TITLE AGENCY, INC. /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------
XXXXXX X. XXXXXXXXXXX
By /s/ Xxxxxx X. Head
---------------------------
Xxxxxx X. Head
Its CEO
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CAPITAL TITLE AGENCY, INC.
AMENDMENT TO XXXXXXXXXXX EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 3rd day of February, 1998, and amends the
Employment Agreement of June 17, 1997, by and between CAPITAL TITLE AGENCY, INC.
(the "Company") and XXXXXX X. XXXXXXXXXXX (the "Employee), effective and
commencing as of February 1, 1998, in the following particulars:
1. Employee's title shall be President of the Company in charge of Arizona
operations, and Executive Vice President of CAPITAL TITLE GROUP, INC. (hereafter
"CTGI"). Employee shall perform his duties in accordance with policies and
practices of CTGI. He shall report to and be supervised by XXXXXX X. HEAD, Chief
Executive Officer of the Company, or such other supervisor as the Board of
Directors of the Company or the Board of Directors of CTGI may hereafter
designate from time to time.
2. Employee's fixed salary shall be increased to $132,000 annually.
Employee's Paragraph 4B compensation shall be equal 3.333% of the Company's
pre-tax net profit on Maricopa County business and 5% on all other Arizona
agency operations; provided, however, that irrespective of the level of net
profits realized by the Company in any given county, Paragraph 4B compensation
shall not exceed $10,000 per county per year, nor be calculated on aggregate net
profits on Arizona operations in excess of the first $200,000 thereof annually.
In any event, Paragraph 4B compensation is calculated only with respect to
current year net profits, and no carry forwards or other adjustments are
permitted in successive years.
3. Paragraph C is clarified in this particular: the term "Company
operations" does not include net profits of business entities owned or
controlled by CTGI, and which are not subsidiaries of the Company.
4. Subject to the foregoing amendments, the terms of the subject Employment
Agreement remain in full force and effect.
5. Employee is granted an additional option to purchase the common stock of
CTGI under the same terms, conditions and time limits set forth in Paragraph 11
of the subject Employment Agreement, limited to 25,000 shares at $2.00 per
share.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement.
COMPANY: EMPLOYEE:
CAPITAL TITLE AGENCY, INC.
By /s/ Xxxxxx X. Head /s/ Xxxxxx X. Xxxxxxxxxxx
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XXXXXX X. HEAD, XXXXXX X. XXXXXXXXXXX
Chief Executive Officer
