Exhibit 10.11
NON-COMPETITION AGREEMENT
(hereinafter referred to as the "Agreement")
This Agreement, entered into this ____ day of December, 2002, by and
between American Financial Group, Inc., an Ohio corporation ("AFG") and Infinity
Property and Casualty Corporation, an Ohio corporation ("Company").
WITNESSETH
WHEREAS, AFG, through its wholly-owned subsidiary, American Premier
Underwriters, Inc. ("APU") has sponsored the formation of Company;
WHEREAS, Company has filed a registration statement under the
Securities Act for the purpose of selling a portion of the common shares owned
by APU;
WHEREAS, Company wishes to secure AFG's agreement not to compete with
Company and its Subsidiaries in order to enable Company and its Subsidiaries to
successfully conduct personal automobile insurance business written through
independent agents.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations contained herein, the parties hereto agree as follows:
1. DEFINITIONS. Terms used herein without definition shall have the
meaning set forth in the Formation and Separation Agreement.
2. NON-COMPETITION.
(a) Except as set forth in this Agreement for a period of five
years following the Closing Date (the "Restricted Period") AFG shall
not, and shall not permit any of its Post-Closing Subsidiaries to:
(i) offer, issue or sell, directly or indirectly
within the United States, personal automobile insurance
written through independent agents; or
(ii) employ, offer to employ or solicit with a view
to employment any person employed by the Company whose annual
base salary exceeds $50,000; provided, that the foregoing will
not prevent AFG from soliciting or hiring any such person if
such person's employment has been terminated, without cause,
by the Company.
(b) Notwithstanding any other provision of this Section 2 to
the contrary, neither AFG nor any of its Post-Closing Subsidiaries is
prohibited from:
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(i) engaging in any line of business in which it is
engaged at completion of the Public Offering, including,
without limitation, the offering of personal automobile
insurance policies through Mid-Continent Casualty Company and
its wholly-owned subsidiaries ("Mid-Continent"), but only
within those states where Mid-Continent is offering personal
automobile insurance policies at the time of the completion of
the Public Offering; or
(ii) acquiring an interest in any Person engaged in
any line of business except for acquisitions of controlling
interests, whether in a single transaction or series of
transactions, in any Person or Persons with, in the aggregate,
$100,000,000 or more in gross annual written premiums, or,
with respect to one Person, 50% or more of its gross revenues
(excluding investment income and realized investment gains and
losses), attributable to the writing of personal automobile
insurance based on the most recent full fiscal year for which
financial statements are available (a "PERMITTED ACQUIREE"),
provided further, however, that AFG and any of its
Post-Closing Subsidiaries may acquire a controlling interest
in a Person that is not a Permitted Acquiree if AFG or such
Post-Closing Subsidiary promptly divests the personal
automobile insurance operations of such Person. For purposes
of this Agreement, a "controlling interest" in a Person means
having the power to direct or cause the direction of
management and policies of such Person through the ownership
of voting securities.
(c) Section 2(a)(i) and (ii) shall also be binding upon any
person who has a controlling interest in AFG as of the Closing Date
until such time, however, that the person ceases to have a controlling
interest in AFG. AFG shall cause each such person to comply with the
terms and conditions hereof.
(d) Section 2(a)(i) and (ii) shall not be binding upon a
Post-Closing Subsidiary of AFG after the time such Person ceases to be
a Post-Closing Subsidiary of AFG. For avoidance of doubt, Section
2(a)(i) and (ii) also does not apply to any person which on or after
the Closing Date becomes an Affiliate (other than a Post-Closing
Subsidiary) of AFG, including any person that acquires all or
substantially all of the capital stock or assets of AFG.
(e) The Company and AFG agree that money damages alone would
not be a sufficient remedy for any breach of this Section 2 by AFG, its
Post-Closing Subsidiaries, or any person having a controlling interest
in AFG, and that, in addition to all other remedies, including monetary
relief, the Company shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach.
3. NO INCONSISTENT ACTIONS. The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with,
or to avoid
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or evade, the provisions or essential intent of this Agreement. Furthermore, it
is the intent of the parties hereto to act in a fair and reasonable manner with
respect to the interpretation and application of the provisions of this
Agreement.
4. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law, rule or regulation
or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
AMERICAN FINANCIAL GROUP, INC.
By:
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Name:
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Title:
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INFINITY PROPERTY AND CASUALTY
CORPORATION
By:
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Name:
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Title:
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