EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made effective
this 9th day of February, 1998 by and among Xxx X. Xxxxxxx (the "Executive"),
and Safe Auto Group, Inc., an Ohio corporation.
BACKGROUND INFORMATION
A. Executive has four and one half (4-1/2) years experience in the
insurance industry and considerable experience in the retail industry, and has
substantial marketing expertise.
B. Safe Auto Group, Inc. and its subsidiaries (the "Company") desire to
continue to employ Executive and Executive desires to continue to be employed,
all on the terms and conditions of this Agreement.
PROVISIONS
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties hereto agree as follows:
1. Employment. Company hereby employs Executive as President of Company
upon all the terms and conditions hereof. Employee shall be employed "at will"
and either party may terminate this Agreement at any time upon at least thirty
(30) days prior written notice.
2. Duties.
(a) Executive shall be responsible for the overall operations of
the Company regarding advertising, media relations, sales and
personnel. Executive shall in all respects be subject to and
shall faithfully comply with the decisions and directions of
the Chief Executive Officer of Company.
(b) During the term of this Agreement, Executive agrees to devote
substantially all of his normal business time and attention
(reasonable vacations and periods of leave excepted) to the
affairs of Company and the promotion of its interest.
Executive shall at all times during his employment hereunder
conduct himself in a manner consistent with his position with
Company and shall not knowingly perform any act contrary to
the best interest of Company.
3. Compensation.
(a) As compensation for the services to be rendered by Executive,
Company shall pay to Executive an annual salary as determined
by the Board of Directors of the Company from time to time,
payable in accordance with Company's existing payroll
practices, which shall not be less than his salary as of the
date of this Agreement.
(b) At the end of each fiscal year of Company during the Initial
Term or any Renewal Term (a "Fiscal Year"), Executive may
receive a bonus as determined by the Board of Directors of the
Company; provided that Executive is employed by Company on the
last day of such Fiscal Year. The bonus, if any, for each
Fiscal Year shall be calculated and paid to Executive within
one hundred (100) days of the end of such Fiscal Year.
(c) Executive shall be entitled to all the rights, benefits and
privileges (including vacation, health insurance, pension or
other fringe benefits and compensation programs) that Company
may from time to time provide to its employees generally.
(d) Notwithstanding the foregoing, as long as Executive and Ari
are employed on a full-time basis by the Company, their annual
base salaries, any bonuses awarded to them by the Board of
Directors, and their fringe benefits shall be substantially
identical.
If Ari shall cease being employed for any reason and Xxx
becomes Chief Executive Officer, Xxx shall receive an
immediate twenty-five percent (25%) increase in his then
current annual base salary. In addition, his annual base
salary for each subsequent fiscal year shall be increased by a
percentage equal to or greater than one hundred fifty percent
(150%) of the percentage increase in the consumer price index
for all urban consumers, U.S. city average, all items reported
by the U.S. Department of Labor for the previous calendar
year.
4. Reimbursement of Expenses. Company shall reimburse Executive for all
disbursements or expenses reasonably incurred by him during the term of this
Agreement in connection with the performance of his duties hereunder. Such
reimbursement shall be made upon the presentation of expense vouchers or reports
in accordance with the standard procedures of the Company with respect to
expense items.
5. Termination. Executive's employment hereunder may be terminated by
Company for "cause" effective upon written notice of termination to Executive,
which shall be defined as the Company's reasonable belief that Executive has:
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(a) been convicted of a felony;
(b) intentionally caused material injury to the Company, its
employees, officers or property (including goodwill); or
(c) breached a material term or condition of this Agreement.
Upon termination "for cause," Executive shall be paid his salary through the
last day worked, and shall not be paid any severance pay under this Agreement.
6. Severance Pay. In the event Executive's employment is terminated by
the Company in accordance with Section 1 of this Agreement, Executive shall be
entitled to severance pay in the amount set forth below:
(a) If such termination occurs within five (5) years of the date
of this Agreement, Executive shall be entitled to severance
pay in an amount equal to his annual base salary from the
Company for the year in which his employment was terminated
multiplied by four (4).
(b) If such termination occurs after the first five (5) years of
the date of this Agreement but within ten (10) years of the
date of this Agreement, Executive shall be entitled to
severance pay in an amount equal to his annual base salary
from the Company for the year in which his employment was
terminated multiplied by three (3).
(c) If such termination occurs after the first ten (10) years of
the date of this Agreement but within fifteen (15) years of
the date of this Agreement, Executive shall be entitled to
severance pay in an amount equal to his annual base salary
from the Company for the year in which his employment was
terminated multiplied by two (2).
(d) If such termination occurs after fifteen (15) years of the
date of this Agreement, Executive shall be entitled to
severance pay in an amount equal to his annual base salary
from the Company for the year in which his employment was
terminated.
Such severance pay shall be paid to Executive, in the Company's discretion,
either (i) in a lump sum payment, or (ii) in a series of payments, in which each
payment is an amount equal to Executive's last paycheck immediately prior to his
termination and payable in accordance with Company's existing payroll practices.
In the event Executive's employment is terminated by the Company in accordance
with Section 5 of this Agreement, this Section 6 shall be null and void and of
no force or effect.
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7. Death, Incompetence or Disability.
(a) The death, Incompetency or Disability (both as defined below)
of Executive shall automatically terminate this Agreement
without the requirement of any notice to be given by Company.
In the event of termination by reason of death, Incompetency
or Disability, Company shall pay Executive or his estate (as
the case may be), any amounts due Executive under Section 3
hereof as of the date of death, Incompetency or Disability, no
later than sixty (60) days thereafter.
(b) "Incompetency" shall mean Executive is determined by a court
of competent jurisdiction to be incompetent.
(c) "Disability" shall mean that the Executive is not able to
perform his duties for ninety (90) days (regardless of whether
such days are consecutive or not) during any twelve (12) month
period during the Initial Term or any Renewal Term hereof.
8. Noncompete Covenant. During the period beginning on the effective
date hereof and continuing for as long as Employee is receiving severance pay
from the Company pursuant to Section 6 of this Agreement or, in any event,
continuing for not less than two (2) years following the termination of
Executive's employment with the Company by either party and for any reason,
Executive shall not, directly or indirectly, individually or in concert with any
other person, firm or entity, engage in any business activities which are
similar to those in which the Company shall then be engaged, in any state of the
United States where the Company is then licensed to do business, engaged in
business, or in the process of becoming engaged in or licensed to do business.
Further, during the aforesaid periods of time, Employee shall not disclose to
any person, firm or entity, nor use for his own benefit except as necessary in
the performance of his employment duties hereunder, any information concerning
the business of the Company that has not been publicly disseminated by the
Company.
9. Conflicting Agreements. Executive represents and warrants to Company
that he is free to enter into this Agreement and that he has not made and will
not make any agreements in conflict with this Agreement. Executive covenants
that he will not disclose to Company or use for Company's benefit any trade
secrets or confidential information that are the property of any third party.
10. Miscellaneous.
(a) This Agreement is based upon the personal services of
Executive and the rights and obligations of Executive shall
not be assignable. Nothing in this Agreement shall prohibit or
impair Company's right to assign all or any part of its
rights, duties or obligations under this
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Agreement pursuant to any merger, consolidation,
reorganization, sale of stock, sale of assets, change of name
or similar arrangement involving Company, and Executive and
Company hereby consent to any such assignment which shall be
effective upon the mailing of written notice thereof to
Executive.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio (regardless of
the laws that might be applicable under principles of
conflicts of laws) as to all matters, including but not
limited to matters of validity, construction, effect and
performance. Any controversy or claim arising out of or
relating to this contract shall be determined by arbitration
by three arbitrators in Columbus, Ohio in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction
thereof. Provided, however, that any claim for purely
equitable relief, such as injunction, may be brought in the
Franklin County Common Pleas Court, to the jurisdiction and
venue of which the parties hereby consent.
(c) This Agreement constitutes the entire understanding of the
parties with respect to the subject matter here and supersedes
all prior negotiations, discussions, undertakings and
agreements, except for that certain Stock Restriction and
Close Corporation Agreement executed by the parties, of even
date herewith. This Agreement may be amended or modified only
by a writing executed by the parties hereto. Both parties
having been represented by counsel in the drafting of this
Agreement, any ambiguity shall not be construed against either
party.
(d) All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person or two (2) business days
after it is mailed, certified, return receipt requested,
postage prepaid:
(i) If to Executive, addressed to:
Xxx X. Xxxxxxx
000 X. Xxxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
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(ii) if to Company, addressed to:
Safe Auto Group, Inc.
Xxx Xxxxx, Chief Executive Officer
0000 X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Any party hereto may, from time to time, by written notice to
the other party, designate a different address, which shall be
substituted for the one specified above for such party.
(e) This Agreement shall be binding upon the legal
representatives, heirs, successors and assigns of the
respective parties hereto.
(f) Any waiver by any party of any act, failure to act or breach
on the part of the other party shall not constitute a waiver
of such waiving party of any prior or subsequent act, failure
to act or breach by such other party.
(g) The subject headings of the various sections of this Agreement
are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its
provisions.
(h) This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement,
binding on all parties hereto, notwithstanding that all
parties are not signatories to the same counterpart.
(i) Consistent with the terms and conditions hereof, each party
hereto shall execute and deliver all instruments, certificates
and other documents and shall perform all other acts which the
other party may reasonably request in order to carry out this
Agreement and the transactions contemplated hereby.
(j) Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person other than the
parties hereto, and their permitted successors and assigns,
any rights or remedies under or by reason of this Agreement.
(k) The parties agree that if any part, term or provision of this
Agreement shall be found illegal and unenforceable by any
court of law, the remaining provisions shall be severable,
valid and enforceable in accordance with their terms.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
EXECUTIVE: COMPANY:
Safe Auto Group, Inc.,
an Ohio corporation
/s/ Xxx X. Xxxxxxx By: /s/ Xxx Xxxxx
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Xxx X. Xxxxxxx Xxx Xxxxx, Chief Executive Officer
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