EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), effective the 31st day of July,
2004 is made by and between Trustway Insurance Agencies, LLC, a Delaware limited
liability company (the "Company"), and Xxxxx X. Xxxx ("Employee") (collectively,
the "Parties").
WHEREAS, the Company desires to employ Employee and Employee desires to
accept such employment with the Company as set forth below;
WHEREAS, Employee will be employed in a position of trust and confidence;
WHEREAS, Employee acknowledges that Company has made a substantial
investment in time and resources in developing its business, services, products,
and customer relationships and that it is a legitimate business interest of the
Company to protect said investment and to retain the good will of its customers;
WHEREAS, The Company and Employee desire to set forth in writing all of
the covenants, terms, and conditions of their agreement and understanding as to
such employment; and
WHEREAS, the Parties acknowledge that Employee's employment with (and
compensation and benefits from) the Company and access to Company's trade
secrets are conditioned upon and in consideration for the Company's receipt of
such Agreement;
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein contained, and of other good and valuable consideration, including said
employment, compensation, benefits, and all other consideration to be provided
to Employee hereunder, which considerations are acknowledged by Employee to be
sufficient to support this Agreement and the covenants herein, the Parties
hereto, intending legally to be bound, agree as follows:
1. EMPLOYMENT AND DUTIES. The Company hereby employs Employee (and
Employee hereby accepts such employment) as President of the Company. Employee
agrees to serve in such capacity and to perform such duties, responsibilities,
and services that relate or are incidental to said capacity and that are
customary and consistent with Employee's employment as President as may be
reasonably requested and/or assigned to Employee from time to time by the Chief
Executive Officer and/or the Chairman of the Company's parent corporation,
AssuranceAmerica Corporation ("AssuranceAmerica"). Employee also agrees to
conduct all business hereunder in a lawful manner and in accordance with all
duly authorized policies of the Company.
2. TERM. Unless terminated sooner, this Agreement shall terminate on
December 31, 2005 (the "Initial Term"). This Agreement will be automatically
extended by additional one-year terms beginning on January 1 of each year
following the Initial Term unless either party, by written notice to the other
at least 90 days prior to December 31, causes this Agreement to cease to extend
automatically. Notwithstanding anything else herein to the contrary, all
post-
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termination obligations under Sections 5, 6, 7 and 8 shall survive termination
of the Agreement as provided herein.
3. COMPENSATION AND EMPLOYEE BENEFITS.
(a) Base Salary. Employee shall receive an annualized salary (the "Base
Salary") of One Hundred Fifty Thousand and No/100ths Dollars ($150,000.00)
during the Term, which shall be paid in accordance with the Company's regular
payroll practices and subject to any and all withholdings pursuant to applicable
law.
(b) Incentive Compensation. During the Initial Term Employee shall
receive a $1,923.08 biweekly bonus ("Bonus") which shall be paid in equal
biweekly installments in accordance with the Company's regular payroll
practices. In addition, in the fourth quarter of 2004 the Company and Employee
will mutually develop an incentive compensation arrangement for calendar year
2005 for the benefit of Employee based on the budget established for the Company
for 2005.
(c) Stock Option. Employee shall receive an option to purchase 300,000
shares of the Common Stock of AssuranceAmerica in the form attached hereto as
Exhibit A and such other options as may be granted by the Board of Directors of
AssuranceAmerica from time to time.
(d) Employee/Fringe Benefits. Upon employment, Employee shall be
eligible to participate in those standard employee benefit programs and fringe
employee benefits (including but not limited to any and all medical/dental/other
insurance plans or programs, paid vacation, etc.) generally made available to
officers of the Company, or if Employee shall so elect in writing, to other
employees of the Company, subject to any and all terms, conditions, and
eligibility requirements for said programs and benefits, as may from time to
time be prescribed by the Company. In addition, Employee shall receive an annual
car allowance of $600.00 per month during the term of this Agreement.
(e) Other Business Expenses. During the term of this Agreement the
Company shall also reimburse Employee for his actual out-of-pocket, business
expenses that are incurred by Employee and are reasonable and necessary in
relation to and in furtherance of Employee's performance of his duties to the
Company. Such reimbursement shall be subject to compliance with the Company's
reimbursement policies and the provision of substantiating documents of said
expenses as may be reasonably requested by the Company.
(f) Cessation of Compensation/Benefits. Except for any employee benefits
that continue or may continue pursuant to applicable federal and state law, all
compensation due to Employee and all other employee/fringe benefits that the
Company may provide to Employee from time to time shall immediately cease to
accrue upon any termination of Employee's employment, except as otherwise
provided in Section 4(d).
(g) Advances. Employee hereby acknowledges and agrees to repay to the
Company any advance(s) promptly on demand by the Company for such repayment.
Employee understands that the duty to repay any such advance(s) shall apply
regardless of when the advance(s) was made, for whatever purpose it was made,
and whether or not it was expressly made repayable at the time.
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4. TERMINATION. This Agreement may be terminated prior to the
expiration of the term as follows:
(a) Death. The Employee's employment hereunder shall terminate
automatically upon Employee's death. In such event, Employee's estate shall be
entitled to receive any earned and unpaid Base Salary, prorated through the date
of death, as well as any other amounts (including incentive compensation the
calculation of which shall be determined by the Board of Directors of the
Company) due in accordance with this Agreement.
(b) For Cause. The Company may terminate the Employee's employment
hereunder for Cause at any time upon notice to the Employee setting forth in
reasonable detail the nature of such Cause. In the event that the Company
terminates Employee's employment for Cause (or Employee resigns from his
employment with the Company), the Company shall not be obligated to pay any
salary or other compensation to Employee after the effective date of
termination, other than accrued and unpaid Base Salary earned through the date
of termination. As used in this Agreement, "Cause" shall mean: (i) the
Employee's repeated failure to perform, or gross negligence in the performance
of, his material duties and responsibilities hereunder and the continuance of
such failure or gross negligence for a period of thirty (30) days after written
notice to the Employee, which notice details in reasonable specificity such
failure or gross negligence; (ii) material breach by the Employee of any
provision of this Agreement (and, in only those cases where such material breach
is curable, the failure to cure such material breach within thirty (30) days
after written notice to the Employee, which notice details in reasonable
specificity such material breach); (iii) other conduct by the Employee that
involves a material violation of law or breach of fiduciary obligation on the
part of the Employee that is materially harmful to the business, interests,
reputation or prospects of the Company or any of its affiliates (and, in only
those cases where such conduct by Employee is curable, the failure to cure such
conduct within thirty (30) days after written notice to the Employee, which
notice details in reasonable specificity such conduct that involves a material
violation of law or breach of fiduciary obligations); and (iv) any other conduct
by the Employee that is materially harmful to the business, interests,
reputation or prospects of the Company or any of its affiliates (and, in only
those cases where such conduct by Employee is curable, the failure to cure such
conduct within thirty (30) days after written notice to Employee, which notice
details in reasonable specificity such conduct).
(c) Without Cause. The Company may terminate the Employee's employment
hereunder without Cause at any time upon notice to the Employee. In the event
that the Company terminates the Employee's employment without cause during the
Initial Term, the Company shall continue to pay Employee's Base Salary and Bonus
for the duration of the Initial Term in accordance with the Company's normal
payroll practices. In the event that the Company terminates the Employee's
employment without cause at any time after the Initial Term, the Company shall
continue to pay the Employee's Base Salary for a period of six (6) months from
the date of termination in accordance with the Company's normal payroll
practices. The Company shall also pay the Employee's COBRA premiums for the
period during with the Company is required by this subsection to continue to pay
the Employee's Base Salary.
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5. PROTECTIVE COVENANTS.
(a) Confidential Information and Trade Secrets. During Employee's
employment, the Parties acknowledge that Employee will have access to and
otherwise make use of, acquire, create, or add to, certain valuable, unique,
proprietary, and secret information of the Company (whether tangible or
intangible and whether or not electronically kept or stored), including
financial information, financial statements, drawings, designs, manuals,
business plans, processes, procedures, formulas, inventions, pricing policies,
customer and prospect lists and contacts, contracts, sources and identity of
vendors and contractors, financial information of customers and the Company, and
other proprietary documents, materials, or information indigenous to the
Company, its businesses and activities, or the manner in which the Company does
business, which is valuable to the Company in conducting its business because
the information is kept confidential and is not generally known to the Company's
competitors or to the general public ("Confidential Information"). Confidential
Information shall not include information if, and only to the extent that: (a)
is or becomes a part of the public domain through no act or omission of the
Employee; (b) was in the Employee's lawful possession prior to the disclosure
and had not been obtained by the Employee either directly or indirectly from the
Company; (c) is lawfully disclosed to the Employee by a third party without
restriction on disclosure; (d) is independently developed by the Employee other
than in his role as an employee with the Company; or (e) is disclosed by the
Employee pursuant to a requirement of a governmental agency, regulatory body or
by operation of law, provided that the Employee shall disclose only that part of
the Confidential Information which it is required to disclose and shall notify
the Company prior to such disclosure in a timely fashion in order to permit the
Company to attempt to prevent or restrict such disclosure should it so elect.
Employee acknowledges and agrees that to the extent that the Confidential
Information rises to the level of a trade secret under applicable law, then
Employee shall, during Employee's employment and for as long as such
Confidential Information remains a trade secret (or for the maximum period of
time allowed under applicable trade secret law), protect and maintain the
confidentiality of such trade secrets and refrain from disclosing, copying, or
using any such trade secrets without the Company's prior written consent, except
as necessary in Employee's performance of Employee's duties while employed with
the Company.
To the extent that the Confidential Information defined above does not
rise to the level of a trade secret under applicable law, Employee will, during
Employee's employment and for a period of three (3) years following the date of
any voluntary or involuntary termination of Employee's employment, protect and
maintain the confidentiality of the Confidential Information and refrain from
disclosing, copying, or using any Confidential Information without the Company's
prior written consent, except as necessary in Employee's performance of
Employee's duties while employed with the Company.
(b) Return of Company Property. Upon any voluntary or involuntary
termination of Employee's employment and at any time upon request of the
Company, Employee agrees to immediately return to the Company all property of
the Company (including but not limited to all documents, electronic files,
records, computer disks or other tangible or intangible things that may or may
not relate to or otherwise comprise Confidential Information or trade secrets
(as defined by applicable law)) that Employee created, used, possessed or
maintained while working
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for the Company from whatever source and whenever created, including all
reproductions or excerpts thereof. This provision does not apply to purely
personal documents of Employee, but it does apply to business calendars,
business Rolodexes, customer lists, contact sheets, computer programs, disks and
their contents and like information that may contain some personal matters of
Employee.
(c) Non-Diversion of Business Opportunity. Consistent with Employee's
duties and fiduciary obligations to the Company, Employee agrees to disclose to
the Company any business opportunity that comes to Employee's attention during
Employee's employment with the Company and that relates to the business of the
Company. Employee further agrees not to take advantage of or otherwise divert
any such opportunity for Employee's own benefit or that of any other person or
entity during Employee's employment with the Company without prior written
consent of the Company.
(d) Non-Solicitation of Customers. During Employee's employment and for
three (3) years following the date of any voluntary or involuntary termination
of Employee's employment, Employee agrees not to, directly or indirectly,
contact, solicit, divert, appropriate, or call upon with the intent of doing
business with the customers or clients of the Company with whom Employee has had
material contact during the last year of Employee's employment with the Company,
including prospects of the Company with whom Employee had such contact during
said period, if the purpose of such activity is either (1) to solicit these
customers or clients or prospective customers or clients for a Competitive
Business as herein defined (including but not limited to any Competitive
Business started by Employee) or (2) to otherwise encourage any such customer or
client to discontinue, reduce, or adversely alter the amount of its business
with the Company. Employee acknowledges that due to Employee's relationship with
the Company, Employee will obtain access and information relating to the
Company's clients, and that it would be unfair and harmful to the Company if
Employee took advantage of these relationships in a Competitive Business. A
"Competitive Business" is an enterprise that is in the property and casualty
insurance agency business, which services and/or products are similar or
identical to those offered by the Company during Employee's employment with the
Company.
(e) Non-Piracy of Employees. During Employee's employment and for three
(3) years following the date of any voluntary or involuntary termination of
Employee's employment, Employee covenants and agrees that Employee shall not,
directly or indirectly: (a) solicit, recruit or hire (or attempt to solicit,
recruit or hire) or otherwise assist anyone in soliciting, recruiting or hiring
any employee of the Company who performed work for the Company within the last
year of Employee's employment with the Company or who was otherwise engaged or
employed with the Company at the time of any voluntary or involuntary
termination of Employee's employment or (b) otherwise encourage, solicit, or
support any such employee(s) to leave their employment with the Company, until
such employee's employment with the Company has been voluntarily or
involuntarily terminated or separated for at least six (6) months.
(f) Acknowledgements. It is understood and agreed by Employee that the
terms and provisions of this Section (the "Restrictive Covenants") are not
intended to restrict Employee in the exercise of Employee's skills or the use of
knowledge or information that does not rise to the level of a trade secret under
applicable law or to the level of Confidential Information set forth above. It
is acknowledged and agreed that the purpose of the Restrictive Covenants is (and
that
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such Restrictive Covenants are necessary) to prevent Employee from unfairly
taking advantage of the contacts Employee has established while with the Company
and to protect the Company's investment in and good will of its business (which
the Parties acknowledge are legitimate business interests of the Company).
Employee acknowledges the reasonableness of these Restrictive Covenants and
their respective limitations, given Employee's position with the Company, the
Company's business, and the aforementioned consideration, and Employee agrees to
strictly abide by the terms hereof.
6. WORK PRODUCT; INVENTIONS.
(a) Ownership by Company. The Company shall own all right, title and
interest in and to all work product developed by Employee in Employee's
provision of services to the Company, including without limitation, all
preliminary designs and drafts, all other works of authorship, all derivative
works and patentable and unpatentable inventions and improvements, all copies of
such works in whatever medium such copies are fixed or embodied, and all
worldwide copyrights, trademarks, patents or other intellectual property rights
in and to such works (collectively the "Work Product"). All copyrightable
materials of the Work Product shall be deemed a "work made for hire" for the
purposes of U.S. Copyright Act, 17 U.S.C. Section 101 et seq., as amended (the
"Copyright Act").
(b) Assignment and Transfer. In the event any right, title or interest
in and to any of the Work Product (including without limitation all worldwide
copyrights, trademarks, patents or other intellectual property rights therein)
does and shall not vest automatically in and with the Company, Employee agrees
to and hereby does irrevocably assign, convey, and otherwise transfer to the
Company, and the Company's respective successors and assigns, all such right,
title and interest in and to the Work Product with no requirement of further
consideration from or action by Employee or the Company.
(c) Registration Rights. The Company shall have the exclusive worldwide
right to register, in all cases as "claimant" and when applicable as "author",
all copyrights in and to any copyrightable element of the Work Product, and file
any and all applicable renewals and extensions of such copyright registrations.
The Company shall also have the exclusive worldwide right to file applications
for and obtain (i) patents on and for any of the Work Product in Employee's name
and (ii) assignments for the transfer of the ownership of any such patents to
the Company.
(d) Additional Documents. Employee agrees to execute and deliver all
documents requested by the Company regarding or related to the ownership and/or
other intellectual property rights and registrations specified herein. Employee
hereby further irrevocably designates and appoints the Company Employee's agent
and attorney-in-fact to act for and in Employee's behalf and stead to execute,
register and file any such assignments, applications, registrations, renewals
and extensions and to do all other lawfully permitted acts to further the
registration, prosecution and issuance of patents, copyright or similar
protections with the same legal force and effect as if executed by Employee.
7. INJUNCTIVE RELIEF AND SPECIFIC PERFORMANCE. Employee acknowledges
that it would be difficult to calculate the Company's damages from Employee's
breach of Sections 5
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and/or 6 and that money damages would therefore be an inadequate remedy.
Accordingly, upon such breach, Employee acknowledges that the Company may seek
and shall be entitled to temporary, preliminary, and/or permanent injunctive
relief against Employee, and/or other appropriate orders to restrain such
breach. Nothing in this provision shall limit the Company from seeking any other
damages or relief provided by applicable law for breach of this Agreement or any
section or provision hereof. The Parties agree that the Company may obtain
specific performance.
8. MISCELLANEOUS.
(a) Employee Claims. Employee acknowledges and agrees that the existence
of any claim or cause of action against the Company shall not constitute a
defense to the enforcement by the Company of Employee's covenants, obligations,
or undertakings in this Agreement.
(b) Mutual Non-disparagement. The Company and the Employee agree that
neither party will undertake any disparaging or harassing conduct directed at
the other at any time during the term of the Agreement or following termination
hereof.
(c) Employee's Obligations Upon Termination/Separation. Upon the
termination of Employee's employment hereunder for whatever reason, Employee
automatically tenders his resignation from any office Employee may hold with the
Company, and Employee shall not at any time thereafter represent Employee still
to be connected or to have any connection with the Company or its related
entities.
(d) Assignment. The Company may not assign this Agreement and the
obligations of Employee hereunder without the consent of Employee. Due to the
personal service nature of Employee's obligations, Employee may not assign this
Agreement, except the assignment of any right to receive compensation or other
payment. Subject to the restrictions in this Section, this Agreement shall also
be binding upon and benefit the Parties hereto and their respective heirs,
successors, or assigns.
(e) Legality and Severability. The Parties covenant and agree that the
provisions contained herein are reasonable and are not known or believed to be
in violation of any federal, state, or local law, rule, or regulation. In the
event a court of competent jurisdiction finds any provision herein (or subpart
thereof) to be illegal or unenforceable, the Parties agree that it shall be
severed and the remaining clauses and Sections enforced in accordance with the
tenor of this Agreement. Any illegal or unenforceable provision (or subpart
thereof), or any modification by any court, shall not affect the remainder of
this Agreement, which shall continue at all times to be valid and enforceable.
(f) Entire Agreement; Modification. This Agreement constitutes the
entire understanding between the Parties regarding the subject matters addressed
herein and supersedes any prior oral or written agreements, promises,
representations, warranties, or inducements between or by the Parties. This
Agreement can only be modified by a writing signed by both Parties.
(g) Governing Law; Forum Selection. This Agreement shall be governed by
the laws of the State of Georgia without regard to the conflicts of laws
provisions of said State. In the
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event of any litigation arising out of or relating to this Agreement, the
Parties expressly agree to the exclusive jurisdiction and venue in the
appropriate state or federal court for Xxxxxx County, State of Georgia, and
waive any defenses to this forum and venue selection.
(h) Review and Voluntariness of Agreement. Employee acknowledges
Employee has had an opportunity to read, review, and consider the provisions of
this Agreement, that Employee has had an opportunity to consult with legal
counsel and has read and does understand such provisions, and that Employee has
voluntarily entered into this Agreement.
(i) Non-Waiver. The failure of the Company to insist upon or enforce
strict performance of any provision of this Agreement or to exercise any rights
or remedies thereunder will not be construed as a waiver by the Company to
assert or rely upon any such provision, right, or remedy in that or any other
instance.
(j) No Conflicting Obligations. Employee hereby acknowledges and
represents that Employee's execution of this Agreement and performance of
employment-related obligations and duties for the Company as set forth hereunder
will not cause any breach, default, or violation of any other employment,
non-disclosure, confidentiality, non-competition, or other agreement to which
Employee may be a party or otherwise bound. Moreover, Employee hereby agrees
that Employee will not use in the performance of such employment-related
obligations and duties for the Company or otherwise disclose to the Company any
trade secrets or confidential information of any person or entity (including any
former employer) if and to the extent that such use or disclosure may cause a
breach or violation of any obligation or duty owed to such employer, person, or
entity under any agreement or applicable law.
(k) Adequate Consideration. Employee acknowledges that the consideration
furnished by the Company in this Agreement, the sufficiency and adequacy of
which is hereby acknowledged, is in addition to anything of value to which
Employee is already entitled.
(l) Notices. All notices and other communications to any Party under
this Agreement shall be in writing (including facsimile transmissions or similar
writing) and shall be given to such Party at its address or facsimile number set
forth below or such other address or facsimile number as such Party may
hereafter specify for the purpose of notice to the other Party:
(i) If to Company (including the Compensation Committee of the
Board of Directors):
Trustway Insurance Agencies, LLC
_____________________
_____________________
_____________________
Attn:_____________________
(ii) If to Employee:
Xxxxx X. Xxxx
_____________________
_____________________
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Each such notice or other communication shall be effective (i) if given by
mail, 72 hours after such notice or communication is deposited in the mail with
first class postage prepaid and addressed as set forth above or (ii) if given by
other means, when delivered at the address specified above.
(m) Recitals. All of the recitals and representations in the preamble of
this Agreement are hereby incorporated into and made a material part of this
Agreement.
(n) Limitation on Transfer of Stock. In addition to any restrictions
under Rule 144 under the Securities Act of 1933 on the transfer of the
Employee's common stock of AssuranceAmerica (the "Stock") acquired pursuant to
that certain Asset Purchase Agreement by and among the Company, Xxxxxx-Xxxx
Holding Company, a Georgia corporation, the Employee, and AssuranceAmerica (the
"Purchase Agreement"), Employee agrees that he shall not transfer any Stock
during the first year after the date of this Agreement, and thereafter, Employee
shall not transfer more that twenty-five percent (25%) of his Stock during any
twelve (12) month period. This subsection shall survive the termination of this
Agreement.
(o) Guarantee by Purchaser's Parent. In order to induce Employee to
enter into this Agreement and in recognition of the benefits flowing to
AssuranceAmerica from the consummation of the transactions contemplated hereby,
AssuranceAmerica hereby agrees to guarantee, assume and discharge any and all
liabilities, obligations, duties and covenants of the Company hereunder, as if
such liabilities, obligations, duties and covenants were expressly required to
be performed or discharged by AssuranceAmerica hereunder.
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IN WITNESS WHEREOF, the Parties hereto have hereunto affixed their hands and
seals effective as of the date first above written.
COMPANY:
TRUSTWAY INSURANCE AGENCIES, LLC
/S/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Chairman
EMPLOYEE:
/S/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
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