EMPLOYMENT CONTRACT
THIS CONTRACT OF EMPLOYMENT (hereinafter "Contract") is made in
Indianapolis, Indiana, to be dated October 2, 1998, by and between STANDARD
MANAGEMENT CORPORATION ( hereinafter "Company"), an Indiana corporation and
XXXXXX X. XXXX (hereinafter "Executive") and terminates and releases the
Company and Executive from the prior Employment Contract dated and
effective October 2, 1995.
RECITALS
A. Executive is expected to continue pursuing new acquisition
targets to add to the profitability, growth and financial
strength of the Company.
B. The Company considers the continued services of the Executive to
be in the best interest of the Company and its shareholders and
desires to assure the continued services of the Executive on
behalf of the Company.
C. Executive is willing to remain in the employ of the Company under
the terms and conditions hereof.
NOW THEREFORE, in consideration of the mutual agreements contained
herein, the parties to this Contract hereby agree as follows:
AGREEMENT
1. EMPLOYMENT. The Employment Contract dated and effective
October 2, 1995 is terminated effective October 2, 1998. The
Company hereby agrees to employ Executive as Vice Chairman of
Xxxxx National Life Insurance Company, a controlled subsidiary of
Company. Executive accepts such employment and agrees to be
subject to the general supervision, orders, advice and direction
of the Chairman of the Board of the Company in a manner
consistent with the Articles of Incorporation and By-Laws of
Company.
2. TERMS OF EMPLOYMENT AND COMPENSATION. Executive's term of
employment (the "Employment Term") hereunder shall start on the
date first written above and continue until such employment
terminates pursuant to Section 8 hereof. In consideration for
providing services hereunder Executive shall be compensated
through the salary and bonus provisions of Section 3.
3. SALARY AND BONUS. Executive's salary shall be $100,000 per
year. In addition to salary, the Executive will be paid a 1%
annual bonus based on the gross purchase price of an acquisition
target (the "Acquisition Target"). The gross purchase price is
defined as the total consideration paid in any combination of
cash, notes, stock or other property for an Acquisition Target.
The bonus will be adjusted by deducting the salary and expenses
paid during the contract year to the Executive. The bonus will
be paid only on completed transactions introduced by the
Executive to the Company. Each new Acquisition Target must be
acknowledged in writing by the Company as qualifying for a bonus
and will qualify for a bonus if the transaction is completed
within two (2) years from the date of acknowledgment of the
Acquisition Target.
4. SALARY GUARANTEE. All salaries payable to the Executive under
the Agreement will be guaranteed (the "Guaranteed Payments") as
of the effective date of the Agreement for the full Employment
Term of the Agreement except for terminations for violations
found in Section 8 (b)(c) or (d) hereof.
(a) All Guaranteed Payments described in this Section and
payable to the Executive shall be payable to the Estate of
Xxxxxx X. Xxxx in the event of death of the Executive.
After the initial Employment Term of Guaranteed Payments,
any additional one year extensions made pursuant to the
terms of Section 8(a) will be guaranteed once the notice
period for the extension of termination period found in
Section 8(a) has passed.
(b) In the event of any mental disability which renders the
Executive unable to fulfill his duties pursuant to Section 1
of this Agreement, all Guaranteed Payments shall be made to
Xxxxxx X. Xxxx'x spouse, his attorney in fact, his personal
representative, his guardian, or any other such person
legally specifically listed, to whomever is legally
authorized to receive monetary payments due and owing to
Xxxxxx X. Xxxx.
5. FRINGE BENEFITS. Continuing immediately and throughout the
Employment Term, Executive shall be entitled to participate in
the Company's corporate, medical and disability insurance plans.
Executive shall be entitled to all other fringe benefits
generally provided for salaried employees of the Company as
provided under such fringe benefit programs, including, without
limitation, four weeks vacation per year.
1. AUTOMOBILE ALLOWANCE. During the Employment Term, Executive
shall be entitled to an automobile allowance of $500.00 per
month.
2. REIMBURSEMENT FOR EXPENSES. The Company shall, during the
Employment Term, reimburse Executive for all reasonable travel,
business entertainment and other business expenses incurred by
Executive in rendering services under this Contract. Such
reimbursement shall be subject to compliance with the applicable
policies and procedures established by the Company.
3. TERMINATION. The Employment Term shall terminate on the first
to occur of the following events:
(a) the first anniversary of the date on which the Employment
Term commenced; provided, however, that after such first
anniversary, the Employment Term shall be extended each year
thereafter for an additional one year period unless either
party gives the other written notice at least ninety (90)
days before such anniversary date of its intention not to
renew the Contract.
(b) termination by the Company for cause, upon written notice
(specifying the particulars) to Executive from the Company's
Board of Directors which cause shall be limited to:
(i) an act or acts which in the judgment of the Board of
Directors, constitute the failure or refusal by
Executive to comply with the material orders, advice,
directions, policies, standards and regulations of the
Company and its Board of Directors, as promulgated from
time to time, or with the provisions of this Contract;
(ii) an act or acts which, in the judgment of the Board of
Directors, constitute fraud or dishonesty by Executive
or which, in the judgment of the Board of Directors,
result in or tend to result in gain to or personal
enrichment of Executive at the Company's expense;
(iii)any felony conviction of Executive or material tort
which is detrimental to the Company; or
(iv) the continuous absence of Executive from his employment
without reasonable cause or explanation for a period of
30 days or more;
(c) the death of Executive;
(d) the 90{th} day after notice from the Company to Executive
that Executive is considered to be permanently disabled due
to his inability to perform his duties or fulfill his
responsibilities hereunder, which inability existed for a
period of 90 days or more before such notice; or
(e) the 10{th} day after Executive gives written notice to the
Company terminating his employment by the Company.
Upon termination of Executive's employment pursuant to Section 8(b) or
Section 8(e) hereof, Executive (or his estate) shall receive (i) any unpaid
salary payments with respect to periods prior to the date of termination,
and (ii) any termination, disability or death benefits to which he is
entitled up until such termination under any employee benefit plan of the
Company which is in effect at the time of the termination of his
employment.
4. TRAVEL. Executive shall not be required to move from Jackson,
Mississippi, as a condition of his continued employment of the
Company.
5. TECHNICAL INFORMATION. Executive agrees that during the
Employment Term and for a period of one year thereafter, he will
assign to the Company or its nominees all of his right, title and
interest in and to all "Technical Information" (as hereinafter
defined) which he makes, develops or conceives, either alone or
in conjunction with others; he will disclose promptly to the
Company all such Technical Information; and he will cooperate
with the Company in its efforts to protect its or any of its
affiliates' or subsidiaries' rights of ownership in such
Technical Information. For purposes of this Contract, "Technical
Information" shall mean and include, but not be limited to, all
software, processes, devices, trademarks, trade names,
copyrights, marketing plans, improvements, and ideas relating to
the business of the Company, or any of its affiliates or
subsidiaries, and all goodwill associated with any such item.
6. COVENANT AGAINST DISCLOSURE OF TECHNICAL AND CONFIDENTIAL
INFORMATION. Executive agrees that while he is employed by the
Company and thereafter he shall not, directly or indirectly,
disclose or use to the detriment of the Company, of any of its
affiliates or subsidiaries, or for the benefit of any other
person, corporation or other entity, any confidential information
or trade secret (including, but not limited to, the identity and
needs of any customer of the Company, or any of its affiliates or
subsidiaries, the method and techniques of any of the business of
the Company, or any of its affiliates or subsidiaries, the
marketing, sales, costs and pricing plans and objectives of the
Company, or any of its affiliates or subsidiaries, the problems,
developments, research records, and Technical Information) of the
Company, or any of its affiliates or subsidiaries. Furthermore,
Executive shall deliver promptly to the Company upon termination
of his employment, or at any time the Company may so request, all
memoranda, notes, records, reports, manuals, software, models,
designs, and other documents and computer records (and all copies
thereof) relating to the business of the Company, and all of its
affiliates and subsidiaries, and all property associated
therewith, which he may then possess or have under his control.
This Contract supplements and does not supersede Executive's
obligations under statute or the common law to protect the
Company's trade secrets and confidential information.
7. REMEDY. Executive acknowledges that the restrictions
contained in Sections 10 and 11 of this Contract are reasonable
and that the legal remedies for breach of the covenants which are
contained Sections 10 and 11 of this Contract may be inadequate
and, therefore, agrees that, in the event of any actual or
threatened breach of any such covenant, in addition to any other
right or remedy which the Company may have, the Company may: (a)
seek specific enforcement of any such covenant through injunction
or other equitable relief, and (b) recover from Executive an
amount equal to (i) all sums paid by the Company to him after
commencement of the breach, plus (ii) all costs and expenses
(including attorneys' fees) incurred by the Company in
enforcement of the covenant, plus (iii) all other damages to
which the Company may be legally entitled.
8. ENTIRE AGREEMENT. This Contract contains the entire agreement
of the parties relating to the employment of Executive by the
Company, superseding any and all prior such agreements, and
cannot be amended, modified, or supplemented in any respect
except by subsequent written agreement entered into by the
parties.
9. BENEFIT. Executive acknowledges that the services to be
rendered to him are unique and personal; accordingly, Executive
may not assign any of his rights or delegate any of his duties or
obligations under this Contract. The rights and obligations of
the Company under this Contract shall inure to the benefit of,
and be binding upon, the legal representatives, successors and
assigns of the Company.
10. NO WAIVER. No failure on the part of either party at any time
to require the performance by the other party of any term of this
Contract shall be taken or held to be a waiver of such term or in
any way affect such party's right to enforce such term, and no
waiver on the part of either party of any term of this Contract
shall be taken or held to be a waiver of any other term hereof or
the breach thereof.
11. SEVERABILITY. The provisions of Section 10 through 12 hereof
are severable, and the invalidity or unenforceability of any
particular provision of Sections 10 through 12 shall not affect
or limit the enforceability of the other provisions. If any
provision in Sections 10 through 12 hereof is held unenforceable
for any reason, including the time period, geographic area, or
scope of activity covered, then such provision shall be enforced
to whatever extent is reasonable and enforceable.
12. GOVERNING LAW. This Contract shall be governed and construed
in accordance with the law of the State of Indiana (other than
the provision relating to choice of law). The Contract may be
brought in any state or federal court of record in Indianapolis,
Indiana and the parties hereto waive any right to question the
jurisdiction of such court over their person or the property of
such venue.
13. CAPTIONS. The captions in this Contract are for convenience
and identification purposes only, and not an integral part of
this Contract, and are not to be considered in the interpretation
of any part hereof.
14. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if in
writing and personally delivered to the party to whom notice
should be given or if sent by registered or certified mail,
postage prepaid, addressed to the addresses set forth below, or
to such other addresses as shall be furnished in writing by
either party to the other:
To Executive:
Xxxxxx X. Xxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
To the Company:
Xxxxx National Life Insurance Company
0000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
0000 Xxxxxxxx Xxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
IN WITNESS WHEREOF, the Company has caused this Contract to be
executed on its behalf by its duly authorized officer and Executive has
hereunto set his hand as of the date and year first above written.
STANDARD MANAGEMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Chairman, President & CEO
Attest:
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Esq.
Secretary
EXECUTIVE:
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
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