Exhibit 10.1
This
CONSULTING AGREEMENT (“Agreement”) dated as of October 27, 2005 is entered into by and
between AMERISAFE, INC., a Texas corporation (the “Company”), and Xxxx X. Xxxxxxxx (“Consultant”).
WITNESSETH:
WHEREAS, Consultant is currently an executive officer and director of the Company, and has
been an employee of the Company since 1986; and
WHEREAS, Consultant will resign as a member of the Board of Directors of the Company effective
as of the date hereof and retire from the Company effective as of December 31, 2005; and
WHEREAS the Company desires to retain Consultant to provide services to the Company for the
period provided in this Agreement, and Consultant desires to provide such services to the Company,
all in accordance with the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises hereof and the mutual covenants
contained herein, the parties hereto hereby covenant and agree as follows:
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(a) |
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Consultant hereby resigns as a member of the Board of Directors of the Company
effective as of the date hereof. |
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(b) |
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Consultant hereby agrees to continue as an employee of the Company, in the
position as an Executive Vice President, through December 31, 2005. Effective as of
the close of business on December 31, 2005, Consultant hereby agrees to resign from his
employment, and all officer and director positions, with the Company and each of its
subsidiaries. |
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(a) |
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Effective as of January 1, 2006, the Company hereby agrees to retain Consultant
as an independent consultant to provide the services described in Section 4 of this
Agreement, and Consultant hereby agrees to provide such services, for the period set
forth in Section 3 hereof, subject to the terms and conditions hereinafter set forth. |
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(b) |
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Consultant affirms and represents that he is under no obligation to any former
employer or other party which is in any way inconsistent with, or which imposes any
restriction upon, Consultant’s engagement hereunder as a consultant with the Company,
or Consultant’s undertakings under this Agreement. |
| 3. |
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Term of Engagement. Unless earlier terminated by Consultant or the Company as
provided in this Agreement, the term of Consultant’s engagement under this Agreement |
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shall be
for a period beginning on January 1, 2006 (the “Effective Date”) and ending on January 1,
2011. Such period or, if Consultant’s engagement hereunder is earlier terminated as provided
herein such shorter period, is sometimes referred to herein as the “Consulting Term”. |
| 4. |
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Duties. Consultant shall serve as an independent contractor consultant to the
Company and, as such, will perform such general consulting and advisory services in relation
to the Company’s general business matters as may be requested from time to time by the Chief
Executive Officer of the Company. The Company and Consultant mutually agree that the scope of
Consultant’s duties may require frequent travel and the Company specifically authorizes
Consultant, for the benefit of the Company and Consultant, to perform his duties principally
from his personal residence in Florida, with such travel to other locations from time to time
as the Chief Executive Officer of the Company may reasonably prescribe. Consultant shall
render such services diligently, in a reasonable manner and in the best interests of the
Company. Consultant shall use his good faith efforts, judgment and energy to improve and
advance the business and interests of the Company and its subsidiaries. Consultant shall
reasonably and in good faith cooperate with the Company and shall attend and participate in
meetings, conferences and/or other business events as requested by the Chief Executive
Officer. Consultant shall also assist the Company to perform such other acts and to perform
such other duties, as may be requested by the Chief Executive Officer or as may be required
and/or necessary for the Company to fulfill legal, regulatory and/or compliance obligations,
fiduciary responsibilities and/or corporate reporting and/or governance requirements. |
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Conflicts of Interest and Compliance. Consultant shall not engage in any conflict of
interest and/or take any actions or engage in any conduct which is contrary to the exclusive
interests of the Company. Consultant shall comply with all applicable laws and regulations
(federal, state and/or local) and shall comply with all applicable directives, orders and
regulations of any governmental agency or regulatory body including federal, state and local
agencies and bodies. Consultant shall also comply with all policies and procedures of the
Company and directives of the Board of Directors. |
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EEO Compliance. Consultant shall not engage in any conduct which constitutes an
unlawful employment practice or which violates any laws or regulations (federal, state and/or
local) prohibiting discrimination, harassment and/or retaliation. Consultant acknowledges
that the Company is an Equal Opportunity Employer and prohibits all forms of unlawful
discrimination in the terms and conditions of employment and prohibits all forms of
harassment, including sexual harassment. |
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Compensation. As compensation for the services to be performed by Consultant
hereunder during the Consulting Term, the Company shall pay Consultant a fee in an amount
equal to $125,000 per calendar year (the “Consulting Fee”). The Consulting Fee will be earned
ratably over the applicable calendar year and one-fourth of such amount will be payable on the
first business day of each calendar quarter. Subject to the completion of the proposed
initial public offering of the Company’s Common Stock prior
to January 31, 2006, Consultant will be awarded options to purchase 95,000 shares of the
Common Stock, par value $.01 per share, of the Company pursuant to the Company’s |
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2005 Equity
Incentive Plan. Such options shall vest ratably over a five-year period and shall be
subject to the other terms set forth in the form of Option Agreement provided to Consultant. |
| 8. |
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Expenses. Consultant will be entitled to reimbursement for all reasonable
out-of-pocket business expenses incurred by Consultant in the performance of his duties
hereunder incurred with the prior consent of an officer of the Company. |
| 9. |
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Confidential Information. Consultant hereby covenants, agrees and acknowledges as
follows: |
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(a) |
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Consultant has had and will have access to and will participate in the
development of or be acquainted with confidential or proprietary information and trade
secrets that directly or indirectly relate to the business, prospects, operations and
other aspects of the Company and any other present or future affiliates, subsidiaries
and/or related entities of the Company (collectively with the Company, the
“Companies”), including but not limited to (1) customer, insurance agent and reinsurer
lists; the identity, lists or descriptions of new or prospective customers, insurance
agents and reinsurers; financial statements; cost reports or other financial
information; contract proposals or bidding information, business plans; training and
operations methods and manuals; personnel records; software programs; reports and
correspondence; and management systems, policies or procedures, including related forms
and manuals; (ii) information pertaining to future developments such as future
marketing or acquisition plans or ideas; and (iii) all other tangible and intangible
property, which are used in the business and operations of the Companies but not made
public. The information and trade secrets relating to the business of the Companies
described hereinabove in this paragraph 9(a) are hereinafter referred to collectively
as the “Confidential Information”, provided that the term “Confidential Information”
shall not include any information (x) that is or becomes publicly available (other than
as a result of violation of this Agreement by Consultant), or (y) that Consultant
receives or received on a non-confidential basis from a source (other than the
Companies or any of their representatives) that is not prohibited from disclosing such
information by a legal, contractual or fiduciary obligation (provided, however that
Consultant shall not be deemed to be in violation of this clause (y) unless he has
actual knowledge of any such obligation on the party of any such source). |
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(b) |
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Consultant shall not disclose, use or make known for his or another’s benefit
any Confidential Information or use such Confidential Information in any way except in
connection with the performance of Consultant’s duties under this Agreement.
Consultant may disclose Confidential Information in response to an order or subpoena of
a court or governmental agency of competent jurisdiction and authority provided,
however, notice of such order or subpoena shall be immediately communicated to the
Company telephonically and in writing so that the Company shall have an opportunity to
intervene and assert its rights to nondisclosure prior to any response by Consultant to such an order or subpoena |
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and
in such notice, Consultant shall advise as to whether or not he intends to comply
with and/or respond to the order and/or subpoena. |
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(c) |
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Consultant acknowledges and agrees that a remedy at law for any breach or
threatened breach of the provisions of this Section 9 would be inadequate and,
therefore, agrees that the Company shall be entitled to injunctive relief in addition
to any other available rights and remedies in case of any such breach or threatened
breach; provided, however, that nothing contained herein shall be construed as
prohibiting the Company from pursuing any other rights and remedies available for any
such breach or threatened breach. |
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(d) |
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Consultant agrees that upon termination of this Agreement for any reason,
Consultant shall promptly return to the Company all Confidential Information in his
possession in whatever form maintained (including, without limitation, documentation in
any format or medium, computer disks and other electronic media). |
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(e) |
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The obligations of Consultant under this Section 9 shall, except as otherwise
provided herein, survive the termination of the Consulting Term and/or the expiration
or termination of this Agreement for a period of two years. |
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(a) |
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This Agreement shall be terminated as follows: |
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(i) |
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upon the death of Consultant; |
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(ii) |
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upon the Disability of Consultant; |
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(iii) |
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by Consultant upon 90 days’ written notice to the Company; |
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(iv) |
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by the Company upon notice to Consultant for “Cause”. |
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For the purposes of this Agreement “Disability” means Consultant’s inability to
substantially perform his duties under this Agreement for 60 consecutive days or for
120 or more days in any 12-month period, and “Cause” means that any of the following
has occurred with respect to Consultant: (1) conviction of the commission of a
felony, (2) acts of dishonesty or moral turpitude which are materially detrimental
to the Companies, (3) acts or omissions which Consultant reasonably knew were likely
to materially damage the business of the Company (it being mutually agreed that any
breach of Section 9 (confidentiality) would result in material damage to the
Company), (4) the willful disparagement by Consultant of the Companies or their
executives or employees, or Consultant willfully engaging in any conduct detrimental
to their reputation, (5) failure by Consultant to comply with the reasonable and
lawful orders of the Chief Executive Officer of the Company, (6) gross negligence by
Consultant in the performance of, or failure to perform, his obligations hereunder,
or (7) Consultant’s breach of this Agreement; provided, however, that prior to
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termination pursuant to clauses (5), (6) or (7) above, the Company shall have
provided Consultant with written notice of such action, failure or event and a
reasonable period in which to cure the same. This advance notice and cure provision
for termination pursuant to clauses (5), (6) or (7) above shall not apply and is not
required if giving notice and/or a cure period would be contrary to the best
interests of the Company. |
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(b) |
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Notwithstanding anything to the contrary expressed herein, the Company shall
not be obligated to make any payments to Consultant or on his behalf of whatever kind
or nature by reason of the termination of this Agreement pursuant to Section 8(a),
other than (i) such portion, if any, of the Consulting Fee as shall be accrued and
remained unpaid as of the date of said cessation and (ii) such other amounts, if any,
which may be then otherwise payable to Consultant pursuant to the terms of Section 6
above. |
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Restrictive Covenants. |
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11.01 |
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Non-Competition and Non-Solicitation of Customers and Agents |
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(a) |
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Consultant agrees that during the Noncompete Period (as defined
in Section 11.01(b) of this Agreement), without the prior written consent of
the Company, Consultant shall refrain, directly or indirectly, and whether as a
principal, agent, employee, owner, partner, officer, director, shareholder,
member or otherwise, alone or in association with any other person or entity,
from carrying on or engaging in a business similar to that of the Company and
from soliciting customers, clients and insureds of the Company within the
Designated Area, so long as the Company carries on a like business therein; |
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(b) |
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For purposes of this Agreement, “Noncompete Period” shall mean
the Consulting Term; provided, however, the Company shall have the
exclusive option and absolute right to extend the Noncompete Period for a
period of up to 24 months following the termination of this Agreement (but in
no event beyond January 1, 2011) if the Company (A) delivers written notice to
Consultant exercising such option (1) on the date this Agreement is terminated
pursuant to Section 10(a)(ii) or, (2) if this Agreement is terminated pursuant
to Section 10(a)(iii) or 10 (a)(iv), within 30 days following the date on which
the notice referred to in Section 10(a)(iii) or 10(a)(iv), as applicable, is
delivered and (B) agrees to pay and does pay Consultant the portion of the
Consulting Fee that would have been payable to Consultant during such period
had this Agreement not been terminated. If the Company exercises this option
and right and complies with the requirements for same, the Noncompete Period
shall be extended for the period designated and Consultant agrees and
acknowledges that he is bound by such period. |
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(c) |
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Definition of Designated Area. The term “Designated
Area” shall mean the states, parishes, counties and/or municipalities
designated in Attachment “A”. |
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(d) |
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Business of the Company. Consultant acknowledges and
understands that the “business” of the Company involves and relates to the
underwriting of risks for worker’s compensation insurance and related services.
Consultant further acknowledges, agrees and represents that he understands and
knows the business in which the Company is engaged and the scope, activities
and/or business pursuits involved in the business of the Company and in the
underwriting of risks for worker’s compensation insurance and related services.
Consultant further acknowledges and understands that the non-competition and
non-solicitation of customer restrictions in this Agreement prohibit Consultant
from engaging, in any capacity and/or any position, and/or from conducting any
activities and/or business similar to that of the Company and under the
specific terms and conditions of this Agreement. |
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(e) |
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Customers of the Company. For purposes of this
Agreement, “customers” shall include, but are not limited to, insured
businesses and/or entities who have and/or have had insurance coverage with the
Company and insurance agents with whom the Company has contracts, agreements,
arrangements and/or any type of business, insurance placement and/or working
relationship. Consultant acknowledges and represents that he understands the
nature of the Company’s customer relationships and who and/or what comprises
its customers. |
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11.02 |
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Non-Solicitation of Employees. Consultant shall not, during the
Consulting Term and for a period of two years following the termination or expiration
of this Agreement, directly or indirectly solicit or induce, or attempt to solicit or
induce, any employee, agent (including insurance agents), of or consultant to the
Company to leave his or her employment or terminate his or her consultation agreement
or similar relationship with the Company. |
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11.03 |
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Amerisafe Designation. As used in this Section 11, Amerisafe, Inc.
and/or the “Company” includes Amerisafe, Inc., American Interstate Insurance Company,
Silver Oak Casualty, Inc., American Interstate Insurance Company of Texas, Amerisafe
Risk Services, Inc., Amerisafe General Agency, Inc. and any and all predecessor
entities, successor entities, affiliate entities, parent companies and subsidiaries.
The parties acknowledge and agree that the restrictive covenants in this Section 11
inure to the benefit of and operate for the interest of all of the above-mentioned
companies and affiliates. |
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11.04 |
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Remedies. In the event of a breach, or a threatened or attempted
breach, of any provision of this Section 11 by Consultant, the parties recognize that
such a breach would cause irreparable harm to the Company, thus the Company shall, in
addition to all other remedies, be entitled to: (a) a temporary, preliminary and/or |
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permanent injunction against such breach without the necessity of showing any
actual damages or any irreparable injury; (b) a decree for the specific performance
of this Agreement; and/or (c) damages, attorney’s fees and costs. All remedies in
favor of Company shall not be exclusive, but shall be cumulative. |
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11.05 |
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Construction, Reformation and Severability. It is understood and
agreed that, should any portion of any clause or paragraph of this Section 11 be deemed
too broad to permit enforcement to its full extent, or should any portion of any clause
or paragraph of this Section 11 be deemed unreasonable, then said clause or paragraph
shall be reformed and enforced to the maximum extent permitted by law. Additionally,
if any of the provisions of this Section 11 are ever found by a court of competent
jurisdiction to exceed the maximum enforceable (i) periods of time, (ii) geographic
areas of restriction, (iii) scope of non-competition or non-solicitation and/or (iv)
description of the Company’s business or customers, or for any other reason, then such
unenforceable element(s) of this Section 11 shall be reformed and reduced to the
maximum periods of time, geographic areas of restriction, scope of non-competition or
non-solicitation and/or description of the Company’s business that is permitted by law.
In this regard, any unenforceable, unreasonable and/or overly broad provision shall be
reformed and/or severed so as to permit enforcement to the fullest extent permitted by
law. Reformation and severability shall apply. Moreover, the restrictive covenants
contained herein shall be interpreted and applied to the broadest extent possible under
La.R.S. 23:921, and any future amendments to said statute which broaden or expand the
Company’s rights shall apply. |
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11.06 |
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Reasonableness. Consultant acknowledges, represents and agrees that
the restrictive covenants in this Section 11 are reasonable in nature, scope, time and
territory and in the terms and conditions set forth herein. Consultant acknowledges,
represents and agrees that the Company has expended substantial cost in training
Consultant and that the Company has provided him with access to valuable information
and has provided him with valuable experience. In addition, Consultant acknowledges,
represents and agrees that the Company has placed Consultant in contact with its
customers and has made Consultant part of its business plans. Consultant further
acknowledges, represents and agrees that Consultant would not have obtained such
training, experience, contacts and information from other sources without his
relationship with the Company. Consultant further acknowledges, represents and agrees
that the foregoing have occurred and/or resulted based on the Company’s reliance on
these restrictive covenants and Consultant’s representations and obligations made
herein. Consultant further acknowledges, represents and agrees that this Section 11
and the obligations of Consultant under these restrictive covenants are reasonable in
order to protect the legitimate interests of the Company. Consultant further
acknowledges, represents and agrees that by virtue of his prior employment with the
Company, and his knowledge of the Company and the workers’ compensation industry, he is
an integral and influential component of the |
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Company’s current and future business plans. It is Consultant’s desire and intent
that this Agreement be given full force and effect. |
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Independent Contractor. Nothing herein shall be construed to create any relationship
of agent and principal, partnership, or joint venture between or among the parties. No party
shall assume, either directly or indirectly, any liability for the other party. Consultant’s
relationship to the Company during the Consulting Term shall be that of an independent
contractor, and Consultant acknowledges and agrees that he is not an employee and he is not
entitled to any employment benefits. Consultant expressly waives any right or claim to
participation or eligibility in any employee benefit plan. Neither party shall have the
authority to bind or obligate the other in any way and shall not represent that it has such
authority. |
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Provision of Equipment. Consultant shall be permitted to retain all computers and
related equipment in his possession on the date hereof. Consultant acknowledges that he has
possession of all computer and other equipment he requires to perform his obligations under
this Agreement and that the Company has no obligation to provide any computer or other
equipment, software or other supplies. |
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Non-Assignability. |
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(a) |
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Neither this Agreement nor any right or interest hereunder shall be assignable
by Consultant or his beneficiaries or legal representatives without the Company’s prior
written consent; provided, however, that nothing in this Section 14(a) shall
preclude Consultant from designating a beneficiary to receive any benefit payable
hereunder upon his death or incapacity. |
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(b) |
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Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation or to exclusion, attachment, levy or
similar process or to assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no effect. |
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(c) |
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Company shall have the right to assign this agreement to any affiliate entity
or acquiring entity. |
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Binding Effect. Without limiting or diminishing the effect of Section 14 hereof,
this Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, successors, legal representatives and assigns. |
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Notices. All notices which are required or may be given pursuant to the terms of
this Agreement shall be in writing and shall be sufficient in all respects if given in writing
(i) when received if delivered personally, (ii) five business days after being mailed by
certified or registered mail, return receipt requested and postage prepaid, (iii) one business
day after being sent via a nationally recognized overnight courier, or (iv) when dispatched
via facsimile confirmed by certified or registered mail, return receipt requested and postage
prepaid, if to the Company at the Company’s principal place of |
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business, and if to Consultant, at his home address most recently filed with the Company, or
to such other address or addresses as either party shall have designated in writing to the
other party hereto. |
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Law Governing. This Agreement shall be governed by and construed in accordance with
the laws of the State of Louisiana and without regard to the application of conflict of laws
principles in general and statutory provisions addressing conflicts of laws under the
Louisiana Civil Code or any other Louisiana law. |
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Severability. Consultant agrees that in the event that any court of competent
jurisdiction shall finally hold that any provision of this Agreement is void or constitutes an
unreasonable restriction against Consultant, this agreement shall not be rendered void but
shall apply with respect to such extent as such court may judicially determine constitutes a
reasonable restriction under the circumstances. If any part of this Agreement is held by a
court of competent jurisdiction to be invalid, illegible or incapable of being enforced in
whole or in part by reason of any rule of law or public policy, such part shall be deemed to
be severed from the remainder of this Agreement for the purpose only of the particular legal
proceedings in question and all other covenants and provisions of this Agreement shall in
every other respect continue in full force and effect and no covenant or provision shall be
deemed dependent upon any other covenant or provision. Severability and reformation shall
apply. |
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It is understood and agreed that, should any portion of any clause or paragraph of this
Agreement be deemed too broad to permit enforcement to its full extent, or should any
portion of any clause or paragraph of this Agreement be deemed unreasonable, then said
clause or paragraph shall be reformed and enforced to the maximum extent permitted by law. |
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| 19. |
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Waiver. Failure to insist upon strict compliance with any of the terms, covenants
or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor
shall any waiver or relinquishment of any right or power hereunder at any one or more times
be deemed a waiver or relinquishment of such right or power at any other time or times. |
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Entire Agreement; Modifications. This Agreement, with referenced Attachment “A,”
constitutes the entire and final expression of the agreement of the parties with respect to
the subject matter hereof and supersedes all prior and/or contemporaneous agreements, oral and
written, between the parties hereto with respect to the subject matter hereof, including
without limitation the Executive Agreement, dated January 1, 2004, between Consultant and the
Company. This Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto. |
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Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. |
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AMERISAFE, INC.
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BY: |
/s/ C. Xxxxx Xxxxxxx, Xx.
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C. Xxxxx Xxxxxxx, Xx., President and Chief |
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Executive Officer |
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CONSULTANT:
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BY: |
/s/ Xxxx X. Xxxxxxxx. |
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Xxxx X. Xxxxxxxx |
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