EXHIBIT 10.7
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AGREEMENT
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This Agreement is entered into between PennCorp Financial Group, Inc.,
a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxxx (the
"Executive"), effective as of January 28, 2000 (the "Effective Date").
W I T N E S S E T H
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WHEREAS, the Company is a publicly held holding company with its
principal place of business in Dallas, Texas;
WHEREAS, the Executive is the senior counsel of the Company and is
employed pursuant to (i) an Executive Employment Agreement dated May 22, 1998
(the "Employment Agreement"), and (ii) an Executive Retention Agreement dated
May 22, 1998 (the "Retention Agreement") (collectively, the "Employment
Contracts").
WHEREAS, Section 8(b) of the Employment Agreement provides, in
relevant part, as follows:
(b) If Executive terminates his employment with Company for
Good Reason, or if Company terminates Executive's employment with
Company without Cause, Executive shall be entitled to any payments and
benefits provided pursuant to the terms of the Retention Agreement in
addition to (but without duplication) any amount to be paid or provided
to Executive under the terms of this Agreement.
WHEREAS, the Company has entered into (i) a Stock Purchase Agreement
dated January 7, 2000, in which the Company has agreed to sell Southwestern Life
Insurance Company and Security Life and Trust Insurance Company to Reassure
America Life Insurance Company and (ii) a Stock Purchase Agreement dated January
8, 2000, with Pioneer-Occidental Holding Company, in which the Company has
agreed to sell American-Amicable Life Insurance Company of Texas, Pioneer
Security Life Insurance Company, Occidental Life Insurance Company of North
Carolina, and Pioneer American Insurance Company (collectively, the "Sales
Agreements");
WHEREAS, the Executive is entitled to submit his resignation upon the
occurrence of a "Change of Control" which results in "Good Reason," both as
defined in the Employment Contracts, thereby entitling the Executive to certain
payments and benefits provided under the terms and provisions of the Employment
Contracts;
WHEREAS, the Company and the existing Board of Directors believe the
continued employment and services of the Executive is crucial to the
implementation and consummation of the Sales Agreements, the Chapter 11
bankruptcy filing and proceeding of the Company, the contemplated liquidation of
the Company and related events;
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WHEREAS, the Company and the Executive desire to enter into this
Agreement to clarify their respective rights and obligations and to ensure the
availability of the Executive's services to the Company for a limited, but
critical, period of time;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, including (without limitation) the recitals set
forth above (which are an integral part of this Agreement), the parties agree as
of the Effective Date as follows:
(1) WAIVER OF NOTICE AND OPPORTUNITY TO CURE
The Company hereby waives its right to written notice by the Executive
of an event or events constituting "Good Reason," as well as the Company's right
or opportunity to cure the event or events constituting "Good Reason," under the
terms and provisions of the Employment Contracts.
(2) EXECUTIVE TERMINATES EMPLOYMENT FOR GOOD REASON
The Company and the Executive hereby agree that (i) the Executive's
employment with the Company is terminated as of the Effective Date by the
Executive for "Good Reason" under the Employment Contracts and (ii) the amounts
outlined on Exhibit "A" are the true and correct payments and benefits due to
the Executive under the Employment Contracts by reason of such termination. The
Company agrees to pay the amounts reflected on Exhibit "A" to the Executive on
the Effective Date, unless otherwise provided in such Exhibit "A."
(3) NEW EMPLOYMENT AGREEMENT
The Executive agrees to execute and deliver, concurrently with his
receipt of the payment provided under Section (2) above, a new employment
agreement substantially in the form attached hereto as Exhibit "B," in which the
Executive agrees to continue his employment by the Company commencing on the
effective date of this Agreement through the earliest of (i) September 30, 2000,
(ii) the 60th day after the consummation of the Sales Agreements, and (iii) the
termination date determined by the Board of Directors of the Company, in order
to assist the Company in the implementation and consummation of the Sales
Agreements, the Chapter 11 bankruptcy filing and proceeding of the Company, the
contemplated liquidation of the Company and related events.
(4) SURVIVAL
The rights and obligations of the Company and the Executive which are
necessary to give full effect to the terms of this Agreement, including, but not
limited to, those set forth in the provisions outlined below of the Employment
Contracts, shall survive the execution of this Agreement:
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SECTION HEADING (IF ANY) CONTRACT
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3.1f Retention Agreement
3.4 No Mitigation Retention Agreement
4 Excise Taxes Retention Agreement
5 Claims Retention Agreement
6 Tax Withholding Retention Agreement
14 Governing Law/Jurisdiction Retention Agreement
3(d) Expiration Payments and Employment Agreement
Benefits (2nd paragraph only)
9 Confidentiality; Employment Agreement
Assignment of Rights
10 Non-Competition; Employment Agreement
Non-Solicitation
11 Indemnification Employment Agreement
19 Governing Law/Jurisdiction Employment Agreement
(5) GENERAL
5.1. This Agreement may be executed in counterparts, all of which taken
together shall constitute one instrument.
5.2. This Agreement is made and entered into in the State of Maryland,
and the laws of said state shall govern the validity and interpretation hereof
and the performance of the parties hereto of his respective duties and
obligations hereunder.
5.3. The parties hereto hereby covenant and agree that any judicial
action or proceeding to enforce or prevent the breach of any provision hereof,
including, without limitation, any action or proceeding to enforce any provision
hereof, for damages by reason of any alleged breach hereof, for a declaration of
such party's rights or obligations hereunder or for any other judicial remedy in
connection therewith, shall be commenced and maintained exclusively in a federal
or state court of competent jurisdiction in Xxxxxxxxxx County, Maryland.
5.4. This Agreement may be amended and any provision may be waived only
by a written agreement executed by the Company and the Executive to which the
amendment or waiver shall apply.
5.5. This Agreement, including (without limitation) Exhibits "A" and
"B" and the employment agreement described in Section (3) above, embodies the
entire understanding of the parties, and there is no further or other agreements
or understandings, written or oral, in effect
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between the parties hereto, relating to the subject matter hereof, unless
expressly referred to by reference herein or executed concurrently herewith.
5.6. Each party has been advised by counsel of his or its choice in
reviewing, understanding and executing this Agreement.
5.7. This Agreement shall be effective as of the Effective Date.
COMPANY:
PENNCORP FINANCIAL GROUP, INC.
By: /s/ Xxxxx X. Xxxxx
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Its: Chairman of the Board
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EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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