EXHIBIT 10.9
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is made and entered into as of the 12th day August, 1996, by
and between INTERCARGO CORPORATION, a Delaware corporation ("Intercargo"), and
XXXXXXX X. XXXXX, an individual residing in the State of Illinois ("Employee").
Other capitalized terms shall have the respective meanings set forth in Section
15 and elsewhere herein.
WITNESSETH
----------
WHEREAS, Intercargo wishes to employ Employee under the terms and
conditions as set forth herein; and
WHEREAS, the Employee is willing to accept such employment on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed as follows:
1. Employment. Intercargo hereby employs the Employee, and the
Employee hereby accepts employment with Intercargo, on the terms and conditions
set forth in this Agreement.
2. Employment Period. The term of Employee's employment shall be for a
one year period and shall commence as of August 12, 1996 and shall continue on a
month to month basis thereafter, unless this Agreement is terminated pursuant to
Section 14 hereof.
3. Duties. Employee shall serve as the Chief Financial Officer of
Intercargo and will, under the direction of Intercargo's Board of Directors and
President, faithfully and to the best of his ability perform the duties of a
Chief Financial Officer as assigned and revised by Intercargo's Board of
Directors and President from time to time. The Employee agrees to devote his
entire working time, energy and skills to such employment during the Employment
Period, and shall not render any services of a business, commercial or
professional nature to any person or organization other than Intercargo or be
engaged in any other business activity, without the prior written consent of
Intercargo's Board of Directors and/or the President. All duties to be rendered
hereunder shall be performed at such place or places as the President and/or
Board of Directors of Intercargo shall in good faith require.
The Employee represents and warrants that he is not a party to or bound by
any agreement or contract or subject to any restrictions, particularly, but
without limitation, in connection with any previous employment, which prevents
the Employee from entering into and performing his obligations under this
Agreement.
4. Compensation. During the Employment Period, the Employee shall be
compensated for his services as follows:
1
(a) Base Salary. The Employee shall receive an annual base salary
for the calendar year 1996 in the amount of One Hundred Twenty Thousand and
00/100 Dollars ($120,000.00), payable in accordance with Intercargo's
payroll schedule for all employees. If the Employment Period is extended
as provided for in Section 2, this base salary will be increased, on a pro
rata basis, beginning monthly at the beginning of each month commencing as
of August 12, 1996.
(b) Employee Benefits. The Employee shall be entitled to
participate in all employee benefit plans maintained by the Company,
including but not limited to, group hospitalization, medical and disability
plans, if applicable.
5. Employee Expenses. During the Employment Period, and following the
submission by Employee of the documentation necessary for deduction by
Intercargo on its Federal and State income tax returns of reasonable or
necessary expenditures incurred in the performance of Employee's duties
hereunder and the prior approval of such expenses by the President, Employee
shall be entitled to be reimbursed for such reasonable and necessary expenses,
including, but not limited to, expenses for entertainment, travel, meals, hotel
accommodations, professional seminars, and related use of the telephone.
6. Vacation. During the Employment Period, Employee shall be entitled
to vacations with pay in accordance with Intercargo's regular vacation policies
in effect from time to time.
7. No Competing Business. Employee hereby agrees that during the
Employment Period and for a period of two (2) years following termination of the
Employment Period, regardless of whether this Agreement is terminated for Cause,
or as a result of the natural termination of the Employment Period, except as
permitted by Section 10 of this Agreement, the Employee will not directly or
indirectly own, manage, operate, control, invest or acquire an interest in, or
otherwise engage or participate in (whether as a proprietor, partner,
stockholder, director, officer, employee, joint venture, investor, sales
representative or other participant in) any Competitive Business in Intercargo's
Market, without regard to (a) whether the Competitive Business has its office or
other business facilities within Intercargo's Market, (b) whether any of the
activities of the Employee referred to above itself occurs or is performed
within Intercargo's Market or (c) whether the Employee resides, or reports to an
office, within Intercargo's Market.
2
8. No Interference with the Business.
(a) Business Relationships. Employee hereby agrees that during
the Employment Period, and for a period of two (2) years following the
expiration of the Employment Period, except as permitted by Section 10 of
this Agreement, Employee will not directly or indirectly solicit, induce or
influence any sales representative, supplier, lender, lessor or any other
person which has a business relationship with Intercargo, or which had on
the date of this Agreement a business relationship with Intercargo, to
discontinue, reduce the extent of, discourage the development of or
otherwise harm such relationship with Intercargo.
(b) Customers. Employee hereby agrees that during the Employment
Period and during the remaining term as extended pursuant to any extension
options of Intercargo of any contracts between Intercargo and any customers
of Intercargo, to the extent such contracts extend beyond the Employment
Period, that Employee will not directly or indirectly attempt to induce any
such customers to terminate such contracts or otherwise divert from
Intercargo any trade or business being conducted by such customers with
Intercargo pursuant to such contracts; and, during the Employment Period
and for two (2) years following the expiration thereof, Employee will not
directly or indirectly solicit from, or otherwise agree to provide any
services to any customer to which Intercargo has provided any services
during the two years next preceding the termination of the Employment
Period, or any party whose identity or potential as a customer was
confidential or learned by the Employee during the Employment Period.
(c) Employees. Employee hereby agrees that during the Employment
Period and for a period of two (2) years following the expiration of the
Employment Period, except as permitted by Section 10 of this Agreement,
Employee will not (i) directly or indirectly recruit, solicit or otherwise
induce or influence any employee or sales agent of Intercargo to
discontinue such sales, employment or agency relationship with Intercargo,
or (ii) employ, seek to employ or cause any Competitive Business to employ
or seek to employ as a sales representative or employee for any Competitive
Business in Intercargo's Market, any person who is then (or was at any time
within six months prior to the date the Employee or the Competitive
Business employs or seeks to employ such person) employed by Intercargo.
9. No Disclosure of Confidential Information. The Employee hereby
agrees that he will not knowingly, directly or indirectly, disclose to anyone,
or use or otherwise exploit for the Employee's own benefit or for the benefit of
anyone other than Intercargo, any Confidential Information, except as permitted
by Section 10 of this Agreement.
10. Permitted Activities. The restrictions set forth in Sections 7, 8
and 9 of this Agreement shall not apply to Permitted Activities or to actions
taken by the Employee during the time the Employee may be employed by Intercargo
to the extent, but only to the extent, that such actions are (i) necessary in
connection with such employment, and (ii) expressly approved in writing by the
Board of Directors.
11. Inventions and Other Intellectual Property. Employee hereby agrees
that any design, invention or copyright materials made or created in the course
of his employment shall be the property of Intercargo. Employee further agrees
that at Intercargo's request and expense, he will execute any deeds or documents
necessary to transfer any such design, invention, copyright or trademark
materials to Intercargo and to cooperate with Intercargo or its nominee in
perfecting Intercargo's title (or the title of Intercargo's nominee) in such
materials. During the Employment Period, Employee shall keep Intercargo
informed of the development of all
3
designs, inventions or copyright materials made, conceived or reduced to
practice by Employee, in whole or in part, alone or with others, which either
result from any work Employee may do for, or at the request of Intercargo, or
are related to Intercargo's present or contemplated activities, investigations,
or obligations.
12. Reduction of Restrictions by Court Action. If the length of time,
type of activity, geographic area or other restrictions set forth in the
restrictions of Sections 7, 8 or 9 are deemed unreasonable in any court
proceeding, the parties hereto agree that the court may reduce such restrictions
to ones it deems reasonable to protect the substantial investment of Intercargo
in its business and the goodwill attached thereto.
13. Remedies. Employee understands that Intercargo will not have an
adequate remedy at law for the material breach or threatened breach by Employee
of any one or more of the covenants set forth in this Agreement and agrees that
in the event of any such material breach or threatened breach, Intercargo may,
in addition to the other remedies which may be available to it:
(a) declare forfeited any monies otherwise payable to the Employee
as of the date of such breach under the terms of Section 4 of this
Agreement, and otherwise cease all payments and obligations under this
Agreement; and/or
(b) file a suit in equity to enjoin Employee from the breach or
threatened breach of such covenants.
14. Termination. The Employment Period shall terminate upon the first
to occur of:
(a) the Employee's death,
(b) the Disability of Employee,
(c) the termination of the Agreement by the President of
Intercargo for Cause,
(d) after the first anniversary hereof upon 30 days notice.
Termination of the Employment shall not relieve the Employee of his
obligations under Sections 7, 8 and 9 hereof, notwithstanding that Employee's
compensation and this Agreement shall otherwise terminate.
In the event of the termination of Employee's employment with the Employer
for the reasons outlined in Sections (a), (b) (c) or (d), the Employee shall
receive from the Employer all accrued but unpaid compensation due under Section
4 herein.
15. Definitions. As used in this Agreement, terms defined in the
preamble and recitals of this Agreement shall have the meanings set forth
therein and the following terms shall have the meanings set forth below:
"Board of Directors" shall mean the Board of Directors of Intercargo.
"Cause" shall include, without limitation, (i) the inability of the
Employee to perform his duties due to a legal impediment such as, without
limitation, the entry against the Employee of an injunction, restraining order
or other type of judicial judgment, decree or order which would prevent or
hinder the Employee from performing his duties; (ii) a breach of any of the
restrictions
4
or covenants set forth in Sections 7, 8, 9, 11 and 12 hereof; (iii) the failure
to follow Intercargo's reasonable instructions with respect to the performance
of the Employee's duties; (iv) failure to comply with the normal and customary
methods of operation for Intercargo as reasonably determined by the President of
Intercargo, (v) excessive absenteeism, flagrant neglect of work, serious
misconduct, conviction of a felony, fraud, disclosure of any proprietary
information of Intercargo without the consent of Intercargo, or aiding a
competitor of Intercargo to the detriment of Intercargo.
"Competitive Business" shall mean any person or entity engaged in a
business similar to Intercargo's Line of Business.
"Confidential Information" shall mean trade secrets, customer and supplier
lists, marketing arrangements, business plans, projections, financial
information, training manuals, pricing manuals, product and service development
plans, market strategies, internal performance statistics and other
competitively sensitive information belonging to and concerning Intercargo and
which is material to Intercargo and not generally known by or available to the
public, whether or not in written or tangible form, as the same may exist at any
time during the Employment Period or during prior periods in which Employee was
employed by Intercargo.
"Control" shall mean, with respect to any person, the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.
"Disability" shall mean any illness, disability or incapacity of such a
character as to render Employee unable to perform his duties hereunder (which
determination shall be made by the Board of Directors) for a total period of
ninety (90) days, whether or not such days are consecutive, during any
consecutive twelve (12) month period.
"Employment Period" shall mean that period of time set forth in Section 2
of this Agreement.
"Intercargo's Line of Business" shall mean and include any products or
services manufactured, developed or distributed at any time during the
Employment Period by Intercargo. For purposes of this Agreement, such business
shall be deemed to be conducted with any person, institution, association or
entity to which sales or negotiations therefor (whether or not sales resulted)
have been made, products delivered or services performed, or to or from which
advertising, solicitation or other communications have been directed or received
during the previous three years.
"Intercargo's Market" shall mean those states or countries in which
Intercargo is doing business at any time during the Employment Period.
"Permitted Activities" shall mean (i) owning not more than 5% of the
outstanding shares of any one or more publicly-held Competitive Business which
has shares listed for trading on a securities exchange registered with the
Securities and Exchange Commission or through the automated quotation system of
a registered securities association, (ii) owning capital stock of Intercargo,
and (iii) serving as an officer, director or employee of Intercargo.
5
16. Notices. All notices, demands or other communications required or
provided hereunder shall be in writing and shall be deemed to have been given
and received when delivered in person or transmitted by facsimile transmission
(telecopy), cable, or telex to the respective parties, or seven (7) days after
dispatch by registered or certified mail, postage prepaid, addressed to the
parties at the addresses set forth below or at such other addresses as such
parties may designate by notice to the other parties:
If to Intercargo: Intercargo Corporation
Attn: Xxxxx X. Xxxxxx
0000 Xxxx Xxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxxxx, XX 00000
with a copy to: Xxxxxxx Xxxxx
Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000-0000
If to Employee: Xxxxxxx Xxxxx
c/o Intercargo Corporation
0000 Xxxx Xxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxxxx, XX 00000
17. Assignment. Neither party to this Agreement may assign or delegate
any of its rights or obligations hereunder without first obtaining the written
consent of the other party. However, this Agreement shall be binding upon and
inure to the benefit of any successor of Intercargo and any such successor shall
be deemed substituted for Intercargo under the terms of this Agreement. As used
in this Agreement, the term "successor" shall include any person, persons, firm,
partnership, corporation, or company which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets or
business of Intercargo and assumes Intercargo's obligations hereunder.
18. Amendment and Modification. No amendment or modification of the
terms of this Agreement shall be binding upon either party unless reduced to
writing and signed by Employee and a duly appointed officer of Intercargo.
19. Governing Law. The provisions of this Agreement shall be construed
in accordance with the internal laws and not the choice of laws provisions of
the State of Illinois.
20. Counterparts. This Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without reference to
the others.
21. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions and portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
6
22. Waiver. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or relinquishment of any right granted hereunder or
of the future performance of any such term, covenant or condition.
23. Headings. Headings of the paragraphs in this Agreement are for
reference purposes only and shall not be deemed to have any substantive effect.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.
____________________________
Xxxxxxx X. Xxxxx
INTERCARGO CORPORATION
By:__________________________
Its:__________________________
7
RIDER TO EMPLOYEMENT AGREEMENT
------------------------------
THIS RIDER is made this 12th day of August, 1996 by and between Intercargo
Corporation ("Employer") and Xxxxxxx X. Xxxxx ("Employee").
RECITALS
A. The Employer and Employee entered into an employment agreement dated August
12, 1996 relative to the Employee's employment at Intercargo Corporation. a)
B. The Employer and Employee wish to amend the terms of the Employment
Agreement pursuant to the terms of this Rider as follows:
1. It is agreed that Xxxxxxx Xxxxx shall start with three weeks
vacation and enter the vacation entitlement schedule as if he were
a five year employee.
All other terms of the Employment Agreement shall remain the same. Where the
terms of this Rider conflict with the terms of the Employment Agreement, this
Rider shall govern.
____________________________
Xxxxxxx X. Xxxxx
INTERCARGO CORPORATION
By:__________________________
Its:__________________________
8
