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EXHIBIT 10.9
EXECUTIVE EMPLOYMENT AGREEMENT
This is an Executive Employment Agreement between Xxxxxxxx-Xxxxxxxxx
Management Company ("Corporation") and Xxx Xxxxxxx ("Employment").
WHEREAS, Michigan Physicians Mutual Liability Company ("MPMLC") is
merging with State Mutual Insurance Company ("SMIC"), and
WHEREAS, MPMLC has no employees and contracts with the Corporation to
provide all of the employment services necessary to operate MPMLC, and
WHEREAS, Employee is the President and CEO of SMIC and will continue
the basic role and duties previously carried out by him with respect to SMIC's
operations after the merger as well as being an employee of the Corporation, and
WHEREAS, the parties wish to set forth their agreement regarding
Employee's duties and compensation as set forth in this Agreement,
IN CONSIDERATION of their mutual promises, the parties agree as
follows:
1. Title and Duties. The Corporation employs Employee as the Chief
Executive Officer of that portion of the Corporation's business
relating to SMIC and its policyholders.
Employee will be designated Senior Executive Staff status within
the configuration of the Corporation.
Employee and Corporation agree that Employee may assume such
additional duties relating to the Corporation and other aspects of the
Corporation's operations as may be reasonably assigned to Employee by the Board
of Directors of the Corporation.
Employee will carry out his duties at the Lapeer, Michigan and
East Lansing, Michigan locations of the Corporation and at such other locations
as may be appropriate for the proper discharge of the duties of Employee.
Employee agrees to devote his full business time and effort to the
performance of his duties for the Corporation. Those services will be rendered
to the best of his ability and with loyalty to the Corporation. The Employee
shall not, prior to termination of this Agreement, render services to any
person, firm, or corporation other than the Corporation or its affiliates,
either within or outside of business hours; nor shall Employee have any
interest, direct or indirect, in any business that is competitive with the
business of the Corporation, other than the ownership of publicly traded stock
in corporations with more than 500 shareholders.
2. Term. The initial term of this Agreement shall begin on the legal
consummation date of the merger, 1997, and continue for a term of five (5)
years. Thereafter, this Agreement shall
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automatically renew for successive additional one year terms, unless one of the
parties hereto has given written notice to the other, not less than six (6)
months prior to the expiration of a term, of an intention not to renew the
contract.
3. Compensation and Benefits. Employee's compensation for services
rendered under this Agreement are as follows:
a. Salary. The Corporation will pay Employee an annual salary of
$180,000 payable in accordance with the Corporation's payroll practices
which currently provide for payment every other week. The salary may be
increased each year during the term of this Agreement by the Board of
Directors in its sole discretion.
b. Incentive Compensation. Employee will be given an opportunity
to earn a bonus during each calendar year. The bonus shall be
determined pursuant to the "bonus plan" adopted for "senior executive
staff".
c. Employment Benefits. Employee will be eligible to participate
(after meeting general eligibility requirements) in all retirement,
insurance, and other fringe benefit programs of the Corporation.
d. General. The Board of Directors of the Corporation may grant
Employee greater or additional compensation. without imposing a legal
obligation on itself, the Corporation acknowledges that the intent of
the Board of Directors is to review Employee's performance and
compensation annually and to award Employee such increases as the Board
determines to be fair and reasonable in light of Employee's performance
and that of the Corporation, taking into account in such manner as the
Board deems appropriate any changes in the cost of living and in
federal and state tax laws.
4. Business Expenses. The Corporation shall pay or reimburse Employee
promptly upon presentation of appropriate vouchers for all travel, business, and
entertainment expenses reasonably incurred by Employee in connection with the
Corporation's business. For such purpose, Employee shall submit to the
Corporation periodic reports of such expenses and other disbursements pursuant
to the Corporation's usual policies.
The Corporation shall also provide Employee with an automobile of
Employee's choice, consistent with the Corporation policy on Employee vehicles,
during the term of this Agreement and shall pay or reimburse Employee for all
expenses involved in the operation of such automobile, including insurance. The
Corporation shall also pay all initiation or transfer fees, assessments, and
dues payable by Employee as a member of the Xxxxxxx or Warwick Hills Country
Clubs and any other costs of such membership, except costs incurred by Employee
for non-business use of such club membership.
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5. Termination. this Agreement shall terminate upon the death or
disability of employee. Disability means physical or mental illness resulting in
Employee's inability to render full-time services to the Corporation for a total
of nine (9) months in any period of twelve (12) consecutive months or less.
Either Employee or the Corporation may terminate this Agreement at any
time upon thirty (30) days written notice, with or without cause. If this
Agreement is terminated by the Corporation without cause, Employee shall be
entitled to severance pay equal to two (2) times his then current salary plus
two (2) times any incentive compensation paid in the year previous to
termination pursuant to paragraph 3.b of this Agreement. (The Corporation shall
deduct withholding and payroll taxes from his severance payment). Such severance
payment shall be in full settlement of any claims Employee may have against the
Corporation.
If this Agreement is terminated by the Corporation for cause, the Board
of Directors shall give Employee thirty (30) days' written notice of
termination, specifying with particularity the basis for termination.
Termination shall be deemed to be "for cause" if Employee has been dismissed for
dishonesty, for conviction of a felony, or for material breach of this
Agreement.
If Employee terminates employment, the Corporation shall not be liable
for severance pay or for the Employee's salary, incentive, or other benefits
payable to the Employee past the termination date.
6. Successors and Assigns. This Agreement is binding upon the
successors and assigns of the Corporation, any assigns of all or substantially
all of its business, and any other corporation into which the Corporation may be
merged or with which it may be consolidated. This Agreement, and any rights
Employee may have to receive payments, may not be assigned or pledged by
Employee.
7. Indemnification. If employee is named as a defendant in a claim or
suit because of actions he has taken in his capacity as an employee of
Corporation, then the Corporation will provide legal representation for Employee
at the Corporation's expense, and will pay any damages which may be awarded
against Employee. This payment will be made so long as the actions of Employee
were within the scope of his employment and were not knowingly or intentionally
illegal or wrongful. Employee agrees to assist Corporation in the defense of any
such claim or suit, and Corporation reserves the right to select the legal
counsel and decide how the defense is conducted, including whether settlement
will e made. The Corporation's obligation under this paragraph will not extend
to any claim for which there is coverage under an insurance policy.
8. Other. Any dispute or claim involving this Agreement shall be
settled by arbitration under the rules of the American Arbitration Association.
Any dispute or claim shall be deemed waived unless arbitration is demanded
within ninety (90) days of the occurrence giving rise to the dispute or claim.
The arbitrator shall have no authority to change any provisions of this
Agreement; the arbitrator's authority shall be to interpret or apply the
provisions of this Agreement. The
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decision the arbitrator shall be final and binding and the exclusive remedy for
any alleged breach of the employment relationship. Judgement upon the award
rendered by the arbitrator may be entered in any court having jurisdiction.
9. Confidential Information and Trade Secrets. Employee acknowledges
that he will be working with confidential information and trade secrets which
are the property of the Corporation. Such information includes, but is not
limited to: client lists and information, medical data, financial data, sales
data, marketing data, policyholder data, claim data, personnel information,
business files, contracts, documents, business strategies, business
opportunities, computer software, software codes, and software documentation.
During and after employment with the Corporation, Employee agrees not to share
such information with any person outside of the Corporation, except upon prior
written authorization by the Corporation.
This Agreement contains the entire agreement of the parties, and
supersedes all prior oral or written understandings and agreements. It can e
modified only in writing signed by both parties. The Agreement is governed by
Michigan law.
XXXXXXXX-XXXXXXXXX
MANAGEMENT COMPANY
Dated: 7-18-97 By: /s/ Xxxxxxx X. Xxxxxxxxx
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Its: President
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Dated: 7-17-97 /s/ Xxxxxx X. Xxxxxxx
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Xxx Xxxxxxx
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