EXHIBIT 10.23
EXECUTIVE
EMPLOYMENT AGREEMENT
P R E A M B L E
This Executive Employment Agreement defines the essential terms and
conditions of our employment relationship with you. The subjects
covered in this Agreement are vitally important to you and to the
Company. Thus, you should read the document carefully and ask any
questions before signing the Agreement. Given the importance of these
matters to you and the Company, all executives shall sign the Agreement
as a condition of employment.
This EMPLOYMENT AGREEMENT, dated and effective this 4th day of October,
2002 is entered into by and between Forethought Financial Services, Inc.
("Company"), and Xxxxxxx X. Xxxx ("Executive").
W I T N E S S E T H:
WHEREAS, the Company and its affiliated entities are engaged in the
death care, healthcare, funeral services industries and the business of
providing various financial services to and through the funeral industry
throughout the United States and North America, including various insurance and
trust products through which customers can fund their funeral on a pre-need
basis;
WHEREAS, the Company is willing to continue the employment of the
Executive in an executive capacity and Executive desires to continue to be
employed by the Company in such capacity based upon the terms and conditions set
forth in this Agreement;
WHEREAS, the Executive previously entered into an employment agreement
with Company dated January 19, 2000 (the "Prior Agreement"), and the parties
hereto want to terminate the Prior Agreement and enter into this Agreement.
WHEREAS, in the course of the employment contemplated under this
Agreement, it will be necessary for Executive to acquire knowledge of certain
trade secrets and other confidential and proprietary information regarding the
Company as well as its parent, subsidiary and/or affiliated entities
(hereinafter jointly referred to as the "Companies") and prior to the execution
of this Agreement Executive has acquired knowledge of certain trade secrets and
other confidential and proprietary information regarding the Companies; and
WHEREAS, the Company and Executive (collectively referred to herein as
the "Parties") acknowledge and agree that the execution of this Agreement is
necessary to memorialize the terms and conditions of their employment
relationship as well as safeguard against the unauthorized disclosure or use of
the Company's confidential information and to otherwise preserve the goodwill
and ongoing business value of the Company;
NOW THEREFORE, in consideration of Executive's employment, the
Company's willingness to disclose certain confidential and proprietary
information to Executive and the mutual covenants contained herein as well as
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:
1. Employment. The Company agrees to employ Executive and Executive agrees
to serve as President and CEO.
2. Duties. Executive agrees to perform all duties and responsibilities
traditionally assigned to, or falling within the normal
responsibilities of, an individual employed in the above-referenced
position. Executive also agrees to perform any and all additional
duties or responsibilities as may be assigned by the Company or the CEO
of Xxxxxxxxxxx Industries, Inc. ("Xxxxxxxxxxx") in their sole
discretion.
3. Best Efforts and Duty of Loyalty. During the term of employment with
the Company, Executive covenants and agrees to perform all assigned
duties in a diligent and professional manner and in the best interest
of the Company. Executive agrees to devote his full working time,
attention, talents, skills and best efforts to further the Company's
business and agrees not to take any action, or make any omission, that
deprives the Company of any business opportunities or otherwise act in
a manner that conflicts with the best interest of the Company or is
otherwise detrimental to its business. Executive agrees not to engage
in any outside business activity, whether or not pursued for gain,
profit or other pecuniary advantage, without the express written
consent of the Company. Executive shall act at all times in accordance
with the Xxxxxxxxxxx Handbook of Ethical Business Conduct, the
Corporate Compliance Handbook and all other applicable policies which
may exist or be adopted by the Company from time to time.
4. At-Will Employment. Subject to the terms and conditions set forth
below, Executive specifically acknowledges and accepts such employment
on an "at-will" basis and agrees that both Executive and the Company
retain the right to terminate this relationship at any time, with or
without cause, for any reason not prohibited by applicable law upon
proper notice. Executive acknowledges that nothing in this Agreement is
intended to create, nor should be interpreted to create, an employment
contract for any specified length of time between the Company and
Executive.
5. Compensation. For all services rendered by Executive on behalf of, or
at the request of, the Company, Executive shall be paid as follows:
(a) A base salary at the bi-weekly rate of Eight Thousand, Seven
Hundred Sixty-nine Dollars and Twenty-three Cents ($8,769.23),
less usual and ordinary deductions;
(b) Incentive compensation, payable solely at the discretion of
the Company, pursuant to the Company's Exempt Employee
Executive Compensation Program or any other program as the
Company may establish in its sole discretion including the
arrangement summarized in Exhibit B attached hereto; and
(c) Such additional compensation, benefits and perquisites as the
Company may deem appropriate.
Notwithstanding anything contained herein to the contrary, Executive
acknowledges that the Company specifically reserves the right to make
changes to Executive's compensation in its sole discretion including,
but not limited to, modifying or eliminating a compensation component,
provided that if any such changes result in a reduction of compensation
or benefits. Such
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reduction shall be consistent with reductions generally imposed on
other executive officers of the Company. The Parties agree that such
changes shall be deemed effective immediately and a modification of
this Agreement unless, within fourteen (14) days after receiving notice
of such change, Executive exercises his right to terminate this
Agreement without cause. The Parties anticipate that Executive's
compensation structure will be reviewed on an annual basis but
acknowledge that the Company shall have no obligation to do so.
6. Direct Deposit. As a condition of employment, and within thirty (30)
days of the effective date of this Agreement, Executive agrees to make
all necessary arrangements to have all sums paid pursuant to this
Agreement direct deposited into one or more bank accounts as designated
by Executive.
7. Warranties and Indemnification. Executive warrants that he is not a
party to any contract, restrictive covenant, or other agreement
purporting to limit or otherwise adversely affecting his ability to
secure employment with any third party. Alternatively, should any such
agreement exist, Executive warrants that the contemplated services to
be performed hereunder will not violate the terms and conditions of any
such agreement. In either event, Executive agrees to fully indemnify
and hold the Company harmless from any and all claims arising from, or
involving the enforcement of, any such restrictive covenants or other
agreements.
8. Restricted Duties. Executive agrees not to disclose, or use for the
benefit of the Company, any confidential or proprietary information
belonging to any predecessor employer that otherwise has not been made
public and further acknowledges that the Company has specifically
instructed him not to disclose or use such confidential or proprietary
information. Based on his understanding of the anticipated duties and
responsibilities hereunder, Executive acknowledges that such duties and
responsibilities will not compel the disclosure or use of any such
confidential and proprietary information.
9. Termination Without Cause. Executive's employment may be terminated at
any time, without cause, by either party upon sixty (60) days' advance
written notice or pay in lieu of notice. In such event, Executive shall
only be entitled to such compensation, benefits and perquisites which
have been paid or fully accrued as of the effective date of his
separation.
10. Termination With Cause. Executive's employment may be terminated at any
time "for cause" without notice or prior warning. For purposes of this
Agreement, "cause" shall be defined as set forth in that certain
Retention Agreement between the Company and Executive dated as of
October 8, 2001.
Upon the occurrence or discovery of any event covered by the definition
of "cause" above, the Company shall have the right to terminate
Executive's employment, effective immediately, by providing notice
thereof to Executive without further obligation to him, other than
accrued wages or other accrued benefits of employment (collectively
referred to herein as "Accrued Obligations"), which shall be paid in
accordance with the Company's past practice and applicable law.
11. Termination Due to Death or Disability. In the event Executive dies or
suffers a disability (as defined herein) during the term of employment,
this Agreement shall automatically be terminated on the date of such
death or disability without further obligation on the part of the
Company other than the payment of Accrued Obligations. For purposes of
this Agreement, Executive shall be considered to have suffered a
"disability" upon the occurrence of one or more of the following
events:
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(i) Executive becomes eligible for or receives any benefits
pursuant to any disability insurance policy as a result of a
determination under such policy that Executive is permanently
disabled;
(ii) Executive becomes eligible for or receives any disability
benefits under the Social Security Act; or
(iii) A good faith determination by the Company that Executive is
and will likely remain unable to perform the essential
functions of his duties or responsibilities hereunder on a
full-time basis, with or without reasonable accommodation, as
a result of any mental or physical impairment.
Notwithstanding anything expressed or implied above to the contrary,
the Company agrees to fully comply with its obligations under the
Americans with Disabilities Act as well as any other applicable
federal, state, or local law, regulation, or ordinance governing the
protection of individual with such disabilities as well as the
Company's obligation to provide reasonable accommodation thereunder.
12. Severance Payments. In the event Executive's employment is terminated
by the Company without cause, and subject to the normal terms and
conditions imposed by the Company (including those set forth herein and
in the attached Separation and Release Agreement), Executive shall be
eligible to receive severance pay based upon his base salary at the
time of termination for a period determined in accordance with any
guidelines as may be established by the Company or for a period up to
six (6) months (whichever is longer). No severance pay shall be paid if
Executive voluntarily leaves the Company's employ or is terminated for
cause. Any severance pay made payable hereunder shall be paid in lieu
of, and not in addition to, any notice pay or other accrued
compensation. Additionally, such severance pay is contingent upon
Executive fully complying with the restrictive covenants contained
herein and executing a Separation and Release Agreement in a form not
substantially different from that attached to this Agreement as Exhibit
A. Further, the Company's obligation to provide severance shall be
deemed null and void should Executive fail or refuse to execute the
Separation and Release Agreement in such form within any time period as
may be proscribed by law or, in absence thereof, fourteen (14) days.
13. Additional Payment.
(a) Notwithstanding anything in this Agreement to the contrary, in the
event that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the
Company or any affiliate which effectuates a change in ownership or
effective control of the Company or a change in the ownership of a
substantial portion of the assets of the Company, in either case,
within the meaning of Section 280G(b)(2)(A)(i) of the Code and the
regulations promulgated thereunder (a "Change in Ownership"), to or for
the benefit of Executive (the "Payments") would be subject to the
excise tax imposed by Section 4999 of the Code, or any interest or
penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then, the
Company shall pay to Executive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Executive of all
taxes (including any Excise Tax) imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments. For purposes of
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determining the amount of the Gross-Up Payment, Executive shall be
deemed to (A) pay federal income taxes at the highest marginal rates of
federal income taxes at the highest marginal rate of taxation for the
calendar year in which the Gross-Up Payment is to be made and, (B) pay
applicable state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-Up Payment is to be
made, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes.
Notwithstanding the foregoing provisions of this Section 13(a), if it
shall be determined that Executive is entitled to a Gross-Up Payment,
but that the Payments would not be subject to the Excise Tax if the
Payments were reduced by an amount that is less than $20,000 (U.S.),
then the amounts payable to Executive under this Agreement shall be
reduced (but not below zero) to the maximum amount that could be paid
to Executive without giving rise to the Excise Tax (the "Safe Harbor
Cap"), and no Gross-Up Payment shall be made to Executive. The
reduction of the amounts payable hereunder, if applicable, shall be
made by reducing first the payments as elected by Executive. For
purposes of reducing the Payments to the Safe Harbor Cap, only amounts
payable under this Agreement (and no other Payments) shall be reduced.
If the reduction of the amounts payable hereunder would not result in a
reduction of the Payments to the Safe Harbor Cap, no amounts payable
under this Agreement shall be reduced pursuant to this provision.
(b) Subject to the provisions of Section 13(a), all determinations
required to be made under this Section 13, including whether
and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in
arriving at such determinations, shall be made by the public
accounting firm that is retained by the Company as of the date
immediately prior to the Change in Ownership (the "Accounting
Firm") which shall provide detailed supporting calculations
both to the Company and Executive within fifteen (15) business
days of the receipt of notice from the Company or Executive
that there has been a Payment, or such earlier time as is
requested by the Company (collectively, the "Determination").
In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the
Change in Ownership, Executive may appoint another U.S.
nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely
by the Company and the Company shall enter into any agreement
requested by the Accounting Firm in connection with the
performance of the services hereunder. The Gross-Up Payment
under this Section 13(a) with respect to any Payments made to
Executive shall be made no later than thirty (30) days
following such Payment. If the Accounting Firm determines that
no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion to such effect, and to the
effect that failure to report the Excise Tax, if any, on
Executive's applicable federal income tax return should not
result in the imposition of a negligence or similar penalty.
In the event the Accounting Firm determines that the Payments
shall be reduced to the Safe Harbor Cap, it shall furnish
Executive with a written opinion to such effect. The
Determination by the Accounting Firm shall be binding upon the
Company and Executive.
(c) As a result of the uncertainty in the application of Section
4999 of the Code at the time of the Determination, it is
possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment") or
Gross-Up Payments are made by the Company which should not
have been made ("Overpayment"), consistent with the
calculations required to be made hereunder. In the event that
Executive thereafter is required to make payment of any Excise
Tax or additional Excise Tax, the
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Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the
Code) shall be promptly paid by the Company to or for the
benefit of Executive. In the event the amount of the Gross-Up
Payment exceeds the amount necessary to reimburse Executive
for his Excise Tax, the Accounting Firm shall determine the
amount of the Overpayment that has been made and any such
Overpayment (together with interest at the rate provided in
Section 1274(b)(2) of the Code) shall be promptly paid by
Executive (to the extent he has received a refund if the
applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company. Executive shall
cooperate, to the extent his expenses are reimbursed by the
Company, with any reasonable requests by the Company in
connection with any contest or disputes with the Internal
Revenue Service in connection with the Excise Tax.
(d) The parties hereto agree that this Section 13 supercedes
paragraphs 4 of the Retention Agreement by and between the
Company and the Executive dated October 8, 2001 (the
"Retention Agreement") and of the Change in Control Agreement
by and between Xxxxxxxxxxx and the Executive (the "CIC
Agreement") and such paragraphs 4 shall no longer be in effect
upon the sale of the stock of the Company by Xxxxxxxxxxx.
(e) The parties hereto agree that if amounts are payable under the
Retention Agreement with respect to a transaction or series of
transactions no payments or benefits shall be payable under
the CIC Agreement with respect to the same transaction or
series of transactions.
14. Assignment of Rights.
(a) Copyrights. Executive agrees that all works of authorship
fixed in any tangible medium of expression by him during the
term of this Agreement and the Prior Agreement relating to the
Company's, Xxxxxxxxxxx Industries Inc.'s or any of either
company's affiliates' ("Affiliate" and collectively with the
Company and Xxxxxxxxxxx the "Group") business ("Works"),
either solely or jointly with others, shall be and remain
exclusively the property of the Company or, if applicable
other member of the Group. Each such Work created by Executive
is a "work made for hire" under the copyright law and the
Company or, if applicable, other members of the Group may file
applications to register copyright in such Works as author and
copyright owner thereof. If, for any reason, a Work created by
Executive is excluded from the definition of a "work made for
hire" under the copyright law, then Executive does hereby
assign, sell, and convey to the Company or, if applicable,
other members of the Group, the entire rights, title, and
interests in and to such Work, including the copyright
therein, to the Company or, if applicable, other members of
the Group. Executive will execute any documents which the
Company or, if applicable, other members of the Group, deems
necessary in connection with the assignment of such Work and
copyright therein. Executive will take whatever steps and do
whatever acts the Company or, if applicable, other members of
the Group, requests, including, but not limited to, placement
of the Company's proper copyright notice on Works created by
Executive to secure or aid in securing copyright protection in
such Works and will assist the Company or, if applicable,
other members of the Group, or their nominees in filing
applications to register claims of copyright in such Works.
The Company or, if applicable, other members of the Group,
shall have free and unlimited access at all times to all Works
and all copies thereof and shall have the right to claim and
take possession on demand of such Works and copies.
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(b) Inventions. Executive agrees that all discoveries, concepts,
and ideas, whether patentable or not, including, but not
limited to, apparatus, processes, methods, compositions of
matter, techniques, and formulae, as well as improvements
thereof or know-how related thereto, relating to any present
or prospective product, process, or service of any member of
the Group ("Inventions") that Executive conceives or makes
during the term of this Agreement and the Prior Agreement
relating to the business of any member of the Group, shall
become and remain the exclusive property of the Company or
other member of the Group, if applicable, whether patentable
or not, and Executive will, without royalty or any other
consideration:
(i) inform the Company or other members of the Group, if
applicable, promptly and fully of such Inventions by
written reports, setting forth in detail the
procedures employed and the results achieved;
(ii) assign to the Company or other members of the Group,
if applicable, all of his rights, title, and
interests in and to such Inventions, any applications
for United States and foreign Letters Patent, any
United States and foreign Letters Patent, and any
renewals thereof granted upon such Inventions;
(iii) assist the Company or other members of the Group, if
applicable, or their nominees, at the expense of the
Company, to obtain such United States and foreign
Letters Patent for such Inventions as the Company or
other members of the Group, if applicable, may elect;
and
(iv) execute, acknowledge, and deliver to the Company, or
other members of the Group, at the expense of the
appropriate member of the Group such written
documents and instruments, and do such other acts,
such as giving testimony in support of his
inventorship, as may be necessary in the opinion of
the Company, or other member of the Group, to obtain
and maintain United States and foreign Letters Patent
upon such Inventions and to vest the entire rights
and title thereto in the Company, or other member of
the Group, and to confirm the complete ownership by
the Company, or other member of the Group, of such
Inventions, patent applications, and patents.
15. Company Property. All records, files, drawings, documents, equipment,
and the like relating to, or provided by, any member of the Group,
shall be and remain the sole property of the appropriate member of the
Group. Upon termination of employment, Executive shall immediately
return to the appropriate member of the Group, all such items without
retention of any copies. De minimis items such as pay stubs, 401(k)
plan summaries, employee bulletins, and the like are excluded from this
requirement.
16. Confidential Information. Executive acknowledges that the Group
possesses certain trade secrets as well as other confidential and
proprietary information that they have acquired or will acquire at
great effort and expense. Such information may include, without
limitation, confidential information regarding the Group's products and
services, marketing strategies, business plans, operations, costs,
current or prospective customer information (including customer
contacts, requirements, creditworthiness and like matters), product
concepts, designs, prototypes or specifications, research and
development efforts, technical data and know-how, sales information,
including pricing and other terms and conditions of sale, financial
information, internal procedures, techniques, forecasts, methods, trade
information, trade secrets, software programs, project requirements,
inventions, trademarks, trade names, and similar information regarding
the
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Group's business (collectively referred to herein as "Confidential
Information"). Executive further acknowledges that, as a result of his
employment with the Company, Executive will have access to, will become
acquainted with, and/or may help develop, such Confidential
Information.
17. Restricted Use of Confidential Information. Executive agrees that all
Confidential Information is and shall remain the sole and exclusive
property of the Group. Except as may be expressly authorized by the
appropriate member of the Group in writing, Executive agrees not to
disclose, or cause any other person or entity to disclose, any
Confidential Information to any third party while employed by the
Company and for as long thereafter as such information remains
confidential (or as limited by applicable law). Further, Executive
agrees to use such Confidential Information only in the course of
Executive's duties in furtherance of the Company's business and agrees
not to make use of any such Confidential Information for Executive's
own purposes or for the benefit of any other entity or person.
18. Acknowledged Need for Limited Restrictive Covenants. Executive
acknowledges that the Group has spent and will continue to expend
substantial amounts of time, money and effort to develop its business
strategies, Confidential Information, customer relationships, goodwill
and employee relationships, and that Executive will benefit from these
efforts. Further, Executive acknowledges the inevitable use of, or
near-certain influence by his knowledge of, the Confidential
Information disclosed to Executive during the course of employment if
allowed to compete against any member of the Group in an unrestricted
manner and that such use would be unfair and extremely detrimental to
each member of the Group. Accordingly, based on these legitimate
business reasons, Executive acknowledges and agrees that each member of
the Group other than the Company is a third party beneficiary of this
Agreement and acknowledges and agrees that each member of the Group may
enforce its rights under this Agreement and acknowledges each member of
the Group's need to protect its legitimate business interests by
reasonably restricting Executive's ability to compete with the Group on
a limited basis.
19. Non-Solicitation. During Executive's employment and for a period of two
years thereafter, Executive agrees not to directly or indirectly engage
in the following prohibited conduct:
(a) Solicit, offer products or services to, accept orders from, or
otherwise transact business with, any customer or entity with
whom Executive had contact or transacted any business during
the eighteen (18) month period preceding Executive's date of
separation or about whom Executive possessed, or had access
to, confidential and proprietary information;
(b) Attempt to entice or otherwise cause any third party to
withdraw, curtail or cease doing business with the Group,
specifically including customers, venders, independent
contractors and other third party entities;
(c) Disclose to any person or entity the identities, contacts or
preferences of any customers of the Group, or the identity of
any other persons or entities having business dealings with
the Group;
(d) Induce any individual who has been employed by or had provided
services to the Group within the six (6) month period
immediately preceding the effective date of Executive's
separation to terminate such relationship with the Group;
(e) Offer employment to, accept employment inquiries from, or
employ any individual who is or had been employed by the Group
at any time within the six (6) month period immediately
preceding such offer or inquiry; or
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(f) Otherwise attempt to directly or indirectly interfere with the
Group's business or its relationship with its employees,
consultants, independent contractors or customers.
20. Limited Non-Compete. For the above reasons, and as a condition of
employment to the fullest extent permitted by law, Executive agrees
during the Relevant Non-Compete Period not to directly or indirectly
engage in the following competitive activities:
(a) Executive shall not have any ownership interest in, work for,
advise, consult, or have any business connection or business
or employment relationship with any Competitor unless
Executive provides written notice to the affected member of
the Group of such relationship prior to entering into such
relationship and, further, provides sufficient written
assurances to the affected member of the Group's satisfaction
that such relationship will not jeopardize that Group member's
legitimate interests or otherwise violate the terms of this
Agreement;
(b) Executive shall not engage in any research, development,
production, sale or distribution of any Competitive Products,
specifically including any products or services relating to
those for which Executive had responsibility for the eighteen
(18) month period preceding Executive's date of separation;
(c) Executive shall not market, sell, or otherwise offer or
provide any Competitive Products within the applicable
Geographic Territory, specifically including any products or
services relating to those for which Executive had
responsibility for the eighteen (18) month period preceding
Executive's date of separation; and
(d) Executive shall not distribute, market, sell or otherwise
offer or provide any Competitive Products to any customer of
the Group with whom Executive had contact (either directly or
indirectly) or for which Executive had responsibility at any
time during the eighteen (18) month period preceding
Executive's date of separation.
21. Non-Compete Definitions. For purposes of this Agreement, the Parties
agree that the following terms shall apply:
(a) "Competitive Products" shall include any product or service
that directly or indirectly competes with, is substantially
similar to, or serves as a reasonable substitute for, any
product or service in research, development or design, or
manufactured, produced, sold or distributed by any member of
the Group;
(b) "Competitor" shall include any person or entity that offers or
plans to offer any Competitive Products;
(c) "Geographic Territory" shall include any territory formally
assigned to Executive as well as all territories in which
Executive has provided any services, sold any products or
otherwise had responsibility at any time during the eighteen
(18) month period preceding Executive's date of separation;
(d) "Relevant Non-Compete Period" shall include the period of
Executive's employment with the Company as well as a period of
two (2) years after such employment is terminated, regardless
of the reason for such termination provided, however, that
this period shall be reduced to the greater of (i) six (6)
months or (ii) the total length of
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Executive's employment with the Company, including employment
with a parent, subsidiary or affiliated entity, if such
employment is less than eighteen (18) months;
(e) "Directly or indirectly" shall be construed such that the
foregoing restrictions shall apply equally to Executive
whether performed individually or as a partner, shareholder,
officer, director, manager, employee, salesman, independent
contractor, broker, agent, or consultant for any other
individual, partnership, firm, corporation, company, or other
entity engaged in such conduct.
22. Consent to Reasonableness. In light of the above-referenced concerns,
including Executive's knowledge of and access to the Group's
Confidential Information, Executive acknowledges that the terms of the
foregoing restrictive covenants are reasonable and necessary to protect
the Group's legitimate business interests and will not unreasonably
interfere with Executive's ability to obtain alternate employment. As
such, Executive hereby agrees that such restrictions are valid and
enforceable, and affirmatively waives any argument or defense to the
contrary. The Executive agrees that he has the affirmative duty to
notify future employers of the provisions of Sections 15 through 26
hereof.
23. Survival of Restrictive Covenants. Executive acknowledges that the
above restrictive covenants shall survive the termination of this
Agreement and the termination of Executive's employment for any reason.
Executive further acknowledges that any alleged breach by any member of
the Group of any contractual, statutory or other obligation shall not
excuse or terminate the obligations hereunder or otherwise preclude any
member of the Group from seeking injunctive or other relief. Rather,
Executive acknowledges that such obligations are independent and
separate covenants undertaken by Executive for the benefit of the
Company and the other members of the Group.
24. Effect of Transfer to Affiliate. Executive acknowledges that the above
restrictive covenants shall survive, and be extended to cover, the
transfer of Executive from the Company to its parent, subsidiary,
sister corporation or any other Affiliate. Specifically, in the event
of Executive's temporary or permanent transfer to an Affiliate, he
agrees that the foregoing restrictive covenants shall remain in force
so as to continue to protect the Group for the duration of the
non-compete period, measured from his effective date of transfer to an
Affiliate. Additionally, Executive acknowledges that this Agreement
shall be deemed to have been automatically assigned to the Affiliate as
of his effective date of transfer such that the above-referenced
restrictive covenants (as well as all other terms and conditions
contained herein) shall be construed thereafter to protect the
legitimate business interests and goodwill of the Affiliate as if
Executive and the Affiliate had independently entered into this
Agreement. Executive's acceptance of his transfer to, and subsequent
employment by, the Affiliate shall serve as consideration for (as well
as be deemed as evidence of his consent to) the assignment of this
Agreement to the Affiliate as well as the extension of such restrictive
covenants to the Affiliate. Executive agrees that this provision shall
apply with equal force to any subsequent transfers of Executive from
one Affiliate to another Affiliate.
25. Scope of Restrictions. If the scope of any restriction contained in any
preceding paragraphs of this Agreement is deemed too broad to permit
enforcement of such restriction to its fullest extent, then such
restriction shall be enforced to the maximum extent permitted by law,
and Executive hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to enforce
such restriction.
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26. Specific Enforcement/Injunctive Relief. Executive agrees that it would
be difficult to measure any damages to the Group from a breach of the
above-referenced restrictive covenants, but that such damages would be
great, incalculable and irremedial, and that monetary damages alone
would be an inadequate remedy. Accordingly, Executive agrees that any
member of the Group shall be entitled to immediate injunctive relief
against such breach, or threatened breach, in any court having
jurisdiction. In addition, if Executive violates any such restrictive
covenant, Executive agrees that the period of such violation shall be
added to the term of the restriction. In determining the period of any
violation, the Parties stipulate that in any calendar month in which
Executive engages in any activity violative of such provisions,
Executive shall be deemed to have violated such provision for the
entire month, and that month shall be added to the duration of the
non-competition provision. Executive acknowledges the consideration
received from the members of the Group in exchange for these
restrictive covenants and further acknowledges that the remedies
described above shall not be the exclusive remedies, and any member of
the Group may seek any other remedy available to it either in law or in
equity, including the recovery of compensatory or punitive damages.
Executive further agrees that the member of the Group shall be entitled
to an award of all costs and attorneys' fees incurred by it in any
attempt to enforce the terms of this Agreement.
27. Publicly Traded Stock. The Parties agree that nothing contained in this
Agreement shall be construed to prohibit Executive from investing his
personal assets in any stock or corporate security traded or quoted on
a national securities exchange or national market system provided,
however, such investments do not require any services on the part of
Executive in the operation or the affairs of the business or otherwise
violate the Xxxxxxxxxxx Handbook of Ethical Business Conduct or
successive handbook thereto.
28. Titles. Titles are used for the purpose of convenience in this
Agreement and shall be ignored in any construction of it.
29. Severability. The Parties agree that each and every paragraph,
sentence, clause, term and provision of this Agreement is severable and
that, in the event any portion of this Agreement is adjudged to be
invalid or unenforceable, the remaining portions thereof shall remain
in effect and be enforced to the fullest extent permitted by law.
Further, should any particular clause, covenant, or provision of this
Agreement be held unreasonable or contrary to public policy for any
reason, the Parties acknowledge and agree that such covenant, provision
or clause shall automatically be deemed modified such that the
contested covenant, provision or clause will have the closest effect
permitted by applicable law to the original form and shall be given
effect and enforced as so modified to whatever extent would be
reasonable and enforceable under applicable law.
30. Choice of Forum. Executive acknowledges that the Company is primarily
based in Indiana, and Executive understands and acknowledges the
Company's desire and need to defend any litigation against it in
Indiana. Accordingly, the Parties agree that any claim of any type
brought by Executive against the Company, any other member of the
Group, or any of their employees or agents must be maintained only in a
court sitting in Xxxxxx County, Indiana, or Xxxxxx County, Indiana, or,
if a federal court, the Southern District of Indiana, Indianapolis
Division. Executive further understands and acknowledges that in the
event any member of the Group initiates litigation against Executive,
such member may need to prosecute such litigation in such state where
the Executive is subject to personal jurisdiction. Accordingly, for
purposes of enforcement of this Agreement, Executive specifically
consents to personal jurisdiction in the State of Indiana as well as
any state in which resides a customer assigned to the Executive.
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31. Choice of Law. This Agreement shall be deemed to have been made within
the County of Xxxxxx, State of Indiana and shall be interpreted and
construed in accordance with the laws of the State of Indiana. Any and
all matters of dispute of any nature whatsoever arising out of, or in
any way connected with the interpretation of this Agreement, any
disputes arising out of the Agreement or the employment relationship
between the Parties hereto, shall be governed by, construed by and
enforced in accordance with the laws of the State of Indiana without
regard to any applicable state's choice of law provisions.
32. Assignment-Notices. The rights and obligations of the Company under
this Agreement shall inure to its benefit, as well as the benefit of
its parent, subsidiary, successor and affiliated entities, and shall be
binding upon the successors and assigns of the Company. This Agreement,
being personal to Executive, cannot be assigned by Executive, but his
personal representative shall be bound by all its terms and conditions.
Any notice required hereunder shall be sufficient if in writing and
mailed to the last known residence of Executive or to the Company at
its principal office with a copy mailed to the Office of General
Counsel.
33. Amendments and Modifications. Except as specifically provided herein,
no modification, amendment, extension or waiver of this Agreement or
any provision hereof shall be binding upon the Company or Executive
unless in writing and signed by both Parties. The waiver by the Company
of a breach of any provision of this Agreement by Executive shall not
be construed as a waiver of any subsequent breach. Nothing in this
Agreement shall be construed as a limitation upon the Company's right
to modify or amend any of its manuals or policies in its sole
discretion and any such modification or amendment which pertains to
matters addressed herein shall be deemed to be incorporated herein and
made a part of this Agreement.
34. Outside Representations. Executive represents and acknowledges that in
signing this Agreement he does not rely, and has not relied, upon any
representation or statement made by the Company, any affiliates or by
any of the Company's or any affiliates' employees, officers, agents,
stockholders, directors or attorneys with regard to the subject matter,
basis or effect of this Agreement other than those specifically
contained herein.
35. Voluntary and Knowing Execution. Executive acknowledges that he has
been offered a reasonable amount of time within which to consider and
review this Agreement; that he has carefully read and fully understands
all of the provisions of this Agreement; and that he has entered into
this Agreement knowingly and voluntarily.
36. Entire Agreement. This Agreement constitutes the entire employment
agreement between the Parties hereto concerning the subject matter
hereof and shall supersede and terminate the Prior Agreement and all
other prior and contemporaneous agreements between the Parties in
connection with the subject matter of this Agreement. Nothing in this
Agreement, however, shall affect any separately-executed written
agreement addressing any other issues (e.g., the Inventions,
Improvements, Copyrights and Trade Secrets Agreement, etc.) or the
Retention Agreement by and between the Executive and the Company or the
Change in Control Agreement by and between the Executive and
Xxxxxxxxxxx.
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IN WITNESS WHEREOF, the Parties have signed this Agreement effective as
of the day and year first above written.
EXECUTIVE FORETHOUGHT FINANCIAL SERVICES, INC.
Signed: ______________________________ By: ________________________________
Printed: _____________________________ Title: _____________________________
Dated: _______________________________ Dated: _____________________________
CAUTION: READ BEFORE SIGNING
With respect to Section 13(d) and (e) of this Agreement only.
XXXXXXXXXXX INDUSTRIES, INC.
By: __________________________________
Title: _______________________________
Dated: _______________________________
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EXHIBIT A
SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION and RELEASE AGREEMENT ("Agreement") is entered into by
and between Xxxxxxx X. Xxxx ("Employee") and Forethought Financial Services,
Inc. ("Company"). To wit, the Parties agree as follows:
1. Employee's active employment by the Company shall terminate effective
[DATE OF TERMINATION] (Employee's "Effective Termination Date"). As of
that date, all Company benefits and obligations shall terminate. Except
as specifically provided by this Agreement, Employee agrees that the
Company shall have no other obligations or liabilities to him following
his Effective Termination Date and that his receipt of the Severance
Benefits provided herein shall constitute a complete settlement,
satisfaction and waiver of any and all claims he may have against the
Company.
2. In consideration of the promises contained in this Agreement and
contingent upon Employee's compliance with such promises, the Company
agrees to provide Employee the following:
(i) Severance pay, inclusive of any notice pay obligations, to be
paid at the bi-weekly rate of $_______, less applicable
deductions or other set-offs, for a period up to [WEEKS OF
SEPARATION] (___) weeks following the Employee's Effective
Termination Date or until Employee becomes employed again,
whichever first occurs;
(ii) Payment for any earned but unused vacation as of Employee's
Effective Termination Date; and
(iii) Life insurance coverage until the above-referenced Severance
Pay terminates.
3. The above Severance Pay Benefits shall be paid in accordance with the
Company's standard payroll practices (e.g. biweekly) and shall begin on
the first normally scheduled payroll following Employee's Effective
Termination Date or the effective date of this Agreement, whichever
occurs last. The Parties agree that the initial four (4) weeks of the
foregoing severance shall be allocated as additional consideration
provided to Employee in exchange for his execution of a release in
compliance with the Older Workers Benefit Protection Act. The balance
of the severance benefits shall be allocated as consideration for all
other promises and obligations undertaken by Employee, including
execution of a general release of claims.
4. As of the Effective Termination Date, Employee will become ineligible
to participate in the Company's health insurance program and
continuation of coverage requirements under COBRA (if any) will be
triggered at that time. However, as additional consideration for the
promises and obligations contained herein, and provided Employee timely
completes the applicable election of coverage forms, the Company
further agrees to pay the cost of such continued coverage under the
Company's health care program until the above-referenced Severance Pay
terminates. Thereafter, if applicable, coverage will be made available
to Employee at his sole expense for the remaining months of the COBRA
coverage period made available pursuant to applicable law. The medical
insurance provided herein does not include any disability coverage.
5. Employee agrees to notify the Company in writing within three (3)
business days of Employee's acceptance of any subsequent employment by
providing the name of such employer, his intended duties as well as the
anticipated start date. Such information is required to ensure
Employee's compliance with his non-compete obligations as well as all
other applicable restrictive covenants.
This notice will also serve to trigger the Company's right to terminate
the above-referenced severance benefits and Company-paid COBRA benefits
consistent with the above paragraphs. Failure to timely provide such
notice shall be deemed a material breach of this Agreement entitling
the Company to recover as damages the value of all benefits provided to
Employee hereunder.
6. In exchange for the foregoing Severance Benefits, Xxxxxxx X. Xxxx on
behalf of himself, his heirs, representatives, agents and assigns
hereby COVENANTS NOT TO XXX, RELEASES, INDEMNIFIES, HOLDS HARMLESS, and
FOREVER DISCHARGES (i) Forethought Financial Services, Inc., (ii) its
parent, subsidiary or affiliated entities, (iii) all of their present
or former directors, officers, employees, shareholders, and agents as
well as (iv) all predecessors, successors and assigns thereof from any
and all actions, charges, claims, demands, damages or liabilities of
any kind or character whatsoever, known or unknown, which Employee now
has or may have had through the effective date of this Agreement.
7. Without limiting the generality of the foregoing release, it shall
include: (i) all claims or potential claims arising under any federal,
state or local laws relating to the Parties' employment relationship,
including any claims Employee may have under the Civil Rights Acts of
1866 and 1964, as amended, 42 U.S.C. Sections 1981 and 2000(e) et seq.;
the Civil Rights Act of 1991; the Age Discrimination in Employment Act,
as amended, 29 U.S.C. Sections 621 et seq.; the Americans with
Disabilities Act of 1990, as amended, 42 U.S.C. Sections 12,101 et
seq.; the Fair Labor Standards Act 29 U.S.C. Sections 201 et seq.; the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections
2101, et seq.; and any other federal, state or local law governing the
Parties' employment relationship; (ii) any claims on account of,
arising out of or in any way connected with Employee's employment with
the Company or leaving of that employment; (iii) any claims alleged or
which could have been alleged in any charge or complaint against the
Company; (iv) any claims relating to the conduct of any employee,
officer, director, agent or other representative of the Company; (v)
any claims of discrimination, harassment or retaliation on any basis;
(vi) any claims arising from any legal restrictions on an employer's
right to separate its employees; (vii) any claims for personal injury,
compensatory or punitive damages or other forms of relief; and (viii)
all other causes of action sounding in contract, tort or other common
law basis, including (a) the breach of any alleged oral or written
contract, (b) negligent or intentional misrepresentations, (c) wrongful
discharge, (d) just cause dismissal, (e) defamation, (f) interference
with contract or business relationship or (g) negligent or intentional
infliction of emotional distress.
8. The Parties acknowledge that it is their mutual and specific intent
that the above waiver fully comply with the requirements of the Older
Workers Benefit Protection Act (29 U.S.C. Section 626) and any similar
law governing release of claims. Accordingly, Employee hereby
acknowledges that:
(a) He has carefully read and fully understands all of the
provisions of this Agreement and that he has entered into this
Agreement knowingly and voluntarily;
(b) The Severance Benefits offered in exchange for Employee's
release of claims exceed in kind and scope that to which he
would have otherwise been legally entitled;
(c) Prior to signing this Agreement, Employee had been advised,
and is being advised by this Agreement, to consult with an
attorney of his choice concerning its terms and conditions;
and
(d) He has been offered at least twenty-one (21) days within which
to review and consider this Agreement.
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9. The Parties agree that nothing contained herein shall purport to waive
or otherwise affect any of Employee's rights or claims that may arise
after he signs this Agreement.
10. The Parties agree that this Agreement shall not become effective and
enforceable until the date this Agreement is signed by both Parties or
seven (7) calendar days after its execution by Employee, whichever is
later. Employee may revoke this Agreement for any reason by providing
written notice of such intent to the Company within seven (7) days
after he has signed this Agreement, thereby forfeiting Employee's right
to receive any Severance Benefits provided hereunder and rendering this
Agreement null and void in its entirety.
11. The Parties agree that nothing contained herein shall purport to waive
or otherwise affect any of Employee's rights or claims that may arise
after he signs this Agreement. It is further understood by the Parties
that nothing in this Agreement shall affect any rights Employee may
have under any Pension Plan and/or Savings Plan (i.e., 401(k) plan)
provided by the Company as of the date of his termination, such items
to be governed exclusively by the terms of the applicable plan
documents.
12. Employee acknowledges that his termination and the Severance Benefits
offered hereunder were based on an individual determination and were
not offered in conjunction with any group termination or group
severance program and waives any claim to the contrary.
13. Employee hereby affirms and acknowledges his continued obligations to
comply with the post-termination covenants contained in his Employment
Agreement, including but not limited to, the non-compete, trade secret
and confidentiality provisions. Employee acknowledges that a copy of
the Employment Agreement has been attached to this Agreement as Exhibit
A or has otherwise been provided to him and, to the extent not
inconsistent with the terms of this Agreement or applicable law, the
terms thereof shall be incorporated herein by reference. Employee
acknowledges that the restrictions contained therein are valid and
reasonable in every respect and are necessary to protect the Company's
legitimate business interests. Employee hereby affirmatively waives any
claim or defense to the contrary.
14. Employee acknowledges that the Company possesses, and he has been
granted access to, certain trade secrets as well as other confidential
and proprietary information which the Company has acquired at great
effort and expense. Such information includes, without limitation,
confidential information regarding products and services, marketing
strategies, business plans, operations, costs, current or prospective
customer information (including customer contacts, requirements,
creditworthiness and like matters), product concepts, designs,
prototypes or specifications, regulatory compliance issues, research
and development efforts, technical data and know-how, sales
information, including pricing and other terms and conditions of sale,
financial information, internal procedures, techniques, forecasts,
methods, trade information, trade secrets, software programs, project
requirements, inventions, trademarks, trade names, and similar
information regarding the Companies' business (collectively referred to
herein as "Confidential Information").
15. Employee agrees that all such Confidential Information is and shall
remain the sole and exclusive property of the Company. Except as may be
expressly authorized by the Company in writing, or as may be required
by law after providing due notice thereof to the Company, Employee
agrees not to disclose, or cause any other person or entity to
disclose, any Confidential Information to any third party for as long
thereafter as such information remains confidential (or as limited by
applicable law) and agrees not to make use of any such Confidential
Information for Employee's own purposes or for the benefit of any other
entity or person.
- 3 -
16. On or before Employee's Effective Termination Date or per the Company's
request, Employee agrees to return the original and all copies of all
things in his possession or control relating to the Company or its
business, including but not limited to any and all contracts, reports,
memoranda, correspondence, manuals, forms, records, designs, budgets,
contact information or lists (including customer, vendor or supplier
lists), ledger sheets or other financial information, drawings, plans
(including, but not limited to, business, marketing and strategic
plans), personnel or other business files, computer hardware, software,
or access codes, door and file keys, identification, credit cards,
pager, phone, and any and all other physical, intellectual, or personal
property of any nature that he received, prepared, helped prepare, or
directed preparation of in connection with his employment with the
Company. Nothing contained herein shall be construed to require the
return of any non-confidential and de minimis items regarding
Employee's pay, benefits or other rights of employment such as pay
stubs, W-2 forms, 401(k) plan summaries, benefit statements, etc.
17. Employee hereby consents and authorizes the Company to deduct as an
offset from the above-referenced severance payments the value of any
Company property not returned or returned in a damaged condition as
well as any monies paid by the Company on Employee's behalf (e.g.,
payment of any outstanding American Express xxxx).
18. Employee agrees not to make any written or oral statement that may
defame, disparage or cast in a negative light so as to do harm to the
personal or professional reputation of (a) the Company, (b) its
employees, officers, directors or trustees or (c) the services and/or
products provided by the Company and its subsidiaries or affiliate
entities.
19. Employee specifically agrees and understands that the existence and
terms of this Agreement are strictly CONFIDENTIAL and that such
confidentiality is a material term of this Agreement. Accordingly,
except as required by law or unless authorized to do so by the Company
in writing, Employee agrees that he shall not communicate, display or
otherwise reveal any of the contents of this Agreement to anyone other
than his spouse, legal counsel or financial advisor provided, however,
that they are first advised of the confidential nature of this
Agreement and Employee obtains their agreement to be bound by the same.
The Company agrees that Employee may respond to legitimate inquiries
regarding the termination of his employment by stating that the Parties
have terminated their relationship on an amicable basis and that the
Parties have entered into a Confidential Separation and Release
Agreement which prohibits him from further discussing the specifics of
his separation. Nothing contained herein shall be construed to prevent
Employee from discussing or otherwise advising subsequent employers of
the existence of any obligations as set forth in his Employment
Agreement. Further, nothing contained herein shall be construed to
limit or otherwise restrict the Company's ability to disclose the terms
and conditions of this Agreement as may be required by business
necessity.
20. In the event that Employee breaches or threatens to breach any
provision of this Agreement, he agrees that the Company shall be
entitled to seek any and all equitable and legal relief provided by
law, specifically including immediate and permanent injunctive relief.
Employee hereby waives any claim that the Company has an adequate
remedy at law. In addition, and to the extent not prohibited by law,
Employee agrees that the Company shall be entitled to discontinue
providing any additional Severance Benefits upon such breach or
threatened breach as well as an award of all costs and attorneys' fees
incurred by the Company in any successful effort to enforce the terms
of this Agreement. Employee agrees that the foregoing relief shall not
be construed to limit or otherwise restrict the Company's ability to
pursue any other remedy provided by law, including the recovery of any
actual, compensatory or punitive damages. Moreover, if Employee pursues
any claims against the Company subject to the foregoing General
Release, or breaches the above Confidential provision, Employee agrees
to immediately reimburse the Company for the value of all benefits
received under this Agreement to the fullest extent permitted by law.
- 4 -
21. Employee acknowledges that this Agreement is entered into solely for
the purpose of terminating his employment relationship with the Company
on an amicable basis and shall not be construed as an admission of
liability or wrongdoing by the Company and further acknowledges that
the Company has expressly denied any such liability or wrongdoing.
22. Each of the promises and obligations shall be binding upon and shall
inure to the benefit of the heirs, executors, administrators, assigns
and successors in interest of each of the Parties.
23. The Parties agree that each and every paragraph, sentence, clause, term
and provision of this Agreement is severable and that, if any portion
of this Agreement should be deemed not enforceable for any reason, such
portion shall be stricken and the remaining portion or portions thereof
should continue to be enforced to the fullest extent permitted by
applicable law.
24. This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Indiana without regard to any applicable
state's choice of law provisions.
25. Employee represents and acknowledges that in signing this Agreement he
does not rely, and has not relied, upon any representation or statement
made by the Company or by any of the Company's employees, officers,
agents, stockholders, directors or attorneys with regard to the subject
matter, basis or effect of this Agreement other than those specifically
contained herein.
26. This Agreement represents the entire agreement between the Parties
concerning the subject matter hereof, shall supercede any and all prior
agreements which may otherwise exist between them concerning the
subject matter hereof (specifically excluding, however, the
post-termination obligations contained in any existing Employment
Agreement or other legally-binding document), and shall not be altered,
amended, modified or otherwise changed except by a writing executed by
both Parties.
PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.
IN WITNESS WHEREOF, the Parties have themselves signed, or caused a
duly authorized agent thereof to sign, this Agreement on their behalf and
thereby acknowledge their intent to be bound by its terms and conditions.
"EMPLOYEE" FORETHOUGHT FINANCIAL SERVICES, INC.
Signed: ______________________________ By: ________________________________
Printed: _____________________________ Title: _____________________________
Dated: _______________________________ Dated: _____________________________
- 5 -
