EXHIBIT 99.2
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT ("Agreement"), dated as of July 17, 2003, between
and among THE MIIX GROUP, INCORPORATED, a Delaware corporation ("MIIX Group"),
NEW JERSEY STATE MEDICAL UNDERWRITERS, INC., a New Jersey corporation
("Underwriter") (together, the "Company"), and XXXXX X. XXXXXXXX (the
"Employee").
WITNESSETH:
WHEREAS, MIIX Group is the parent company of Underwriter owning all of the
issued and outstanding common stock of Underwriter; and
WHEREAS, the Company deems it to be in its best interest to secure and
retain for the Company the services of the Employee and the Employee desires to
work for the Company upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
contained herein and intending to be legally bound hereby, the parties hereto
agree, as follows:
1. POSITION AND DUTIES. The Employee is engaged hereunder as Interim
Chief Financial Officer of MIIX Group and agrees to perform the duties and
services incident to that position, or such other or further duties and services
of a similar nature as may be required of him by the Chief Executive Officer of
MIIX Group. The Employee agrees that, if requested, he shall serve as an officer
of the Company and/or of any affiliate or another company for which Underwriter
is performing management services (including, without limitation, MIIX Advantage
Insurance Company of New Jersey ("MIIX Advantage")), without additional
compensation. The Employee shall have the power and authority as shall
reasonably be required to enable him to perform his duties under this Agreement
in an efficient manner. The Employee agrees to
perform the duties and responsibilities called for hereunder to the best of his
ability and to devote his full time, energies and skills to such duties and to
the promotion of the business and interests of the Company and any affiliate or
another company for which Underwriter is performing management services. The
Employee may participate in charitable and similar activities, may be a director
of a company that does not compete with the Company or any affiliate and may
have business interests in passive investments which, from time to time, may
require portions of his time, but such activities shall be performed in a manner
consistent with his obligations hereunder.
2. TERM OF EMPLOYMENT. The Company shall employ the Employee as Interim
Chief Financial Officer for a period of one year commencing July 17, 2003 and
ending July 17, 2004. Employee acknowledges that his position is temporary and
not permanent and that he has no right to remain and the Company has no
obligation to retain Employee in the employment of the Company after July 17,
2004.
3. COMPENSATION AND OTHER BENEFITS.
3.1. BASE SALARY. The Company shall pay to the Employee for the
performance of his duties hereunder, a base salary of $350,000 per annum (the
"Base Salary"), payable in accordance with the Company's normal payroll
practices, of which $48,000 shall be payable directly to the Employee and
$302,000 shall be payable to Altila Corporation.
3.2. CASH INCENTIVE BONUS . The Employee shall be eligible to receive
an annual cash bonus of up to $225,000 pursuant to MIIX Group's Cash Incentive
Plan and at the discretion of the Board of Directors of MIIX Group, based on the
Company's and the Employee's achievement of specific defined goals and
objectives. The Employee will participate in the Cash Incentive Plan on the same
basis as similarly situated executive employees; based upon last
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year's weightings, attainment of personal goals shall determine 50% of the cash
incentive bonus and attainment of corporate goals shall determine the remaining
50% of the cash incentive bonus.
The Board shall use its reasonable judgment in determining whether such
goals and objectives have been met and the amount, if any, of the bonus to be
paid to the Employee. It is anticipated that any bonus will be paid on or before
August 31, 2004.
3.3. TRANSACTION BONUS . The Employee shall also be entitled to
receive a transaction bonus upon the consummation of a transaction involving
either a major capital infusion into MIIX Group in excess of $10 million or a
sale or merger of MIIX Group in exchange for consideration in excess of the
surplus of MIIX Insurance Company as stated at June 30, 2003, provided that
either such transaction is initiated during the term of the Employee's
employment under this Agreement and closed no later than six months thereafter.
The transaction bonus the Employee will be entit led to receive upon the
consummation of such a transaction shall be: (a) in the case of a capital
infusion into MIIX Group, $17,500 for each $1 million in capital raised above
$10 million, up to a maximum of $350,000; and (b) in the case of a sale or
merger of MIIX Group, $350,000 in the event of a sale or merger for
consideration of the amount above $46.5 million, the MIIX Group's estimated net
book value at June 30, 2003. In the event of the consummation of a transaction
or transactions involving both a capital infusion into and the sale or merger of
MIIX Group the Employee shall receive only one transaction bonus which shall be
the greater of the two applicable bonuses. Payment of a transaction bonus to the
Employee shall be at the discretion of the Board of Directors of MIIX Group;
provided, however, that if a transaction for which the Employee would be
eligible to receive a transaction bonus results in a Change in Control as
defined in the MIIX Group
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Employee Retention Incentive Plan, effective March 5, 2002, the transaction
bonus shall be paid to the Employee.
3.4. EMPLOYEE BENEFITS. During the term of this Agreement, the
Employee shall be entitled to participate in all of the benefit programs
provided to similar employees of the Company, including, without limitation, all
medical, disability, dental and life insurance benefits, retirement programs,
automobile expense reimbursement programs and other employee benefit programs
now in existence or hereafter adopted by the Company, as such plans, programs,
practices or policies may be in effect from time to time.
3.5. VACATION. In addition to such holidays, sick leave and other paid
time off as established by the Company, the Employee shall be entitled to 25
days vacatio n time in accordance with the Company's Paid Time Off policy
applicable to executives, as in effect from time to time, during which his
compensation shall be paid, provided, however, that the Employee may not take
more than two consecutive weeks of vacatio n without the prior approval of the
Chief Executive Officer of MIIX Group. Unused vacation time remaining at the end
of the term of this Agreement will be paid to the Employee and shall be prorated
according to Base Salary.
3.6. REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable expenses incurred by the Employee in connection with
his employment hereunder, provided, however, that such expenses were incurred in
conformance with the policies of the Company, as established from time to time,
and the Employee submits detailed vouchers and other records reasonably required
by the Company in support of the amount and nature of such expenses.
Notwithstanding the foregoing, the Employee will be entitled toreimbursement for
local lodging expenses at the location and at the preferred rate
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agreed to by the Company and for coach airfare expenses for weekend travel
between the Company's offices and the Employee's permanent residence.
3.7. TAXES AND WITHHOLDING. All compensation payable and other
benefits provided under this Agreement shall be subject to customary withholding
for income, F.I.C.A. and other employment taxes.
4. TERMINATION OF EMPLOYMENT.
4.1. DEATH OF THE EMPLOYEE. The Employee's employment under this
Agreement shall terminate immediately upon the Employee's death and the
Employee's estate (or his beneficiary as may be appropriate) shall be entitled
to receive:
(a) the balance of his accrued and unpaid Base Salary through
the date of his death,
(b) unreimbursed authorized expenses incurred as of the date of
his death,
(c) unused accrued vacation time through the date of his death,
and
(d) any other benefits earned by the Employee and vested (if
applicable) as of the date of his death under any employee benefit plan of MIIX
Group or its affiliates in which the Employee participates.
4.2. DISABILITY OF EMPLOYEE. If the Employee, in the reasonable
opinion of the Company, is unable to perform his duties under this Agreement by
reason of incapacity, either physical or mental, as determined in accordance
with the MIIX Group of Companies Long Term Disability Group Benefit Plan (the
"LTD Plan"), or similar plan which may be in effect from time to time, the
Company shall have the right to terminate the Employee's employment upon written
notice to the Employee, whereupon such termination shall be effective as of the
date
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specified in such notice (the "Termination Date") and the Company shall have no
further obligations under this Agreement, except that the Employee shall be
entitled to receive:
(a) the balance of his accrued and unpaid Base Salary through
the Termination Date,
(b) unreimbursed authorized expenses incurred as of the
Termination Date,
(c) unused, accrued vacation time through the Termination Date,
and
(d) any other benefits earned by the Employee and vested (if
applicable) as of the Termination Date under any employee benefit plan of
the Company or its affiliates in which the Employee participates.
4.3. TERMINATION FOR CAUSE.
1. For purposes of this Agreement, "for cause" shall mean the termination
of the Employee's employment with the Company as a result of any of the
following:
(a) the willful engaging by the Employee in conduct which is
materially injurious to or contrary to the bests interests of the Company,
monetarily or otherwise;
(b) the willful failure by the Employee to perform such duties
as may be delegated or assigned to the Employee by the Chief Executive
Officer of MIIX Group;
(c) the willful failure by the Employee to follow the directives
or instructions of the Chief Executive Officer of MIIX Group;
(d) the repeated and consistent failure of the Employee to be
present at work and devote his full time best efforts to the performance of
his duties under this Agreement, except as set forth above in connection
with the Employee's disability;
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(e) gross negligence in the performance of his duties on behalf
of the Company;
(f) the Employee's conviction of, or plea of no contest to, a
felony or any crime involving moral turpitude; or
(g) the commission by the Employee of an act, or the omission of
an act, that would constitute a material breach of this Agreement.
2. The Employee's employment under this Agreement shall terminate
immediately upon written notice from the Company that the Company is terminating
the Employee for cause. Upon the Company's termination of the Employee's
employment for cause, the Employee shall be entitled to receive:
(a) the balance of his accrued and unpaid Base Salary through
the Termination Date,
(b) unreimbursed authorized expenses incurred as of the
Terminate Date,
(c) unused, accrued vacation time through the Termination Date,
and
(d) any other benefits earned by the Employee and vested (if
applicable) as of the Termination Date under any employee benefit plan of
the Company or any affiliate in which the Employee participates.
4.4. TERMINATION WITHOUT CAUSE. In the event that the Company
terminates the Employee's employment without cause prior to the end of the term
of this Agreement upon written notice to the Employee specifying the date of
termination, the Employee shall be entitled to receive:
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(a) the balance of his accrued and unpaid Base Salary through
the Termination Date,
(b) unreimbursed authorized expenses incurred as of the
Termination Date,
(c) unused, accrued vacation time through the Termination Date,
(d) any other benefits earned by the Employee and vested (if
applicable) as of the Termination Date under any employee benefit plan of
the Company or any affiliate in which the Employee participates,
(e) coverage for the Employee and his dependents (if applicable)
under the standard health benefit plan of the Company in which the Employee
participates through the end of the term of this Agreement,
(f) the prorated portion of any cash bonus earned in accordance
with Section 3.2 through the Termination Date, and
(g) Base Salary, paid in accordance with the Company's normal
payroll practices, through the end of the term of this Agreement, less any
compensation or fees earned by the Employee (either directly or for
services performed through his company) during that period of time.
4.5. RESIGNATIONS FROM POSITIONS . The Employee specifically agrees
that upon his termination of employment with the Company, whether voluntary or
involuntary, his position as an officer or as a member of the Board of Directors
of the Company, any affiliate or another company for which Underwriter is
performing management services shall cease and this Agreement shall constitute
notice of the Employee's resignation in such regard.
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5. SOLICITATION OF COMPANY EMPLOYEES. For the period of one year after
the termination of the Employee's employment with the Company or any affiliate
or another company for which Underwriter is performing management services,
whether voluntary or involuntary, the Employee shall not, directly or
indirectly, hire, retain or engage as a director, officer, employee, agent,
consultant, advisor or in any other capacity any person or persons who are
employed by the Company or any affiliate or another company for which
Underwriter is performing management services or who were at any time within a
period of six months immediately prior to the Termination Date employed by the
Company or any affiliate or another company for which Underwriter is performing
management services or otherwise interfere with the relationship between such
persons and the Company or its affiliates or another company for which
Underwriter is performing management services, without the express written
consent of the Company.
6. CONFIDENTIALITY.
6.1. DEFINITION OF "CONFIDENTIAL INFORMATION". For the purposes of
this Agreement, "Confidential Information" shall mean all information about the
Company or any affiliate or another company for which Underwriter is performing
management services relating to any of their products or services or any phase
of their operations, including, without limitation, business plans and
strategies, trade secrets, marketing and distribution information, bus iness
results, underwriting information and methods, identities of insureds and claims
defense and recovery methods and procedures not generally known through
legitimate means to any of its competitors, with which the Employee becomes
acquainted during the term of his employment.
6.2. CONFIDENTIAL TREATMENT. During the time of employment, or at any
time thereafter, the Employee shall not disclose or make available to any person
or entity any
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Confidential Information without the express prior written authorization of the
Company. All records, files, materials and Confidential Information obtained by
the Employee in the course of his employment with the Company are confidential
and proprietary and shall remain the exclusive property of the Company or its
affiliates, as the case may be. Upon the termination of the Employee's
employment with the Company or any affiliate, or at any time upon the request of
the Company, the Employee (or his heirs or personal representatives, as
applicable) shall deliver to the Company all documents and materials containing
Confidential Information relating to the business or affairs of the Company or
its affiliates or another company for which Underwriter is performing management
services, or their customers or clients, and all other documents, materials and
other property belonging to the Company or its affiliates or another company for
which Underwriter is performing management services, or their customers or
clients that are in the possession or under the control of the Employee.
7. REMEDIES. The parties acknowledge and agree that any breach by the
Employee of Sections 5 or 6 of this Agreement cannot be reasonably or adequately
compensated for by damages, and that the Company shall be entitled to equitable
relief by way of injunction or otherwise. In the event that the Employee
breaches any of the provisions of this Agreement, the Company also shall be
entitled to cease all payments and benefits under the terms of this Agreement
and shall be entitled to pursue all remedies which the Company might have
including, but not limited to, those contained in this Agreement.
8. SEVERABILITY. The terms of this Agreement and each Paragraph and
Section hereof shall be considered severable and the invalidity or
unenforceability of any part thereof shall not affect the validity or
enforceability of the remaining portions or provisions hereof.
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9. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient, if in writing and delivered by mail or overnight
delivery service, to his mailing address, in the case of the Employee or to its
principal office in the case of the Company.
10. ASSIGNMENT. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon its successors and
assigns. Neither this Agreement nor any rights or interests herein or created
hereby may be assigned or otherwise transferred voluntarily or involuntarily by
the Employee. 11. WAIVER. The waiver by the Company or the Employee of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach.
12. APPLICABLE LAW. This Agreement shall be interpreted and construed
under the laws of the State of New Jersey without reference to principles of
conflicts of laws.
13. JURISDICTION. Employee and the Company agree to submit to the
jurisdiction of the federal and state courts in New Jersey for purposes of the
enforcement of or any dispute concerning this Agreement and that any proceeding
to enforce or involving any dispute concerning this Agreement shall be brought
exclusively in the federal or state courts in New Jersey.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements with respect to the subject matter hereof. This
Agreement may not be changed, altered or amended except by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
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15. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE MIIX GROUP, INCORPORATED
By: /s/ Xxxxxxxx X. Xxxxxxxx
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NEW JERSEY STATE MEDICAL
UNDERWRITERS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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_____________________________________
XXXXX X. XXXXXXXX
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