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Exhibit 10(v)
AGREEMENT
AGREEMENT made as of March 9, 1994, as amended and restated as of March
17, 1995, by and between EMPHESYS FINANCIAL GROUP, INC. (hereinafter called "the
Company"), a Delaware corporation having its principal place of business in
Green Bay, Wisconsin, and Xxxxxxx X. Xxxx (hereinafter called "Employee"):
WITNESSETH:
WHEREAS, Employee desires to render faithful and efficient service to
the Company; and
WHEREAS, the Company desires to receive the benefit of Employee's
service; and
WHEREAS, Employee is willing to be employed by the Company; and
WHEREAS, the Company deems it essential to formalize the conditions of
Employee's employment by written agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
1. Office. The Company hereby employs Employee and as a President and
Chief Operating Officer; and Employee hereby agrees to serve the
Company in such capacity.
2. Term of Employment. Employee's employment shall be for the
"Employment Period," with the initial term commencing at Closing
Date of the Initial Public Offering, and extending to the third
anniversary of such Closing Date. The initial term shall be
automatically renewed and extended upon the expiration thereof for
successive periods of one (1) year until such time as the
Employment Period shall terminate pursuant to the terms of this
Agreement, or until the Company on the one hand, or Employee on
the other hand, shall terminate the Employment Period by giving
written notice to the other party on or before 60 days last
preceding the date upon which this Agreement would otherwise be
renewed and extended, whichever date of termination shall first
occur. If the remaining term of this Agreement is less than one
year on the
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date of a Change in Control (as hereinafter defined), such term
shall automatically be extended, effective on the date of such
Change in Control. The renewal and extension of this Agreement
shall also be referred to as the "Employment Period."
3. Incapacity. If during the employment Period, Employee should be
prevented from performing his duties or fulfilling his
responsibilities by reason of any incapacity or disability for a
continuous period of six (6) months then the Company, in its sole
and absolute discretion, may, based on the opinion of a qualified
physician, consider such incapacity or disability to be total and
may on ninety (90) days written notice to Employee terminate the
Employment Period. Benefits and payments shall be made under this
Agreement following incapacity as if it were a termination without
Good Cause in accordance with paragraph 9(a) or (b), as
applicable.
4. Death. The Employment Period shall automatically terminate upon
the death of Employee, and payments will be made to the Employee's
estate as if it was a termination without Good Cause in accordance
with paragraph 9(a) or (b), as applicable.
5. Responsibilities. During the Employment Period, Employee shall
devote his entire business time and attention, except during
reasonable vacation periods, to, and exert his best efforts to
promote, the affairs of the Company, and shall render such
services to the Company as may be required by the Board of
Directors of the Company consistent with services be required by
virtue of the office set forth in paragraph 1 hereof and shall
perform such other services as may now or hereafter be specified
or enumerated in the By-Laws of the Company consistent with such
office. Nothing herein contained shall preclude service by
Employee on boards of directors or trustees of other entities not
engaged in any business competitive with the business of the
Company.
6. Compensation. During the Employment Period, Employee shall receive
a base salary that shall be at an annual rate of not less than
$250,000, payable in accordance with the payroll practices of the
Company as from time to time in effect with regard to executive
personnel, plus, commencing with January 1, 1995, any annual
increase to such salary as determined by the Company.
7. Benefit Plans and Programs. During the Employment Period, Employee
shall
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be eligible for participation in all benefit plans and programs,
including those for executive employees, made available by the
Company to its respective employees.
8. Stock Options and Restricted Stock Awards. Among the benefit plans
and programs made available by the Company to certain of its
employees is the Company's 1994 Stock Incentive Plan. Effective on
the Closing Date, Employee shall be awarded stock options to
purchase, at the Initial Offering Price, 25,000 shares of the
Company's Stock. Such Option Agreement shall have the terms and
conditions set forth in the Nonqualified Stock Option Agreement
dated March 21, 1994 by and between the Company and Employee, as
such agreement may be amended from time to time (the "Option
Agreement"). Employee shall also be awarded a restricted stock
award of 25,893 shares with terms and conditions set forth in the
Restricted Stock Award Agreement and Stock Power dated March 21,
1994 by and between the Company and Employee, as such agreement
may be amended from time to time (the "Restricted Stock
Agreement").
9. Severance Payments.
(a) Subject to paragraph 9(b), in the event that (i) Employee's
employment is terminated by the Company while this Agreement
is in effect without Good Cause, (ii) the Employment Period
is terminated by reason incapacity or disability in
accordance with paragraph 3 or (iii) the employment period is
terminated by reason of death in accordance with paragraph 4:
(1) With respect to subparagraphs 9(a), (i), (ii) and (iii),
the Company shall pay to Employee, no later than ten
calendar days after the effective date of such
termination of employment or date of death, as the case
may be (the "Termination Date"), an amount equal to his
then current annual base salary accrued through the
Termination Date, his bonus for the most recently
completed fiscal year prorated for the current fiscal
year through the Termination Date plus one times the sum
of his then current annual base salary and bonus
(without proration) for the most recently completed
fiscal year, and the Company shall continue to keep in
full force and effect all plans or policies of medical,
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accident and life insurance benefits with respect to
Employee and his dependents with the same level of
coverage available to employees under the terms of those
employee benefit plans for a period of twelve months,
upon the same terms, costs and otherwise to the same
extent as such plans are in effect for employees of the
Company who were similarly situated to Employee as of
the Termination Date, in addition to any amounts payable
to the Employee under any severance pay plan maintained
by the Company for its employees;
(2) With respect to subparagraphs 9(a) (i) and (ii), to the
extent restricted shares awarded to him as provided in
paragraph 8 of this Agreement do not become fully vested
and nonforfeitable as of the Termination Date in
accordance with paragraph 5 of the Restricted Stock
Agreement, such restricted shares shall become fully
vested and non-forfeitable as of the Termination Date;
provided, that with respect to subparagraph 9(a) (iii),
such restricted shares shall become vested and non-
forfeitable in accordance with paragraph 5 of the
Restricted Stock Agreement; and
(3) With respect to subparagraphs 9(a) (i) and (ii), to the
extent options granted to him under paragraph 8 of this
Agreement do not become fully vested and exercisable as
of the Termination Date in accordance with paragraph 2
of the Option Agreement, such options shall become
vested and exercisable for three months commencing on
the Termination Date; provided, that with respect to
subparagraph 9(a) (iii), such options shall become
vested and exercisable in accordance with paragraph 2 of
the Option Agreement.
(b) (i) In the event that Employee's employment is terminated by
the Company while this Agreement is in effect within two
years following a Change in Control (as hereinafter defined)
with or without Good Cause or (ii) if Employee terminates his
own employment within 6 months after a 25% or more reduction
in his base annual salary or of the board significantly
reducing his responsibilities and removing his title as
President and Chief Operating Officer (other than in
anticipation
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of Employee's retirement):
(1) With respect to subparagraphs 9(b) (i) and (ii), the
Company shall pay to Employee, no later than ten days
after the Termination Date, an amount equal to his then
current annual base salary accrued through the
Termination Date, his bonus for the most recently
completed fiscal year prorated for the current fiscal
year through the Termination Date plus one and one half
times the sum of his then current annual base salary and
bonus for the most recently completed fiscal year
(without proration) and the Company shall continue to
keep in full force and effect all plans or policies of
medical, accident and life insurance benefits with
respect to Employee and his dependents with the same
level of coverage available to employees under the terms
of those employee benefit plans for a period of eighteen
months, upon the same terms, costs and otherwise to the
same extent as such plans are in effect for employees of
the Company who were similarly situated to Employee as
of the Termination Date, in addition to any amounts
payable to the Employee under any severance pay plan
maintained by the Company for its employees;
(2) With respect to subparagraph 9(b) (ii), all restricted
shares awarded to him as provided in paragraph 8 of this
Agreement shall become fully vested and non-forfeitable
as of the Termination Date; provided, that with respect
to subparagraph 9(b) (i), such restricted shares shall
become vested and non-forfeitable in accordance with
paragraph 5 of the Restricted Stock Agreement; and
(3) With respect to subparagraph 9(b) (ii), all options
granted to him under paragraph 8 of this Agreement shall
become vested and exercisable for three months
commencing on the Termination Date; provided, that with
respect to subparagraph 9(b) (i), such options shall
become vested and exercisable in accordance with
paragraph 2 of the Option Agreement.
(c) Subject to paragraph 9(b), in the event that Employee's
employment is
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terminated by the Company with Good Cause:
(1) the Company shall pay to Employee, no later than ten
days after the Termination Date, an amount equal to his
then current annual base salary accrued through the
Termination Date;
(2) all restricted shares awarded to him as provided in
paragraph 8 of this Agreement shall become fully vested
and non-forfeitable as of the Termination Date; and
(3) all options granted to him under paragraph 8 of this
Agreement shall become vested and exercisable for three
months commencing on the Termination Date.
(d) Good Cause means the Board of Directors of the Company has
determined in good faith, without being bound by the
Company's progressive discipline policy for employees,
(1) that Employee has engaged in acts or omissions against
the Company or any of its subsidiaries constituting
dishonesty, intentional breach of fiduciary obligation
or intentional wrongdoing or misfeasance;
(2) that Employee has been arrested or indicted in a
possible criminal violation involving fraud or
dishonesty;
(3) after due consideration and with notice to the Employee,
that Employee has performed poorly;
(4) that Employee has failed or refused to perform his
duties set forth in paragraph 5 hereof, or willfully
failed to execute any reasonable instruction relating to
his duties with the Company given him by the Chief
Executive Officer of the Company if either such failure
or refusal is not corrected within ten business days
after his receipt of written notification of such
failure or refusal; or
(5) that Employee has intentionally and in bad faith acted
in a
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manner which results in a material detriment to the
assets, business or prospects of the Company or any of
its subsidiaries.
(e) A "Change in Control" shall be deemed to have occurred if,
during, or following the consummation of, a stock purchase
program, tender offer, exchange offer, merger, consolidation,
sale of assets, contested election, or any combination of the
foregoing transactions, any person, entity, or group of
persons acting in concert, directly or indirectly, (i)
acquires ownership of the power to vote in excess of 40% of
the voting securities of EFG and one or more of its
representatives are elected to the Board, (ii) acquires
ownership of the power to vote in excess of 50% of the voting
power of EFG, or (iii) otherwise acquires effective control
of the business and affairs of EFG; provided however, that an
acquisition of shares pursuant to the sale or transfer of any
interest in EFG by Lincoln National Corporation, any of its
subsidiaries or affiliates, to a subsidiary or affiliate
shall not be used to compute the percentage ownership for
purposes of defining Change in Control, nor shall such
transfer to an unrelated third party be used in computing the
40% percentage ownership of (i).
In addition to the arrangements made pursuant to this
paragraph 9
(1) if on the Termination Date, following termination for
any reason, Employee shall not be fully vested in the
employer matching contributions made on his behalf under
the Company's profit sharing plan, the Company shall pay
to Employee within 30 days following the Termination
Date a lump sum cash amount equal to the value of the
unvested portion of such employer matching
contributions; provided, however, that if any payment
pursuant to this paragraph (9) (d) may or would result
in such payment being deemed a transaction which is
subject to Section 16(b) of the Securities Exchange Act
of 1934, as amended, the Company shall make such payment
so as to meet the conditions for an exemption from such
Section 16(b) as set forth in the rules (and
interpretive and no-action letters relating thereto)
under Section 16. The value of any such unvested
employer matching contributions shall be determined as
of the Termination Date.
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(2) All options granted to Employee under paragraph 8 of
this Agreement shall, to the extent not then vested and
exercisable, become vested and exercisable for three
months commencing on the Termination Date.
(f) Notwithstanding anything herein to the contrary, in the event
Employee's employment is terminated and Employee is not
entitled to any benefit or severance payment in accordance
with (A) the last sentence of paragraph 3 or (B) paragraph 4,
9(a), 9(b) or 9(c), Employee shall not be entitled to any
benefit or severance payment under paragraph 9, except (x) as
set forth in paragraph 9(e) and (y) the Company shall pay to
Employee an amount equal to his then current annual base
salary accrued through the Termination Date.
10. Expenses. During the Employment Period the Company shall allow
Employee his reasonable expense of travel and business
entertainment incurred in the performance of his duties hereunder,
subject to the rules and regulations adopted by the Company for
the handling of such business expenses.
11. Restrictive Covenants. Employee shall not during the Employment
Period, directly or indirectly, alone or as a member of a
partnership or association, or as an officer, director, advisor,
consultant, agent or employee of any other company, be engaged in
or concerned with any other duties or pursuits requiring his
personal services except with the prior written consent of the
Board of Directors of the Company. Nothing herein contained shall
preclude the ownership by Employee of stocks or other investment
securities. Nothing herein contained shall preclude service by
Employee on boards of directors or trustees of other entities not
engaged in any business competitive with the business of the
Company.
12. Trade Secrets and Non-compete. (a) Employee acknowledges that as a
result of his employment by the Company, he may develop, obtain or
learn about specific confidential information or trade secrets
which are the property of the Company. Employee hereby covenants
and agrees to use his best efforts and the utmost diligence to
guard and protect such confidential information and trade secrets
and that he will not, without the prior written consent of the
Company, as the case may be or, for a period of two (2) years
following the Termination Date use for himself or others or
disclose or permit to be
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disclosed to any third party by any method whatsoever any such
confidential information or trade secret, unless disclosure is
required by law, regulation or order of any court or regulatory
commission, department or agency. For purposes of this paragraph,
confidential information or trade secrets shall include, but not
be limited to, any and all records, notes, memoranda, data, ideas,
processes, methods, devices, programs, computer software,
writings, research, personnel information, customer information,
financial information, plans or any information of whatever
nature, in the possession or control of the Company which give to
the Company an opportunity to obtain an advantage over competitors
who do not know or use it.
(b) Employee further covenants that for a period of two years
after ceasing employment with the Company, he shall not:
(i) Interfere with the relationship of the Company and any
employee, agent or representative.
(ii) Divert or attempt to cause the diversion from the Company any
business with which the Company has been actively engaged in
during the past two years nor interfere with relationships of
the Company with policyholders, dealers, distributors,
marketers, sources of supply, or customers.
Employee further specifically acknowledges that the geographic
area to which the covenants contained in 12(b) (i) and 12(b) (ii)
apply is the same geographic area in which he performed services
for the Company the past two years. In the event that Employee is
terminated without Good Cause, Employee will not be subject to the
covenants contained in 12(b) (i) and 12(b) (ii) above.
13. Grounds for Termination of Employment. The Company may terminate
the Employment Period by written notice to Employee, specifying
the ground or grounds for such termination, if any, but should the
Employee's termination be without Good Cause, the provisions of
Section 5, 11 and the noncompete provisions of Section 12(b) (i)
and 12(b) (ii) of this Agreement will not be applicable.
14. Effect of Termination of the Employment Period. Upon the
termination of the Employment Period, this Agreement shall
terminate, and all of the parties'
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obligations hereunder shall forthwith terminate, except that
rights and remedies accruing prior to such termination or arising
out of this Agreement shall survive.
15. Notice. Any notice required to be given by the Company hereunder
to Employee shall be in proper form and signed by an officer or
Director of the Company. Until one party shall advise the other in
writing to the contrary, notices shall be deemed delivered:
(a) to the Company if delivered to the Secretary of the Board of
EMPHESYS FINANCIAL GROUP, INC., or, if mailed, certified or
registered mail, postage prepaid, at 0000 Xxxxxxxxx Xxxx.,
Xxxxx Xxx, XX 00000, and
(b) to Employee if delivered to Employee, or if mailed to him,
certified or registered mail, postage prepaid, at 0000
Xxxxxxx Xxxxx, Xxxxx Xxx, XX 00000.
16. Alternative Dispute Resolution. Any controversy, dispute or
questions arising out of, in connection with or in relation to
this Agreement or its interpretation, performance or
nonperformance or any breach thereof shall be resolved through
mediation. In the event mediation fails to resolve the dispute
within 60 days after a mediator has been agreed upon or such other
longer period as may be agreed to by the parties, such
controversy, dispute or question shall be settled by arbitration
in accordance with the Center for Public Resources Rules for Non-
Administered Arbitration of Business Disputes, by a sole
arbitrator. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Sec. 1-16, and judgment upon the award
rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The place of the arbitration shall be Green
Bay, Wisconsin. In any such controversy or dispute, regardless of
the party by whom such controversy or dispute is initiated, the
Company shall, if written notice is given and upon presentation of
appropriate vouchers, pay all legal expenses, including reasonable
attorneys' fees, court costs and ordinary and necessary
out-of-pocket costs of attorneys, billed to an payable by the
Employee in connection with the bringing, prosecuting, defending,
litigating, negotiating, or settling such controversy or dispute;
provided, however, that such expenses, fees and costs shall not be
paid by the Company unless and until the Employee is successful on
the
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merits; further provided, however, that in the event such
controversy or dispute is settled, the settlement agreement shall
provide for the allocation of such expenses, fees and costs
between the parties.
17. Benefit. This Agreement shall bind and inure to the benefit of the
Company and the Employee, their respective heirs, successors and
assigns.
18. Conditions. This Agreement, as amended and restated, shall become
effective upon approval by Compensation Committee of the Board of
Directors.
19. Effect on Previous Agreements. Should this Agreement, as amended
and restated, become effective, it will supersede all employment
related agreements between Employee and the Company or any member
of the Lincoln National Corporation controlled group of companies.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Attest: EMPHESYS FINANCIAL GROUP, INC.
/s/ DOLLY WILLEM By: /s/ XXXXXXX X. XXXXXX
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Dolly Willem Xxxxxxx X. Xxxxxx
Signed, sealed and delivered
in the presence of:
/s/ Merrill, Lynch, Xxxxxx,
Xxxxxx & Xxxxx, Inc. /s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
