EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") , dated as of October 28, 1988, is by
and between Chandler (U.S.A.), Inc., an Oklahoma corporation ("Employer"), and
W. Xxxxx XxXxxx ("Employee"). Xxxxxxxx Insurance Company, Ltd., a Cayman Islands
corporation ("Chandler"), hereby joins for the limited purposes specified
herein. For all purposes of this document, "affiliates" shall mean persons or
entities that directly, or indirectly through one or more intermediaries,
control or are controlled by, or are under common control with, Employer.
W I T N E S S E T H:
WHEREAS, Employee desires to enter into the employment of Employer, and
Employer desires to employ Employee provided that, in so doing, it can protect
its confidential information, business, accounts, patronage and good will;
NOW, THEREFORE, in consideration of the foregoing recital and of the
mutual covenants set forth below, the parties hereto agree as follows:
1. COMPENSATION AND EMPLOYMENT. Employee agrees to enter into the
employment of Employer, and Employer agrees to employ Employee, on the terms and
conditions set forth below.
(a) Employer shall pay to Employee, and Employee agrees to
accept as full consideration for his employment, not less than $250,000 per year
during the term of this Agreement, payable in equal monthly installments,
subject to all appropriate withholdings. All compensation payable to Employee
hereunder shall be payable by Employer or by any entity designated by Employer.
Employee's base salary shall be increased on or before March 31 of each year in
an amount proportionate to any increase from base year 1988 in the Consumer
Price Index All Items for All Urban Consumers, as determined by the United
States Department of Labor, Bureau of Labor Statistics, plus any additional
amount deemed appropriate by Employer's Board of Directors.
(b) in addition to the compensation above set forth, Employee
shall be entitled to reimbursement of his actual out-of-pocket expenses incurred
in the conduct of Employer's business, which shall be limited to ordinary and
necessary items and which shall be supported by voucher, receipts or similar
documentation to the extent practicable.
(c) Employee shall be entitled to paid vacations per year as
established by Employer from time to time under a policy based on seniority and
such other fringe benefits as the Board of Directors of Employer may, in its
sole discretion, determine, including the following:
(1) Group Life, group hospitalization and group
accident and major medical benefits for Employee and
all members of Employee's immediate family providing
benefits comparable to those provided to other
employees of Employer. In any case, Employee will be
expected to make contributions toward the cost of
such plans at the same rate and in the same manner as
required by other employees of like status
participating therein.
(2) The use of a company-owned automobile,
appropriate for Employee's position, not more than
two years of age, together with all oil, gasoline,
repairs, insurance and maintenance required for the
use and operation of the same for business purposes.
(3) Employer shall use its best efforts to procure
long-term disability insurance covering Employee to
age 65, which together with corporate payments and
programs would provide Employee 60% of Employee's
base salary to age 65. Disability of Employee shall
be subject to such other definitions (including the
definition of disability in the insurance policy),
exclusions and exceptions are as normal to such
insurance. Employee will take such physical
examination, and execute such forms as may be
reasonably required to obtain such insurance if such
insurance can be obtained at a reasonable cost, and
Employer shall bear the full cost thereof during the
term of this Agreement.
(d) Employee agrees during the term of Employee's employment
to devote 100% of his full business time and Employee's best
efforts, skills and abilities to the performance of Employee's
duties as stated in this Agreement and to the furtherance of
Employer's business and any of its affiliates' businesses.
(e) Employer intends that it or its affiliates will establish
an executive incentive compensation plan, which shall be a
plan approved by the Board of Directors which establishes a
profit level at which officers and other key employees shall
begin to receive incentive awards under the terms of the plan.
However, the Board can set a different goal, by resolution,
when desired. It is deemed desirable that the Board approve a
plan by March of each year. In each case, no modifications of
the business plan shall occur for purposes of this Agreement
after approved by the Board in any year except that any such
plan shall be deemed automatically changed to take into
account the financial effects of federal or state tax or other
law changes adopted after final approval of such plan by the
Board. All awards payable hereunder shall be subject to
applicable deductions for Social Security and withholding
taxes.
(f) Employee's job title shall be Chairman of the Board and
Chief Executive Officer of LaGere & Xxxxxxxxxxxx Insurance
Agency, Inc., a wholly owned subsidiary of Employer, and of
Xxxxxxxx and such other titles for Employer or affiliates as
the Board of Directors of Employer may from time to time
prescribe, and
Employee's duties shall consist of performing such services
for Employer as may be directed from time to time by the Board
of Directors of Employer or its affiliates.
(g) Employee shall also use Employee's best efforts to
preserve the business of Employer and the good will of all
employees, customers, suppliers and other persons having
business relations with Employer.
2. TERM.
(a) The employment of Employee shall begin on the date of this
Agreement and shall continue until the earliest of (i) the date Employer
terminates it for just cause (defined below) upon three days written notice,
specifying the reasons therefor and allowing Employee a reasonable opportunity
to respond, (ii) the death of Employee, or (iii) a termination date (defined
below).
(b) For purposes of this Agreement, "just cause" for
termination shall include:
(1) the failure or inability of Employee, for any
reason other than disability, to devote 100% of Employee's full business time to
Employer's business and its affiliates' businesses,
(2) absence from full-time duties for a period of at
least six months due to permanent or temporary disability, which shall mean any
physical or mental disability, including disability resulting from the use of
alcohol or drugs, rendering Employee unable to perform substantially all of
Employee's usual duties and responsibilities,
(3) the commission by Employee of any act involving
moral turpitude or the commission by Employee of any felony or any other act or
the suffering by Employee of any occurrence or state of facts, which renders
Employee incapable of performing Employee's duties under this Agreement, or
adversely affects or could reasonably be expected to affect adversely Employer's
business reputation,
(4) any material breach by Employee of any of the
terms of, or the failure to substantially perform any covenant contained in,
this Agreement,
(5) the violation by Employee of instructions or
policies established by Employer with respect to the operation of its business
and affairs or Employee's failure to carry out Employee's duties or the
reasonable instructions of the Board of Directors or Chief Executive Officer of
Employer, or
(6) the commission by Employee of any action or the
existence of any state of facts which would legally justify an employer in
terminating a contract of employment.
(c) For purposes of this Agreement, "termination date" shall
mean the earlier of;
(1) Employee's attaining age 70 or
(2) the 10th anniversary of the effective date
hereof, extended automatically by one year for each full year of employment with
Employer or its affiliates (as defined in Subsection 4(a) of this Agreement)
after the 5th anniversary hereof.
(d) In the event of the termination of this Agreement for just
cause, Employer shall pay Employee 90 days' termination pay, consisting of
Employee's base salary for 90 days and incentive compensation applicable to full
calendar years completed prior to Employer's notice of termination.
(e) Employee's employment hereunder may be terminated by
Employer, upon reasonable notice, without cause. In the event of the termination
of this Agreement without cause, pursuant to this subparagraph, Employee shall
be entitled to continue to receive Employee's base salary (but no incentive
compensation except as may be applicable to full calendar years already
completed, or any other fringe benefits), for the remainder of the term of this
Agreement, but in no event for more than 60 months. Unless relieved therefrom by
Employer, Employee, during the period that such payments are made, shall be
obligated to serve as a consultant to the Employer on a mutually agreed basis,
and to refrain from engaging in any business or activity which is directly or
indirectly in competition with any business of Employer or its affiliates and to
comply with the provisions of Sections 3, 4, and 5 hereof.
(f) Notwithstanding anything to the contrary in this
Agreement, the provisions of Sections 3, 4 and 5 shall survive any termination
of Employee's employment under this Agreement.
3. NONDISCLOSURE AGREEMENT. Employee, during the term of employment
under this Agreement, shall have access to and become familiar with various
trade secrets consisting of, but not limited to, computer programs, compilations
of information, records, sales procedures, customer requirements, pricing
techniques, customer lists, methods of doing business and other confidential
information (collectively referred to as the "Trade Secrets"), which are owned
by Employer and its affiliates and regularly used in the operation of their
businesses. Employee shall not use in any way or disclose any of the Trade
Secrets, directly or indirectly, either during the term of this Agreement or at
any time thereafter, except as required in the course of Employee's employment
under this Agreement. All files, records, documents, information, data and
similar items relating to the business of Employer and its affiliates, whether
prepared by Employee or otherwise coming into Employee's possession, shall
remain the exclusive property of Employer and its affiliates and shall not be
removed from their premises under any circumstances without the prior written
consent of the President of Employer (except in the ordinary course of business
during Employee's period of active employment under this Agreement), and in any
event shall be promptly delivered to Employer upon termination of this
Agreement.
4. NONCOMPETITION AGREEMENT.
(a) Without the prior written consent of Employer, Employee
shall not, during the period of employment with Employer, or any of its
affiliates, directly or indirectly, invest (other than investments in
publicly-owned companies) or engage in any business that is competitive with
that of Employer or any of its affiliates or accept employment with or render
services to a competitor of Employer or any of its affiliates as a director,
officer, agent, employee or consultant, or solicit or attempt to solicit or
accept business that is competitive with any business being conducted by
Employee or any of its affiliates during Employee's employment under this
Agreement from any of the customers or prospective customers of Employer or any
of its affiliates, or take any action inconsistent with the fiduciary
relationship of an employee to his employer.
(b) Upon any termination or cessation of Employee's employment
with Employer and all of its affiliates for any reason whatsoever, Employee
shall not, prior to the date which would have been Employee's termination date,
directly or indirectly, either as an individual, a partner or a joint venturer,
or in any other capacity, (i) invest (other than investments in publicly-owned
companies) or engage in any business that is competitive, within any county,
whether or not in Oklahoma, in which Employer or any of its affiliates operates
at the time of such termination or cessation, with that of Employer or its
affiliates, (ii) accept employment with or render services to a competitor of
Employer or its affiliates, within any county, whether or not in Oklahoma, in
which Employer or any of its affiliates operates at the time of such termination
or cessation, as a director, officer, agent, employee or consultant, or (iii)
contact, solicit or attempt to solicit or accept business from any of the
customers of Employer or its affiliates, wherever located, as of the time of
Employee's termination or cessation of employment, whose insurance policies or
claims or other contracts or orders are processed or approved of in Lincoln
County, Oklahoma, or such other county or counties, whether or not in Oklahoma,
in which they may hereafter handle such processing or approval; provided,
however, that this subsection (b) shall not apply if Employee is terminated
without just cause and ceases to receive the compensation set forth in
subsection l(a) of this Agreement.
5. NONEMPLOYMENT AGREEMENT. For a period of five years after the
termination or cessation of his employment with Employer for any reason
whatsoever, unless there was no just cause, Employee shall not, on Employee's
own behalf or on behalf of any other person, partnership, association,
corporation or other entity, hire or solicit or in any manner attempt to
influence or induce any employee of Employer or its affiliates to leave the
employment of Employer or its affiliates, nor shall Employee use or disclose to
any person, partnership, association, corporation or other entity any
information obtained while an employee of Employer or its affiliates concerning
the names and addresses of Employer's or its affiliates' employees.
6. SEVERABILITY. Employee agrees that the noncompetition agreements,
nondisclosure agreements and nonemployment agreements set forth above each
constitute separate agreements independently supported by good and adequate
consideration and shall be severable from the other provisions of, and shall
survive, this Agreement. The existence of any claim or cause of action of
Employee against Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of the covenants
and agreements of Employee contained in the noncompetition, nondisclosure or
nonemployment agreements. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part of this Agreement; and the remaining provisions
of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
7. INVENTIONS. Employee shall promptly disclose, grant and assign to
Employer for its sole use and benefit any and all inventions, improvements,
technical information and suggestions relating in any way to the products of
Employer or any of its affiliates or capable of beneficial use by Employer or
any of its affiliates, which Employee has in the past conceived, developed or
acquired, or may conceive, develop or acquire during the term hereof (whether or
not during usual working hours), together with all patent applications, letters
patent, copyrights and reissues thereof that may at any time be granted for or
upon any such invention, improvement or technical information. In connection
therewith, Employee shall promptly at all times during and after the term
hereof:
(a) Execute and deliver such applications, assignments,
descriptions and other instruments as may be necessary or proper in the opinion
of Employer to vest title to such inventions, improvements, technical
information, patent applications and patents or reissues thereof in Employer and
to enable it to obtain and maintain the entire right and title thereto
throughout the world.
(b) Render to Employer, at its expense, all such assistance as
it may require in the prosecution of applications for said patents or reissues
thereof, in the prosecution or defense of interferences which may be declared
involving any said application or patents, and in any litigation in which
Employer may be involved relating to any such patents, inventions, improvements
or technical information.
8. AFFILIATES. Employee will use Employee's best efforts to ensure that
no relative of Employee or corporation of which employee is an officer, director
or shareholder, or other affiliate of Employee, shall take any action that
Employee could not take without violating any provision of this Agreement.
9. STOCK OPTIONS. If Employee's employment hereunder is terminated
without just cause, then, in lieu of shares of Common Stock of Xxxxxxxx issuable
upon exercise of options ("Options") granted to Employee under Xxxxxxxx'x stock
option plan, or any subsequently adopted option plan (which Options shall be
cancelled), Employee will receive an amount in cash equal to the aggregate
spread between the exercise prices of all Options held by Employee whether or
not then fully exercisable, and the higher of (i) the average between the
closing bid and asked prices of the Company's Common Stock as shown on NASDAQ on
the date notice of such termination is given or (ii) the highest price per share
of Xxxxxxxx Common Stock actually paid in connection with any change in control
of Xxxxxxxx which occurs on or before the 90th day after such notice of
termination.
10. REMEDIES. Employee recognizes and acknowledges that the
ascertainment of damages in the event of Employee's breach of any provision of
this Agreement would be difficult,
and Employee agrees that Employer, in addition to all other remedies it may
have, shall have the right to injunctive relief if there is such a breach.
11. ACKNOWLEDGMENTS. Employee acknowledges and recognizes that the
enforcement of any of the noncompetition provisions in this Agreement by
Employer will not interfere with Employee's ability to pursue a proper
livelihood. Employee further represents that Employee is capable of pursuing a
career in other industries to earn a proper livelihood. Employee recognizes and
agrees that the enforcement of this Agreement is necessary to ensure the
preservation and continuity of the business and good will of Employer. Employee
agrees that due to the nature of Employee's business, the noncompetition
restrictions set forth in this Agreement are reasonable as to time and
geographic area.
12. NOTICES. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other shall be deemed to have been duly given if given in writing and personally
delivered or sent by mail, registered or certified, postage prepaid with return
receipt requested, as follows:
If to Employer: Chandler (U.S.A.), Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
If to Employee: W. Xxxxx XxXxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to Chandler: Xxxxxxxx Insurance Company, Ltd.
P. 0. Box 1289
Grand Cayman, Cayman Islands
Attention: Xxxxx Xxxxxx
Notices delivered personally shall be deemed communicated as of actual receipt;
mailed notices shall be deemed communicated as of three days after mailing.
13. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or written, between the parties hereto with respect to
the subject matter hereof and contains all of the covenants and agreements
between the parties with respect thereto.
14. MODIFICATION. No change or modification of this Agreement shall be
valid or binding upon the parties hereto, nor shall any waiver of any term or
condition in the future be so binding, unless such change or modification or
waiver shall be in writing and signed by the parties hereto.
15. GOVERNING LAW. This Agreement, and the rights and obligations of
the parties hereto, shall be governed by and construed in accordance with the
laws of the State of Oklahoma and shall be performable in Lincoln County,
Oklahoma.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall constitute an original, but all of which shall constitute one and
the same document.
17. COSTS. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which he or it may be entitled.
18. ESTATE. If Employee dies prior to the expiration of the term of
employment, any monies that may be due Employee from Employer under this
Agreement as of the date of Employee's death shall be paid to Employee's estate.
19. ASSIGNMENT. Employer shall have the right to assign this Agreement
to its successors or assigns. The terms "successors and assigns shall include
any person, corporation, partnership or other entity that buys all or
substantially all of Employer's assets or all of its stock, or with which
Employer merges or consolidates. The rights, duties and benefits to Employee
hereunder are personal to Employee, and no such right or benefit, other than
benefits payable after Employee's death, may be assigned by Employee.
20. BINDING EFFECT. This Agreement shall be binding upon the parties
hereto, together with their respective executors, administrators, successors
personal representatives, heirs and assigns.
21. WAIVER OF BREACH. The waiver by Employer of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.
22. GUARANTEE. Xxxxxxxx hereby guarantees the full, complete and prompt
performance by Employer of all of Employer's obligations hereunder, to the same
extent as if they were obligations of Chandler.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
EMPLOYER: Chandler (U.S.A.), Inc.
By: /s/ W. Xxxxx XxXxxx
------------------------------------------
W. Xxxxx XxXxxx, Chairman of the Board
EMPLOYEE: /s/ W. Xxxxx XxXxxx
------------------------------------
W. Xxxxx XxXxxx
XXXXXXXX INSURANCE COMPANY, LTD.
By: /s/ W. Xxxxx XxXxxx
------------------------------------------
W. Xxxxx XxXxxx, Chairman of the Board
