Exhibit 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the 1st day of
January, 1999, by and between NCRIC, Inc. ("Employer") and Xxxxxxx X. Xxxxx
("Crunk").
RECITALS:
A. Employer, for itself and on behalf of NCRIC, A Mutual Holding Company
and its other subsidiaries, NCRIC Holdings, Inc., NCRIC Group, Inc., NCRIC MSO,
Inc., National Capital Insurance Brokerage, Ltd., NCRIC Insurance Agency, Inc.,
Commonwealth Medical Liability Insurance Company, NCRIC Physicians Organization,
Inc. and HCI Ventures, LLC (collectively, the "Affiliated Companies"), desires
to retain Crunk as its Senior Vice President and Chief Financial Officer; and
B. Crunk desires to continue such employment, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth herein, the parties hereto agree as follows:
1. Employment.
Employer hereby agrees to continue to employ Crunk for a term of three (3)
years from the effective date of this Agreement as Senior Vice President and
Chief Financial Officer and to perform such other duties as may be assigned
under the conditions hereinafter specified. Crunk accepts this employment under
the conditions hereinafter specified and agrees to devote her best efforts,
energies, and abilities to the service of Employer on a full-time basis.
2. Duties.
a. Crunk shall serve as Senior Vice President and Chief Financial Officer
of Employer and in such other commensurate executive capacities of Employer
and/or any one or more of the Affiliated Companies as she may from time to time
be assigned by Employer or elected in accordance with direction from the Board
of Directors. Crunk shall perform all of her duties diligently and faithfully.
However, it is understood and agreed that Crunk shall not receive compensation
beyond that specified herein for services provided to the Affiliated Companies.
b. Crunk shall at all times devote her entire working time, attention,
energies, efforts, and skills to the business of Employer, and shall not,
directly or indirectly, engage in any other business activity, whether or not
for profit, gain, or other pecuniary advantages, without the express written
permission of Employer. Notwithstanding the foregoing, Crunk may serve on the
board of directors of any non-competing company and receive compensation
therefor provided she obtains the advance written approval of Employer, which
shall not be unreasonably withheld, and provided that any such service does not
adversely affect her performance of her duties for Employer. Crunk will not be
required to account to Employer for any compensation she may
receive for such approved service on the board of directors of a non-competing
company, and such compensation shall not diminish in any way the compensation or
benefits to which she is entitled under this Agreement.
3. Compensation.
Employer shall pay Crunk basic compensation of One Hundred Thirty-Five
Thousand Dollars ($135,000.00) per year, payable in equal bi-weekly
installments. Any incentive compensation which may be paid to Crunk from time
to time shall have no impact upon Crunk's basic compensation.
4. Benefits.
a. Retirement and/or Pension Plan(s). Crunk shall be entitled to
participate in any retirement and/or pension plan(s) offered to Employer's
senior executives and/or key management employees as a group in accordance with
the terms of such plan(s), as they may be modified at Employer's discretion from
time to time.
b. Automobile Allowance. Employer shall pay Crunk a monthly allowance
of $700.00 for her use in operating and maintaining an automobile necessary in
connection with the performance of her duties hereunder with any expenses not
covered by said $700.00 allowance being the sole responsibility of Crunk.
c. Health and Medical Insurance. Crunk shall be entitled to participate
in any health and medical insurance plan(s) offered to Employer's senior
executives and/or key management employees as a group in accordance with the
terms of such plan(s), as they may be modified at Employer's discretion from
time to time.
d. Paid Sick Leave. Crunk shall accrue one (1) day of paid sick leave per
month, up to a maximum in accordance with the Company's personnel policies
manual. All accrued, but unused, paid sick leave shall be forfeited upon
termination of employment.
e. Paid Vacation. Crunk shall accrue four weeks of paid vacation during
each calendar year; however, in no event shall Crunk use more than three weeks
at any one time. Accrued, but unused, paid vacation in excess of ten days
shall expire on December 31st of the year in which it accrues. No more than ten
days of accrued, but unused, paid vacation may be carried over from one year to
the next. All accrued, but unused, paid vacation is forfeited upon termination
of employment by either party; provided, however, that if Crunk provides advance
notice of her intent to terminate her employment in accordance with paragraph 7
of this Agreement, Employer shall pay her for all of her accrued, but unused,
paid vacation, less standard withholdings and deductions.
f. Life Insurance. Employer shall procure a term life insurance policy in
a face amount of no less than twice the amount of Crunk's annual base
compensation provided that Crunk is insurable at standard rates. Crunk shall be
entitled to designate the beneficiary or
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beneficiaries of such policy in her sole discretion. In the event that Crunk is
not insurable at standard rates, and desires to be insured, Crunk shall be
responsible for payment of any premiums or amounts charged in excess of the
standard rates for such insurance.
g. Disability Insurance. Crunk shall be entitled to participate in any
disability income insurance policy (both long and short term) offered to
Employer's senior executives and/or key management employees as a group in
accordance with the terms of such policies(s), as they may be modified at
Employer's discretion from time to time. In the event that any disability
income insurance policy provided by Employer shall require any waiting or
elimination period during which Crunk is not entitled to collect disability
income insurance payments even though she is disabled from working, then during
such waiting or elimination period, until the commencement of payments under the
disability income insurance policy, Employer shall pay Crunk a supplemental
disability income benefit equal to her regular bi-weekly salary. If, and when,
Crunk should begin to receive disability payments under the terms of Employer's
disability income insurance policy then in force, Employer agrees to supplement
said monthly disability payments by paying to Crunk the difference between such
sums paid by the disability insurer and Crunk's compensation set forth in
Section 3 above for a maximum period of twelve (12) consecutive months.
Following expiration of said twelve (12) months, the coverage and provisions of
Employer's disability income insurance policy shall constitute the entire wage
continuation plan provided in this Agreement and, except for the payment of the
premiums on such policy, Employer shall have no further liability to Crunk for
wage continuation. It is further understood that Crunk's employment with
Employer shall be terminated following twelve (12) consecutive months of total
disability (i.e., being unable to carry out the normal functions and
requirements of her position with Employer) regardless of how and when the
aforementioned disability income payments from Employer's disability income
insurance policy may be paid or due to Crunk.
5. Expenses.
a. Business Expenses. Employer shall reimburse Crunk for ordinary,
necessary, and reasonable business expenses incurred by her in the discharge of
her duties hereunder, including but not limited to travel, lodging and
entertainment expenses, provided Crunk furnishes appropriate documentation for
such expenses and that said expenses are in accordance with the company's then
prevailing policies and procedures regarding said expenditures.
b. Continuing Education Expenses. Employer shall pay the ordinary and
necessary costs associated with continuing education classes or continuing
education programs Crunk participates in which are related to the company's
business interests, provided Crunk furnishes appropriate documentation to
Employer for such costs and gives the Chief Executive Officer of Employer
reasonable notice of any expenditures for continuing education. All such
expenses in excess of One Thousand Dollars ($1,000) must be approved by the
Chief Executive Officer in advance.
c. Club Dues. Employer shall pay up to Twenty Thousand Dollars ($20,000)
in initiation fees and $2,500 in annual membership dues as reimbursement for
Crunk's membership in one country club. Employer shall not pay or reimburse
Crunk for any non-mandatory costs
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associated with such membership, including but not limited to food, beverage and
entertainment costs, greens fees, and court fees, unless Crunk is otherwise
entitled to reimbursement of such costs pursuant to paragraph 5(a) of this
Agreement.
d. Professional Dues. Employer agrees to pay Crunk's annual dues to the
American Institute of Certified Public Accountants.
e. Effect of Termination of Employment: All payment or reimbursement of
expenses authorized by Section 5 hereof shall cease upon Crunk's termination of
employment regardless of cause for said termination.
6. Termination of Employment by Employer.
a. Termination for Cause. The employment of Crunk under this Agreement,
and the term hereof, may be terminated for "cause" by Employer at any time upon
the occurrence of any one or more of the following events:
(i) Crunk's fraud, dishonesty, gross negligence or willful misconduct in
the performance of her duties hereunder, including willful failure to
perform such duties as may properly be assigned her hereunder; or
(ii) Crunk's material breach of any provision of this Agreement.
Any termination by reason of the foregoing shall not be in limitation of
any right or remedy which Employer may have under this Agreement or otherwise.
Should Crunk dispute whether Employer possessed legitimate "cause" in
accordance herewith, then in such event the procedures set forth in paragraph 17
of this Agreement shall be followed to resolve that issue. If Employer
terminates Crunk's employment for "cause" pursuant to this subparagraph 6(a)
(and such termination is decided to be just by an arbitrator appointed for that
purpose in accordance with the provisions herein), her right to any
compensation, including but not limited to severance pay, shall cease
immediately.
b. Termination Without Cause.
(i) Employer may terminate Crunk's employment without cause and without
notice at any time.
(ii) If Employer terminates Crunk's employment without cause, and Crunk
waives all claims against Employer, the Affiliated Companies, and their
predecessors, successors, assigns, directors, officers, partners, agents,
employees, former employees, heirs, executors, attorneys, and administrators
relating to or arising out of her employment or the termination of her
employment by executing a General Release of such claims in a form provided to
her by Employer, Crunk shall receive, as severance pay, an amount equal to two
(2) years salary at the salary rate in effect on the date of termination,
exclusive of benefits and less standard
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withholdings and deductions. Such amount shall represent agreed-upon liquidated
damages for any loss, cost, expense, or damages suffered as a result of such
termination, as well as consideration for Crunk's execution of a General Release
of all claims against Employer and the Affiliated Companies. Employer shall pay
such amount to Crunk in equal monthly installments over a one year period
commencing on the date of termination. Any payment pursuant to the preceding
sentence shall be in lieu of any other compensation which might otherwise be due
Crunk under this Agreement.
(iii) If a "Change of Control" of Employer's business occurs, Employer
shall be deemed to have terminated Crunk's employment without cause for the
purposes of this paragraph. "Change of Control" shall be deemed to have
occurred if: (1) Employer merges with or consolidates with, or sells, leases, or
otherwise transfers all or substantially all of its assets to another entity
(which for the purpose of this Agreement shall include the sale or transfer of
fifty percent or more of the ownership of Employer, but only if such sale shall
be made to an entity not affiliated with Employer); and (2) a material change in
the nature, terms, or conditions of Crunk's employment occurs, including but not
limited to a material change in her duties, authority, responsibilities, or job
location.
7. Termination of Employment By Crunk.
Crunk may voluntarily terminate her employment with Employer provided that
she gives Employer three (3) months prior notice of such termination or pays
Employer liquidated damages equal to the amount of three (3) months basic
compensation at the basic compensation rate in effect on the date Crunk gives
Employer notice of her intent to terminate her employment. It is agreed that
such liquidated damages are to compensate Employer for injury by reason of
Crunk's termination of her employment and not as a penalty, it being impossible
to ascertain or estimate the entire or exact cost, damages, or injury that
Employer may sustain by reason of such termination. Crunk shall have the right
to terminate her employment hereunder without paying Employer liquidated damages
and without in any way affecting her right to compensation or reimbursement
(including, but not limited to, the right to receive severance payments set
forth in this Agreement), or any other right under this Agreement, if Employer
commits a material breach of the terms and conditions of this Agreement and such
breach is not cured within sixty (60) days of Employer receiving written notice
of such breach from Crunk.
8. Protection of Employer
a. Confidential Information.
Crunk shall not at any time during or after her employment with Employer
directly or indirectly disclose, discuss, divulge, copy, or otherwise suffer
confidential information of Employer or the Affiliated Companies to be used,
except as required by the performance of her duties hereunder. For the purposes
of this Agreement, "confidential information" shall mean all information
disclosed to Crunk by Employer or the Affiliated Companies, or known by her as a
consequence of or through her employment with Employer, where such information
is not generally known in the trade or industry, and where such information
refers or relates in any
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manner whatsoever to the business activities, processes, services or products of
Employer or the Affiliated Companies. Such information includes, but is not
limited to, Employer's or the Affiliated Companies' business and development
plans (whether contemplated, initiated, or completed), development sites,
business contacts, customer lists, actuarial tables, loss data, marketing
information, policy forms, contracts, research of any kind, methods of
operation, results of analysis, business forecasts, financial data, costs,
revenues, and similar information. Upon termination of this Agreement, Crunk
shall immediately return to Employer all of its property, and all copies
thereof, including without limitation all confidential information which has
been reduced to tangible form, in her possession, custody, or control.
b. Covenant Not to Compete.
Crunk agrees that she shall not, during her employment and for a period of
one (1) year after the termination of her employment for any reason, directly or
indirectly, either as an officer, director, employee, agent, adviser,
consultant, principal, stockholder, partner, owner, or in any other capacity, on
her own behalf or otherwise, in any way engage in, represent, be connected with
or have a financial interest in, any other insurance company, or any
corporation, firm, association, or other business entity which is, or to the
best of Crunk's knowledge, is about to become, engaged in the same or similar
business as Employer or any of its Affiliated Companies and which otherwise
competes with or is about to compete with Employer or any of its Affiliated
Companies in the District of Columbia or any states where Employer or any of its
Affiliated Companies operate, has plans to operate, or are licensed to operate.
Crunk's ownership of not more than one percent (1%) of the stock of any publicly
traded corporation shall not be deemed a violation of this covenant. Crunk
agrees that the restrictions imposed upon her by the provisions of this
paragraph are fair and reasonable considering the nature of Employer's business,
and are reasonably required for the protection of Employer.
c. Remedies and Acknowledgment of Reasonableness.
Crunk acknowledges that compliance with this paragraph is necessary for the
protection of the goodwill and other proprietary interests of Employer, and
that, after carefully considering the extent of the restrictions upon her and
the rights and remedies conferred upon Employer under this paragraph, the same
are reasonable in time and territory, are designed to eliminate competition
which otherwise would be unfair to Employer, do not stifle the inherent skill
and experience of Crunk, would not operate as a bar to Crunk's sole means of
support, are fully required to protect the legitimate interests of Employer, and
do not confer a benefit upon Employer disproportionate to the detriment to
Crunk.
Crunk further acknowledges and agrees that in the event of a breach of this
paragraph, Employer would not have an adequate remedy at law because the damages
flowing from such breach would not be readily susceptible of measurement in
monetary terms and that Employer shall be entitled to injunctive relief and may
obtain a temporary order restraining against any threatened breach or future
breach in addition to any other remedies that may be available at law or equity.
Nothing in this paragraph shall be deemed to limit Employer's remedies at law or
in equity for breach of this or any other paragraph of this Agreement.
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9. Death or Incapacitation.
In the event that Crunk dies or, due to a physical or mental impairment,
becomes unable to perform the essential functions of her position with or
without reasonable accommodation, this Agreement shall be deemed terminated and
Crunk or her estate, as the case may be, shall be entitled to no further salary,
compensation, or benefits hereunder, except (i) any unpaid salary, incentive
payments, and vacation accrued and earned by Crunk up to and including the date
of such termination, and (ii) any disability, life insurance, or other benefits
to which Crunk or her estate may be entitled on the date of such termination in
accordance with the terms and conditions of this Agreement, including but not
limited to paragraph 4(g) hereof, and any applicable benefit plan(s) as set
forth in official plan documents.
10. Assignment.
This Agreement is a personal service agreement and neither party shall have
the right to assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other party.
11. Notices.
All notices required or permitted hereunder shall be in writing and shall
be deemed properly given if delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested. If mailed to
Employer, such notices shall be addressed in care of NCRIC, Inc., at its
principal place of business, attention: Chief Executive Officer, or at such
other address as Employer may hereafter designate in writing to Crunk. If
mailed to Crunk, such notices shall be addressed to her at her home address last
known on the records of Employer, or at such other address as Crunk may
hereafter designate in writing to Employer.
12. Successors Bound.
This Agreement shall bind and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, estates, and permitted
successors and assigns.
13. Waiver.
No provision hereof may be waived, except by a written instrument signed by
the party against whom such waiver is sought to be enforced. The failure or
waiver of either party hereto at any time, or from time to time, to require
performance by the other party of such other party's obligation hereunder, shall
not deprive that party of the right to insist upon strict adherence to such
obligation at any subsequent time. Each party hereto agrees that any waiver of
its rights arising out of any breach of this Agreement by the other party shall
not be construed as a waiver of any subsequent breach.
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14. Amendment.
No provision hereof may be altered or amended, except by a written
instrument signed by the party against whom such alteration or amendment is
sought to be enforced.
15. Confidentiality.
Except as otherwise agreed between the parties, each party agrees to
maintain the confidentiality of this Agreement, provided, however, that either
party may disclose provisions of this Agreement to others for the purpose of
protecting or enforcing their respective rights hereunder.
16. Governing Law.
The parties agree that this Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
District of Columbia, without regard to the principles of conflict of laws
thereof.
17. Arbitration.
(a) Whenever a "dispute" arises between the parties concerning this
Agreement (other than a dispute arising under paragraph 8 hereof) or their
employment relationship, including without limitation the termination thereof,
the parties shall use their best efforts to resolve the "dispute" by mutual
agreement.
(b) If such a "dispute" cannot be so resolved by the parties best efforts,
the parties agree to participate in mediation of the "dispute" with a mediator
designated by the American Arbitration Association ("AAA") or any other mediator
on whom the parties agree. The costs, if any, of the mediator shall be paid by
Employer.
(c) If such a "dispute" cannot be so resolved by mediation, it shall be
submitted to final and binding arbitration to the exclusion of all other avenues
of relief. For the purposes of this paragraph, the term "dispute" means all
controversies or claims relating to terms, conditions, or privileges of
employment, including without limitation claims for breach of contract,
discrimination, harassment, wrongful discharge, misrepresentation, defamation,
emotional distress, or any other personal injury, but excluding claims for
unemployment compensation or worker's compensation. The dispute shall be
submitted to the Washington, D.C. office of the American Arbitration Association
("AAA") and adjudicated in accordance with AAA's National Rules for the
Resolution of Employment Disputes then in effect, except that the parties to
such arbitration shall be entitled to engage in pre-hearing discovery, to the
extent permitted by and according to the provisions of the Federal Rules of
Civil Procedure. The decision of the Arbitrator must be in writing and shall be
final and binding on the parties, and judgment may be entered on the
arbitrator's award in any court having jurisdiction thereof. In addition to any
relief granted by the arbitrator, the prevailing party shall be entitled to
recover reasonable attorney's fees and costs from the non-prevailing party. The
Arbitrator shall be deemed to possess the
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powers to issue mandatory orders and restraining orders in connection with such
arbitration; provided, however, that nothing in this paragraph shall be
construed so as to deny Employer the right and power to seek and obtain
injunctive relief in a court of equity for any breach or threatened breach by
Crunk of any of the provisions contained in paragraph 8 of this Agreement. This
paragraph shall survive the termination of this Agreement.
18. Severability.
In the event that any provision of this Agreement conflicts with the law
under which this Agreement is to be construed, or if any such provision is held
invalid or unenforceable by a court of competent jurisdiction or an arbitrator,
such provision shall be deleted from this Agreement and the Agreement shall be
construed to give full effect to the remaining provisions thereof.
19. Headings and Captions.
The paragraph headings and captions contained in this Agreement are for
convenience only and shall not be construed to define, limit or affect the scope
or meaning of the provisions hereof.
20. Entire Agreement.
This Agreement contains and represents the entire agreement of the parties
and supersedes all prior agreements, representations, or understandings, oral or
written, express or implied with respect to the subject matter hereof. This
Agreement may not be modified or amended in any way unless in a writing signed
by both Crunk and the Chief Executive Officer of Employer. No representation,
promise or inducement has been made by either party hereto that is not embodied
in this Agreement, and neither party shall be bound or liable for any alleged
representation, promise, or inducement not specifically set forth herein.
21. Effective Date of Agreement.
This Agreement shall take effect only when it has been executed by all
parties, but when executed and approved shall be enforceable as of January 1,
1999.
[Signatures on following page.]
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement on
the date and year first written above.
EMPLOYER:
NCRIC, INC.
By: /s/ R. Xxx Xxxx, Xx.
------------------------
R. Xxx Xxxx, Xx.
Chief Executive Officer
CRUNK:
/s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
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