EXHIBIT 10
EMPLOYMENT AGREEMENT
AGREEMENT between X. X. Xxxxxx Holdings, Inc., a Delaware corporation
(hereinafter called the "Company"), and Xxxxx X. Xxxxxx, Xx. (hereinafter called
the "Employee").
1. EFFECTIVE DATE. The effective date of this Agreement shall be
January 1, 1997.
2. EMPLOYMENT. The Company hereby employs the Employee and the Employee
hereby accepts employment upon the terms and conditions hereinafter set forth.
3. TERM. The term of this Agreement shall be from the effective date of
this Agreement to March 31, 2002. This Agreement is also subject to early
termination by the Company for "Cause."
For purposes of this Agreement, the Company shall have Cause to
terminate Employee's employment hereunder upon (A) the Employee having been
convicted of any felony under any state or federal law; (B) an act or acts of
personal dishonesty committed by Employee and intended to result in substantial
personal enrichment of Employee at the expense of the Company; (C) the willful
malfeasance or gross negligence by the Employee in the performance of his duties
hereunder; or (D) gross misconduct by the Employee materially injurious to the
Company. In the event that this Agreement shall be terminated for Cause, the
Company shall continue to make payments hereunder for all services rendered by
the Employee up to the date of termination but shall have no further obligations
to make payments after that date.
The Company may terminate the Employee's employment hereunder if (i)
the Employee becomes disabled, as such term is defined in the group disability
insurance policy of Employer or (ii) the Employee dies. In any such case, the
Company shall have no further obligation or liability under this Agreement.
4. COMPENSATION. For all services rendered by the Employee under this
Agreement, the Company shall pay the Employee at a salary rate of One Million
Dollars ($1,000,000) per year, payable in accordance with the Company's payroll
practice as from time to time in effect. This compensation amount will not
preclude Employee from participation in other supplemental compensation programs
that the Company may choose at is discretion to adopt during the term of this
Agreement.
5. DUTIES. The Employee is engaged as Chief Executive Officer of the
Company and hereby promises to perform and discharge faithfully and efficiently
the duties which may be assigned to him from time to time.
6. EXTENT OF SERVICES. The Employee shall devote substantially his full
time, attention and energies to the business of the Company and shall not during
the term of this Agreement be engaged in any other substantial business
activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage; but this
shall not be construed as preventing the Employee from investing his personal
assets in businesses which do not compete with the Company in such form or
manner as will not require any substantial services on the part of the Employee
in the operation of the affairs of the companies in which such investments are
made and in which his participation is solely that of an investor and except
that the Employee may purchase securities in any corporation whose securities
are regularly traded, provided that such purchases shall not result in him
collectively owning beneficially at any time more than 1% of any class of
securities of any corporation engaged in a business competitive with that of the
Company.
7. COVENANTS NOT TO SOLICIT, COMPETE OR INTERFERE. For a period of two
(2) years from and after the termination of Employee's employment hereunder for
any reason, Employee will not, directly or indirectly, as a sole proprietor,
member of a partnership, or stockholder, investor, officer or director of a
corporation, or as an employee, agent, associate or consultant of any person,
firm or corporation:
(a) Engage in business activities of the types performed by the Company
or its affiliates in the geographic areas where the Company or its affiliates
conducts those business activities.
(b) Solicit or accept business (i) from any clients or prospects of the
Company or its affiliates who were solicited or serviced directly or indirectly
by the Employee or where the Employee supervised, directly or indirectly, in
whole or in part, the solicitation or service activities related to such clients
or prospects or (ii) from any former client of the Company or its affiliates who
was such within five (5) years prior to Employee's date of termination and who
was solicited or serviced directly by the Employee or where the Employee
supervised, directly or indirectly, in whole or in part, the solicitation or
service activities related to such former client; or
(c) Solicit, or assist anyone else in the solicitation of, any of the
Company's employees to terminate their employment with the Company and to become
employed by any business enterprise with which the Employee may then be
associated, affiliated, or connected; or
As used in this paragraph 7 and in paragraph 8, "affiliate" shall mean
any person, firm or corporation that, directly or indirectly, controls, is
controlled by, or is under common control with, the Company, whether such
control is through stock ownership, contract or otherwise, and shall expressly
include the Company's predecessor, X. X. Xxxxxx Co. Limited Partnership; and
"prospect" shall mean any person or organization to whom a proposal for services
was rendered by the Company or its affiliates during the 12-month period
immediately preceding the Employee's date of termination; and "solicit" includes
but is not limited to any contact or communication of any nature with a prospect
or existing client for the purpose of or having the effect of maintaining or
establishing goodwill as a basis for any present, future or expanded business,
or otherwise furthering a business goal.
It is the desire and intent of the parties that the provisions of this
paragraph 7 shall be enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular portion of this paragraph 7 shall be adjudicated
to be invalid or unenforceable, this paragraph 7 shall be
deemed amended to permit a court to modify the portion thus adjudicated to be
invalid or unenforceable, so that this paragraph shall be legally enforceable to
the full extent permitted in the law of the particular jurisdiction in which
such adjudication is made.
8. NONDISCLOSURE OF INFORMATION. Employee recognizes and acknowledges
that the Company's trade secrets and confidential or proprietary information,
including such trade secrets or information as may exist from time to time, and
information as to the identity of clients of the Company, reinsurance contract
data and other similar items, are valuable, special and unique assets of the
Company's business, access to and knowledge of which are essential to the
performance of the duties of Employee hereunder. Employee will not, during or
after the term hereof, in whole or in part, disclose such secrets or
confidential or proprietary information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, nor shall
Employee make use of any such property for his own purposes or for the benefits
of any person, firm, corporation or other entity (except the Company) under any
circumstances, during or after the term hereof, provided that after the term
hereof these restrictions shall not apply to such secrets or information which
are then in the public domain (provided that Employee was not responsible,
directly or indirectly, for such secrets or information entering the public
domain without the Company's consent).
9. INJUNCTIVE RELIEF. If there is a breach or threatened breach of the
provisions of paragraphs 7 or 8 of this Agreement, the Company shall be entitled
to an injunction restraining Employee from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach including recovery of and damages incurred by the
Company and any profits made by Employee as a result of such breach or
threatened breach. The Company shall be entitled to recovery of its legal fees
and related costs in the event of a breach or threatened breach of this
Agreement by Employee.
10. EMPLOYEE BENEFITS. During the term of this Agreement, Employee
shall participate in all employee benefit plans of the Company, subject to the
eligibility, enrollment and other requirements of such plans; provided, however,
that to the extent Employee's participation in any such plans would result in
taxable income to Employee in an amount that would not be deductible by the
Company under Section 162(m) of the Internal Revenue Code, then Employee's
salary as set forth in paragraph 4 shall be reduced accordingly, unless Employer
and Employee agree to a deferral of that taxable income in a manner designed to
render the deferred income deductible when received under Section 162(m) of the
Internal Revenue Code.
11. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given or
delivered if delivered personally or mailed by registered or certified mail,
return receipt requested, with first class postage prepaid, to his residence in
the case of Employee and to its principal office in the case of the Company.
12. BREACH, WAIVER OF BREACH. The waiver by the Company of a breach of
any provision of this Agreement by the Employee shall not operate or be
construed as a waiver of any subsequent breach by the Employee.
13. GOVERNING LAW. The validity, interpretation, construction,
performance, enforcement and remedies of or relating to this Agreement, and the
rights and obligations of
the parties hereunder, shall be governed by the substantive laws of the State of
Minnesota (without regard to the conflict of laws rules or statutes of any
jurisdiction), and any and every legal proceeding arising out of or in
connection with this Agreement shall be brought in the appropriate courts of the
State of Minnesota, each of the parties hereby consenting to the exclusive
jurisdiction of said courts for this purpose.
14. ASSIGNMENT. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
of the Company and may be assigned, for all or any part of the term hereof, by
the Company to any corporation, (i) which at the time controls the capital stock
of the Company, (ii) which succeeds to substantially all the assets of the
Company or (iii) the controlling capital stock of which is at the time owned by
the Company; provided, however, that in the event of any transaction specified
in (i), (ii) or (iii) above, the Company shall remain liable with respect to the
obligations of the Company under this Agreement. In the event of such
assignment, any and all references to the "Company" in other paragraphs of this
Agreement shall be deemed to mean and include such assignee corporation.
15. SURVIVAL. The parties expressly acknowledge and agree that the
provisions of this Agreement, which by their express or implied terms extend
beyond the termination of Employee's employment hereunder (including, without
limitation, the provisions of paragraphs 7 and 8 relating to noncompetition and
nondisclosure of information), shall continue in full force and effect
notwithstanding Employee's termination of employment hereunder or the
termination of this Agreement, respectively.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the dates below.
X. X. Xxxxxx Holdings, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000
By: /S/ Xxxxx X. Xxxxxx June 8, 1997
Its: President Date
/S/ Xxxxx X. Xxxxxx, Xx. Xxx 00, 0000
Xxxxx X. Xxxxxx, Xx. Date
000 Xxxxx 00X
Xxxxxx, XX 00000
