Exhibit 10.26
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is made and effective this
23rd day of May, 2005, by and between Delta Mutual, Inc., a Delaware Corporation
(the "Company") and Xxxxxx X. Xxxxxx (the "Executive").
Company desires to employ Executive and Executive desires to enter into the
employ of Company in such capacity and on the terms and conditions contained in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties, intending to be legally bound, agree as follows:
1. Employment.
Company hereby agrees to employ Executive as it's Vice President, Treasurer and
Chief Financial Officer and Executive hereby accepts such employment in
accordance with the terms of this Agreement and the terms of employment
applicable to employees of Company, in general. In the event of any conflict or
ambiguity between the terms of this Agreement and terms of employment applicable
to employees of the Company in general, the terms of this Agreement shall
prevail. Election or appointment of Executive to another office or position,
regardless of whether such office or position is inferior to Executive's initial
office or position, shall not be a breach of this Agreement. Executive hereby
represents and warrants that he has the legal capacity to execute and perform
this Agreement and that it is a valid and binding agreement against him
according to its terms. In addition, Executive represents and warrants that he
knows of no reason why he is not physically capable of performing his
obligations under this Agreement in accordance with its terms.
2. Duties of Executive.
Executive shall have such powers and duties as are commensurate with those
positions as described in Company's bylaws and as may be assigned to him from
time to time by Company's Board of Directors (the "Board) or Company's Chief
Executive Officer. Except for periods of illness or incapacity, and vacation
periods in accordance with Company's regular practice for executives, Executive
shall devote all of his business time, attention, skills and efforts exclusively
to the business and affairs of Company and its subsidiaries and shall perform
all his duties in a professional, ethical and business-like manner. Executive
will not, during the term of this Agreement, directly or indirectly engage in
any other business, either as an employee, employer, consultant, principal,
officer, director, advisor, or in any other capacity, either with or without
compensation, without the prior written consent of Company.
3. Compensation.
For all services rendered by Executive in any capacity required hereunder during
the term of this Agreement, including, without limitation, services as an
employee, officer, director, or member of any committee of Company, or any
subsidiary, affiliate or division thereof, Executive shall be compensated as
follows:
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A. A fixed salary of $132,000 per year ("Base Salary"), payable in
accordance with the customary payroll practices of Company, but in
no event less frequently than monthly. Notwithstanding the previous
sentence of this paragraph 3.A., Executive agrees to accept a
minimum monthly salary of $6,000 until such times as the financial
condition of the Company (as determined by the Board, in its sole
discretion) permits the payment of his full monthly salary of
$11,000. Executive agrees that the Company will record as his
accrued salary the difference (if any) between the actual monthly
salary paid to Executive and $6,000 and that the Company shall have
no further accrued salary liability to Executive. The Base Salary
shall be reviewed not later than the end of each calendar year that
Executive is employed by Company. Company may directly or indirectly
withhold from any payments made under this Agreement all Federal,
state, city, local or other taxes as shall be required pursuant to
law or governmental regulation or ruling.
B. Bonus. Executive shall be included, in a manner consistent with his
position, in any bonus system, bonus pool, incentive compensation,
profit sharing, deferred compensation or similar plan or program for
senior executives, officers or employees that may be implemented
from time to time by the Board.
C. Stock Options. Executive shall be included, in a manner consistent
with his position, in any stock option plan(s) for senior executives
and/or employees of Company in general, that may be established from
time to time by the Board.
D. Additional Benefits. Except as modified by this Agreement, Executive
shall be entitled to participate in Company's group health insurance
plan and any other benefit plans (including pension or retirement
plans) as are made available to executives and/or the employees of
Company in general. Notwithstanding the foregoing, nothing in this
Agreement shall preclude the amendment or termination of Company's
group health insurance plan or any other benefit plan or program,
provided that such amendment or termination is applicable to all the
employees of Company. In addition, Executive shall be entitled to be
paid for vacation days and holidays in accordance with the Company's
current policies for senior executives, provided that Executive
shall be entitled to not less than fifteen (15) days of paid
vacation per calendar year during the period that this Agreement is
in effect. The carry-over of any unused vacation days will be
governed by and in accordance with Company policy. Additional
periods of absence due to illness, incapacity or personal leave, if
any, shall be granted at the discretion of the Board which, in its
sole discretion, may compensate Executive during periods of
additional absence.
E. Business Expenses. Company shall pay or reimburse Executive for all
reasonable, necessary and usual business expenses incurred by
Executive in connection with the performance of his duties and
obligations under this Agreement, subject to Executive's
presentation of appropriate documentation and receipts and in
accordance with such procedures as Company may from time to time
establish for its executives, consistent with the need to preserve
any deductions to which Company may be entitled for Federal tax
purposes.
4. Term and Termination.
A. This Agreement shall commence on June 1, 2005 and shall continue in effect
for a period of three (3) years (the "Initial Term"). Thereafter, the
Initial Term shall be extended for additional one-year periods (the
"Additional Term"), if neither party has given the other party notice of
termination at least ninety (90) days prior to the end of the Initial Term
or the then current Additional Term.
B. Termination for Cause. Company may discharge Executive at any time for
"Cause" which shall be defined as any of the following: 1) any act of
fraud, misappropriation, self dealing, personal dishonesty or moral
turpitude; 2) willful misconduct; 3) indictment of a crime that
constitutes a felony; 4) breach by Executive of any of his obligations
regarding confidential information as set forth in Section 5 of this
Agreement; 5) if Executive fails or refuses (through habitual neglect or
otherwise) to perform material assigned duties; 6) if Executive engages in
conduct that causes material harm or damage to Company, including
Company's reputation or standing; 7) any material violation of any Company
policy, that is not cured within ten (10) days after receipt of written
notice from Company; or 8) any material breach of any provision of this
Agreement. In addition, subject to applicable law, Company may discharge
Executive for "Cause" in the event Executive becomes physically or
mentally disabled and is therefore substantially unable to carry out his
duties for a period of 120 days or more in any twelve-month period. In the
event of a termination for "Cause," Company shall provide five (5) days
written notice to Executive ("Termination Notice") and Executive shall be
ineligible for any additional Base Salary, severance or other payments or
benefits under this Agreement or otherwise after the date of termination
specified in the Termination Notice.
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C. Other Termination. If Executive's employment is terminated by Company for
any reason other than death or for "Cause" (as defined in Section 4.B.),
or Company elects not to renew Executive's employment under this Agreement
or to extend this Agreement for any Additional Term, then Company agrees
to continue Executive's then current Base Salary for six (6) months or
until such time as Executive commences other full-time employment,
whichever occurs earlier. Executive may terminate this Agreement at any
time by providing at least thirty (30) days written notice to Company
("Executive's Termination Notice"). If Executive terminates this
Agreement, then Company may, upon receipt of Executive's Termination
Notice, immediately relieve Executive of all his obligations and duties
under this Agreement, provided that Executive's then current Base Salary
and benefits shall continue until the date specified in Executive's
Termination Notice.
D. Termination for Change in Control. If Executive's employment is terminated
without Cause upon a consolidation, merger or the sale of substantially
all of the assets of Company to another corporation or entity in which
Company is not the surviving entity, then Executive shall be entitled to
receive a lump sum payment upon such termination equal to the greater of:
1) 100% of his then current Base Salary plus 100% of his incentive
compensation for the prior fiscal year; or 2) 100% of his then current
Base Salary plus 100% of his projected annual incentive compensation for
the remainder of the Initial Term or any Additional Term of this
Agreement, and Executive shall not be entitled to any further payments
pursuant to this Agreement.
5. Other Duties During and After Term.
A. Confidential Information. Executive recognizes and acknowledges that all
information pertaining to the affairs, business, clients or customers of
Company or any of its subsidiaries or affiliates (any or all of such
entities being hereinafter referred to as the "Business"), as such
information may exist from time to time, other than information that
Company has previously made publicly available or which is in the public
domain, is confidential information and is a unique and valuable asset of
the Business, access to and knowledge of which are essential to the
performance of Executive's duties under this Agreement. Executive shall
not divulge to any person, firm, association, corporation or governmental
agency, any information concerning the affairs, business, clients or
customers of the Business (except such information as is required by law
to be divulged to a government agency or pursuant to lawful process), or
make use of any such information for his own purposes or for the benefit
of any person, firm, association or corporation (except the Business) and
shall use his reasonable best efforts to prevent the disclosure of any
such information by others. All records, memoranda, letters, books,
papers, reports, accountings, experience or other data, and other records
and documents relating to the Business, whether made by Executive or
otherwise coming into his possession, are confidential information and
are, shall be, and remain property of the Business. No copies shall be
made which are not retained by the Business, and Executive agrees, on
termination of his employment or on demand of Company, to deliver the same
to Company.
B. Remedies. Company's obligation to make payments or provide for any
benefits under this Agreement shall cease upon a violation of the
preceding provision of this Section 5. Executive acknowledges that Company
may be severely and irreparably damaged in the event Executive violates
the provision of Section 5.A. above, and that the extent of damage may be
difficult or impossible to determine. Therefore, Executive agrees that in
addition to equitable relief, including a preliminary as well as a
permanent injunction (without the necessity of posting a bond).
Executive's agreement as set forth in this Section 5 shall (i) continue
throughout the duration of Executive's employment with Company; and (ii)
survive Executive's termination of this Agreement and/or Executive's
employment with Company, whether or not such termination is voluntary or
is the result of termination of Executive by Company with or without
Cause.
6. Notices.
Any notice required by this Agreement or given in connection with it, shall be
in writing and shall be given to the appropriate party by personal delivery or
by certified mail, postage prepaid, or recognized overnight delivery services;
If to Company:
Delta Mutual, Inc.
Attn: Chief Executive Officer
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
If to Executive:
Xxxxxx X. Xxxxxx
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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7. Final Agreement.
This Agreement supersedes all prior understandings or agreements (whether
written or oral) between Executive and Company or any of its subsidiaries and
affiliates and sets forth the entire understanding between the parties with
respect to the subject matter hereof. This Agreement may not be modified except
by written amendment duly executed by both parties.
8. Governing Law.
This Agreement shall be construed and enforced in accordance with the laws of
the Commonwealth of Pennsylvania.
9. Headings.
Headings used in this Agreement are provided for convenience only and shall not
be used to construe meaning or intent.
10 No Assignment.
Neither this Agreement nor any interest in this Agreement may be assigned by
Executive without the prior express written approval of Company, which may be
withheld by Company at Company's absolute discretion.
11. Severability.
If any provision of this Agreement or application thereof to anyone or under any
circumstances is adjudicated to be invalid or unenforceable in any jurisdiction,
then this Agreement, including all of the remaining terms, will remain in full
force and effect as if such invalid or unenforceable provision had never been
included.
12. Arbitration.
The parties agree that they will use their best efforts to amicably resolve any
dispute arising out of or relating to this Agreement. Any controversy, claim or
dispute that cannot be so resolved shall be settled by final binding arbitration
in accordance with the rules of the American Arbitration Association and
judgment upon the award rendered by the arbitrator or arbitrators may be entered
in any court having jurisdiction thereof. Any such arbitration shall be
conducted in Harrisburg, Pennsylvania, or such other place as may be mutually
agreed upon by the parties. Within fifteen (15) days after the commencement of
the arbitration, each party shall select one person to act as arbitrator, and
the two arbitrators so selected shall select a third arbitrator within ten (10)
days of their appointment. Each party shall bear its own costs and expenses and
an equal share of the arbitrator's expenses and administrative fees of
arbitration
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
DELTA MUTUAL, INC.
By: /s/ Xxxxx Xxxxx
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Xxxxx X. Xxxxx
President & CEO
EXECUTIVE
By: /s/ Xxxxxx Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
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