EXHIBIT 10.43.1
ARISTA INVESTORS CORP.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
January 21, 2000
Xx. Xxxxxxx X. Xxxxxx
00 Xxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xxxxxxx:
This letter is intended to amend and restate Paragraphs 1, 2, 4 and 8
of that certain letter agreement, dated September 24, 1998 (the "Letter
Agreement"), between you and Arista Investors Corp., a Delaware corporation (the
"Company"), pursuant to which you are employed by the Company as President. All
terms not defined herein shall have the meanings ascribed to them in the Letter
Agreement.
In connection with the foregoing, Paragraphs 1, 2, 4 and 8 of the
Letter Agreement are hereby deleted in their entirety and replaced by the
following sections effective as of October 1, 1999:
"1. EMPLOYMENT WITH THE COMPANY.
(a) During the period commencing on the Effective Date
and ending on the later to occur of (i) the second anniversary of the
Effective Date, or (ii) the termination date of that certain
Administrative Services Agreement between the Company and The Guardian
(the "Administrative Services Agreement"), (hereinafter referred to as
the "Employment Period"), you shall serve as President of the Company,
subject to the terms and conditions specified herein; PROVIDED,
HOWEVER, that the Employment Period shall terminate no later than the
fifth anniversary of the Effective Date, subject to the conditions set
forth in paragraph 2(b).
(b) Notwithstanding anything contained herein to the
contrary, in the event this Agreement is being terminated pursuant to
either paragraph 1(a)(i) or 1(a)(ii) (the "Proposed Termination"), the
Company or such successor or surviving corporation, at its sole option,
shall have the right to elect to extend the Employment Period for up to
three additional one-year periods upon not less than sixty (60) days
prior written notice mailed to you prior to the Proposed Termination;
PROVIDED, HOWEVER, that the Employment Period shall terminate not later
than the fifth anniversary of the Effective Date, subject to the
conditions set forth in paragraph 2(b).
(c) As President you shall assist, to the best of your
ability, in the operation of the Company, which shall include, but
shall not be limited to, the sale, promotion and development of the
products and business of the Company. You shall have the powers and
duties commonly ascribed to a senior executive officer of a corporation
and shall report to and shall be responsible to the Board of Directors
of the Company. During the Employment Period, the Board of Directors
agrees to nominate you for election to the Company's Board of
Directors.
(d) Except during vacation periods or absences due to
temporary illness, you shall devote such time as you reasonably deem
necessary in order to perform your duties and responsibilities
hereunder, but in no event shall you devote less than One Hundred and
Twenty (120) days thereto during each twelve month period falling
within the Employment Period. Nothing herein contained shall prevent or
be construed as preventing you from engaging in the business of acting
as a soliciting agent, broker or general agent on behalf of any other
insurance company for the sale of life insurance, property and casualty
insurance, or accident and health insurance, provided however, you
shall not engage in the business of acting as a soliciting agent,
broker or general agent on behalf of any other insurance company for
the sale of statutory disability benefits insurance or any other
insurance product currently administered or serviced by the Company, or
hereafter offered, written, administered or serviced during the
Employment Period by the Company or its affiliates. Nothing herein
contained shall prevent or be construed as preventing you from holding
or purchasing up to five (5%) percent of any class of stock or
securities of any corporation which is listed on a national securities
exchange or is regularly traded in the over-the-counter market, or from
holding or making other investments in or from participating in any
other business venture, so long as such investment or your
participation in such business venture does not involve any conflict
with your duties or obligations to the Company as provided in this
Agreement."
2
"2. COMPENSATION.
(a) In consideration for services to be rendered by you
hereunder during the Employment Period:
(i) You shall receive a salary at the rate of
One Hundred and Fifty Thousand Dollars ($150,000) per annum, which
salary shall be subject to all applicable federal, state and other tax
withholdings. Such salary shall be paid to you in twenty-six (26) equal
bi-weekly installments, payable in arrears or on such other basis as
other employees of the Company generally are paid;
(ii) With respect to the period commencing
January 1 of each fiscal year of the Company, commencing with the
fiscal year beginning January 1, 1999, and ending on December 31st of
each fiscal year or the portion of such fiscal year during which you
are an employee of the Company (each a "Bonus Period"), the Company
will pay to you as additional compensation no later than One Hundred
Twenty (120) days after the end of such fiscal year, such bonus in
light of your contributions to the Company's performance for such Bonus
Period less the Advanced Bonus (as defined herein) previously paid to
you for such Bonus Period. Such bonus shall be based upon a weighted
formula to be determined by the Company's Board of Directors. The
weighted formula referred to herein to be applied by the Board of
Directors for the bonus to be paid by the Company to you for any Bonus
Period will be equal to eight percent (8%) of the Company's annual
earnings before income taxes from third party administration operations
for such Bonus Period (the "Annual Bonus"), but in no event shall the
Annual Bonus be less than $35,000.00. On or about January 1st of each
Bonus Period, Thirty Five Thousand Dollars ($35,000) (the "Advanced
Bonus") shall be paid to you as an Advanced Bonus. If the Annual Bonus
is greater than $35,000, then you shall be paid the difference between
the Annual Bonus calculated hereunder less the Advanced Bonus for such
Bonus Period no later than One Hundred and Twenty (120) days after the
end of such fiscal year. If the Annual Bonus calculated hereunder is
less than or equal to the Advanced Bonus for such Bonus Period, no
additional bonus shall be paid to you for such Bonus Period. As used
herein, the term "earnings before income taxes from third party
administration operations" shall mean the income of the Company's
current operations before taxes and extraordinary or non-recurring
items from third party administration operations for such Bonus Period.
(iii) In recognition of your services to the
Company, it is contemplated that the Company may, but shall not be
obligated to, grant stock options to you to purchase shares of the
Company's Class A Common Stock when, and if, determined by the Board of
Directors of the Company.
3
(b) In the event this Agreement shall terminate in the
manner contemplated in sub-paragraph 8(b)(v), the Company shall have
the option, exercisable on sixty (60) days prior written notice, to
advise you that the Company has elected to cause you not to engage in
any activity described in sub-paragraph 8(a)(i) and 8(a)(ii) for a
period of twelve (12) months following the date of such termination in
consideration of the payment by the Company of the sum of One Hundred
Eighty-Five Thousand Dollars ($185,000) to you, which payment shall be
paid to you in twelve (12) equal monthly installments, payable on the
first day of the month, commencing in the month subsequent to the month
in which your employment with the Company terminates. In the event the
Company fails to send such written notice to you, such failure shall be
deemed to be an election by the Company not to require you to forebear
from engaging in any of the activities described in sub-paragraph
8(a)(i) and 8(a)(ii) from and after the date of such termination."
"4. REIMBURSEMENT OF EXPENSES.
(a) The Company shall reimburse you for all reasonable
expenses incurred in connection with the promotion of the business of
the Company, including expenses for travel, entertainment and similar
expenses incurred by you on the Company's behalf. No such reimbursement
shall be made except upon the presentation by you of an itemized
account of such expenses or other evidence thereof for which
reimbursement then is being sought, all in form reasonably satisfactory
to the Company.
(b) The Company shall pay you the sum of Nine Thousand
($9,000) Dollars per annum for automobile costs and expenses in
connection with the use of your automobile for Company business,
payable in twelve (12) equal monthly installments payable on the first
(1st) day of each month falling within the Employment Period.
(c) The Company shall provide a Five Thousand Dollar
($5,000) nonallocated expense allowance for expenses incurred by you in
carrying on the business of the Company for each twelve (12) month
period falling within the Employment Period, payable in twelve (12)
equal monthly installments on the first (1st) day of each month falling
within the Employment Period."
"8. RESTRICTIVE COVENANTS.
(a) You hereby acknowledge and recognize the highly
competitive nature of the Company's business and, accordingly, agree
that, in consideration of the premises contained herein, you will not
during the Employment Period and thereafter until the Designated Date
(as hereinafter defined): (i) directly or indirectly engage in any
4
Competitive Activity (as hereinafter defined), whether such engagement
shall be as an officer, director, employee, consultant, agent, lender,
stockholder, or other participant; or (ii) assist others in engaging in
Competitive Activity. As used herein, the term "Competitive Activity"
shall mean and include the development and marketing of and all
activity involving the sale, administration or servicing of statutory
disability benefits insurance or any other insurance product, then
offered by the Company or by any subsidiary of the Company during the
calendar year immediately preceding the termination of your employment
hereunder, and any other activity prohibited under paragraph 1(d)
hereof.
(b) As used in this paragraph 8, the "Designated Date"
shall mean any of the following dates:
(i) in the event you willfully terminate your
employment with the Company in violation of this Agreement prior to the
expiration of the Employment Period, the term "Designated Date" shall
mean the one (1) year anniversary of the date of such termination; or
(ii) in the event the Company terminates your
employment under this Agreement for Cause, the term "Designated Date"
shall mean the one (1) year anniversary of the date of such
termination; or
(iii) in the event the Company terminates your
employment without Cause, the term "Designated Date" shall mean the
date of such termination; or
(iv) in the event of any consolidation or merger
of the Company into or with another corporation during the Employment
Period, and the Company is not the surviving entity, or the sale of all
or substantially all of the assets of the Company to another
corporation during the Employment Period, or in the event that fifty
(50%) percent or more of the voting common stock of the Company shall
be owned by one or more individuals or entities, who are acting in
concert or as part of an affiliated group (other than a group one of
the members of which is you), at any time during the Employment Period,
and this Agreement is terminated by the Company or any successor or
surviving corporation, the term "Designated Date" shall mean the one
(1) year anniversary of the date of such termination; or
(v) subject to the provisions of sub-paragraph
2(b) hereof, in the event this Agreement terminates at the end of the
term of the Employment Period, the term "Designated Date" shall mean
the date of such termination or the twelve (12) month anniversary of
the date of such termination, as the case may be.
It is the desire and intent of the parties that the provisions
of this paragraph 8 shall be enforced to the fullest extent permissible
under the laws and public
5
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any provision of this paragraph 8 shall be adjudicated
to be invalid or unenforceable in any such jurisdiction, such provision
of this paragraph 8 shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion
to apply only with respect to the operation of such provision of this
paragraph 8 in the particular jurisdiction in which such adjudication
is made. In addition, if the scope of any restriction contained in this
paragraph 8 is adjudicated to be too broad to permit enforcement
thereof to its fullest extent, then such restriction shall be enforced
to the maximum extent permitted by law and you hereby consent and agree
that such scope may be judicially modified accordingly in any
proceeding brought to enforce such restriction.
(c) In the event of a breach or threatened breach by you
of the provisions of this paragraph 8, the Company shall be entitled to
an injunction restraining you from such breach. Nothing herein
contained shall be construed as prohibiting the Company from pursuing
any other remedies available for such breach or threatened breach or
any other breach of this Agreement."
Notwithstanding the foregoing restatements of Paragraphs 1, 2,
4 and 8 of the Letter Agreement, all other provisions of such Letter Agreement
shall continue in full force and effect.
6
If the foregoing correctly reflects our understanding, please
so indicate by signing in the space provided. ARISTA INVESTORS CORP.
By: /s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx, Senior Vice President
and Treasurer
Accepted and Agreed to:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
7
