Exhibit 10.1
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT made as of the 29th day of July, 1998, by and between
Xxxxxxx Xxxxxx ("Employee") and PennCorp Financial Group, Inc., a Delaware
corporation ("Company"):
WHEREAS, Employee has served as Senior Vice President, Senior Financial
Officer and Chief Actuary of the Company; and
WHEREAS, Employee and Company are parties to the Executive Retention
Agreement, entered into on November __, 1997 (the "Agreement"); and
WHEREAS, Employee's employment with Company has been terminated by Company
without Cause (within the meaning provided in the Agreement); and
WHEREAS, Employee and Company mutually acknowledge and agree that Employee
will receive the payments and benefits provided for under Sections 3.1 and 3.3
of the Agreement by reason of the Company's termination of Employee's employment
with Company without Cause; and
WHEREAS, Company and Employee desire to provide for the consequences of
such termination, to settle all claims, if any, between Employee and Company,
its affiliates, directors, officers and employees for all matters relating to or
arising out of such employment and the termination thereof and to provide for
the continuing relationship between the parties during the period set forth
below.
NOW THEREFORE, for good and valuable consideration, receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
1. (a). Employee's employment with the Company will terminate as of the
close of business on Wednesday, July 29, 1998.
(b). Employee represents and warrants to the Company that during the
course of his employment with the Company (i) he has not committed any act of
fraud, willful misconduct or gross negligence and (ii) to the best of his
knowledge and belief no person under his general supervision committed any act
of fraud, willful misconduct or gross negligence.
2. Company shall pay Employee 25% of the amounts specified in Paragraphs
"a" and "b" of Section 3.1 and Section 3.3 (as amended by Paragraph 5 hereof) of
the Agreement on or before July 31, 1998, 25% on August 17, 1998, and the final
50% on or before March 31, 1999; provided that the Company has substantially
performed and met its obligations hereunder, the Company shall not be bound to
make the 50% payment on March 31, 1999 unless Employee has substantially
performed all his obligations under
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this Amendment Agreement; and pay (i) upon submission of an expense report to
the Company, accrued and unpaid reasonable business expenses incurred by
Employee prior to the Termination Date, in accordance with Company's policy and
(ii) Employee's retirement and welfare benefits accrued, vested and unpaid prior
to the Termination Date. For purposes of determining the amount due Employee
pursuant to paragraph "b" of Section 3.1 and Section 3.3 of the Agreement,
Employee's annual base salary rate during 1996 and 1997 was $225,000 and during
1998 was $250,000; and Employee's annual incentive bonus for 1996 and 1997 was
$150,000 and $118,000, respectively.
3. In exchange for the Company's undertakings in this Amendment Agreement,
Employee for himself and for his heirs, executors, administrators and assigns
(hereinafter referred to collectively as "Releasors"), forever releases and
discharges Company and any of its subsidiaries, divisions, affiliates or related
business entities, successors and assigns and any of its or their past or
present shareholders, directors, officers, attorneys, agents, trustees,
administrators, employees or assigns (whether acting as agents for Company or in
their individual capacities) (hereinafter referred to collectively as
"Releasees"), for any and all claims, demands, causes of action, fees and
liabilities of any kind whatsoever, whether known or unknown, which Releasors
ever had, now have or may have against Releasees for any reason from the
beginning of time through the date hereof except for Company's undertakings in
this Amendment Agreement. In the event that Company does not timely pay the
amounts that are owed pursuant to the provisions set forth in Paragraph 2
herein, the release provided for in this Paragraph 3 shall be rendered
unenforceable.
4. In exchange for Employee's undertakings in this Amendment Agreement, the
Company for itself and its subsidiaries, divisions, affiliates or related
business entities, successors and assigns and any of its or their past or
present shareholders, directors, officers, attorneys, agents, trustees,
administrators, employees or assigns (hereinafter referred to collectively as
"Employee's Releasees"), forever releases and discharges Employee and his heirs,
executors, administrators and assigns from any and all claims, demands, causes
of action, fees and liabilities of any kind whatsoever, whether known or
unknown, which Employee's Releasees ever had, now have or may have against
Employee for any reason from the beginning of time through the date hereof;
provided, however, that this Amendment Agreement shall not release claims for
breach of the representations set forth in Paragraph 1 of this Amendment
Agreement or for fraud, gross negligence or willful misconduct.
5. Sections 1. (except for the definitions of "Annual Pay" and "Code"), 2.,
3.2, 3.4 and 9. of the Agreement are terminated as no longer applicable;
Paragraphs "a" and "b" of Section 3.1 and Section 3.3 of the Agreement are
incorporated in and modified by the provisions of this Amendment Agreement; and
the definitions of "Annual Pay" and "Code" in Section 1, Paragraphs "c", "d" and
"f" of Section 3.1 and Sections 4. through 11. of the Agreement are incorporated
herein without modification.
(a). In lieu of the full time employment during a Transition Period as
provided in Section 3.3 of the Agreement, Employee shall render consulting
services on a
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full-time (generally, a 40 hour week) basis to Company commencing on the
Termination Date and ending 61 calendar days thereafter (such period shall be
referred to as the "Transition Period"). During the Transition Period, Company
shall pay Employee at the rate of $5,000 per week. During the Transition Period,
Employee shall be assigned such duties and responsibilities as the Chairman of
the Executive Committee reasonably and in good faith requests and Employee,
having been a Senior Vice President and Chief Actuary of the Company over many
years, has the knowledge, experience and qualifications to perform, including,
but not limited to, the orderly transfer of his duties to his successor, and
special projects (e.g., participating in the selling of one or more of the
Company's subsidiaries and representing Company in connection with examinations
by Departments of Insurance and other governmental or regulatory agencies.
During the Transition Period, Employee shall be provided with the office,
secretarial support and other facilities provided to Employee at the time of the
execution of this Amendment Agreement.
(b). In lieu of the casual employment during a Consulting Period as
provided in Section 3.3 of the Agreement, Employee shall render consulting
services on a casual basis to Company commencing on the day after the end of the
Transition Period and ending one year thereafter (such period being referred to
as the "Consulting Period"). Employee's duties during the Consulting Period are
to be reasonably reachable by the Chairman of the Executive Committee or current
Chair of the Operating Committee by telephone, facsimile and letter; to respond
reasonably promptly when contacted; and when reasonably convenient to meet with
one or more representatives of the Company, to discuss matters of the Company
with which he was, is, or becomes, familiar, and which lie within his areas of
responsibility during the years of his employment with the Company. Employee
will not be paid additional compensation during the Consulting Period other than
amounts called for in Section 3.3 of the Agreement (which amounts are included
in the payments set forth in subparagraph a of Paragraph 2, hereof); provided
his reasonable out-of-pocket expenses for complying with his duties shall be
reimbursed by the Company against and upon presentation of vouchers therefore.
Employee shall have the right to obtain new employment during the Consulting
Period, Employee's consulting services hereunder shall be secondary to any new
employment and Employee shall not be obligated in any way to disclose any
propriety or non-public information regarding his then current employer.
(c). During the Transition Period and the Consulting Period, Employee
shall have no decision-making authority. Employee shall be promptly reimbursed
for all out-of-pocket expenses incurred by Employee during the Transition Period
and the Consulting Period, subject to documentation in accordance with policies
of the Company. Employee shall not be liable to Company for any damages arising
from any act or omission of Employee during the Transition Period and the
Consulting Period except acts or omissions which would constitute fraud, gross
negligence or willful misconduct.
6. (a). Employee agrees following execution of this Amendment Agreement not
to disparage or induce or encourage others to disparage the Company, its
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services, its products or any of its current or former affiliates, members,
officers, directors, employees or agents.
(b). Company (and its subsidiaries and affiliates and employees
and directors of such entities) agree following execution of this Amendment
Agreement not to disparage or induce or encourage others to disparage Employee
or his reputation as an actuarial professional.
7. Employee shall not be obligated to secure new employment or take any
other action by way of mitigation of the amounts payable to him under the
provisions of this Amendment Agreement and the Agreement. Amounts payable to
Employee hereunder and thereunder shall not be reduced by any compensation he
may receive from a subsequent employer.
8. With respect to the $310,380 non-recourse Promissory Note, dated
September 8, 1997, from Employee to Company (the "1997 Note"), because the
termination of Employee's employment with Company was not voluntary, the
principal on the 1997 Note, together with accrued interest thereon shall
continue to be due and payable on the earlier of (a) September 8, 2002, (b) the
date on which the stock which secures the 1997 Note is sold or otherwise
disposed of by Employee, (c) the date on which an Event of Default under the
Stock Pledge Agreement, dated September 8, 1997, or (d) the date on which
Employee and company mutually agree, in a writing duly signed by both.
9. Employee acknowledges that Employee is required to return to Company and
retain no copies at the end of the Transition Period all documents and
information ever compiled by, or furnished to Employee regarding Company's
business affairs, including without limitation, any memos, electronic discs or
drives, letters and reports and all material of whatever and description related
to any of Company's business affairs. The Company shall take reasonable best
efforts to maintain documents and information returned to the Company by the
Employee pursuant to this Paragraph with the Company's records over normal
retention periods (at least three years). Employee may keep the following
Company items currently in his possession: the laptop computer and software
contained therein to the extent permitted under the license from such software,
the fax machine currently located in Employee's home, and the laser printer
currently located in his office.
10. Employee acknowledges that in the course of Employee's employment with
Company Employee has received information concerning Company which is not
publicly available or which constitutes trade secrets or is otherwise
confidential in nature (collectively called "Confidential Information").
(a). Employee covenants and agrees that, except with the express
written permission of the Company or as required by law or in response to
inquiries from any governmental authority (which he shall not hereafter directly
or indirectly initiate), he will not disclose or discuss Confidential
Information of the Company or disseminate
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any opinions relating to that Confidential Information. Employee agrees that all
Confidential Information shall remain the sole and absolute property of the
Company. Employee represents that he has not in the past disclosed Confidential
Information, except on those occasions where he may have been required to do so
in the course of performing his duties to the Company, to any person, entity or
government authority without the prior permission or approval o the Company.
Except as provided herein, Employee agrees not to use, disclose, disseminate,
publish, reproduce or otherwise make available such Confidential Information to
any person, firm, corporation or other entity.
"Confidential Information" shall mean all documents, materials, knowledge,
or information of any nature whatsoever disclosed to or developed by Employee or
to which he had access as a result of his employment with the Company, and which
was not publicly available information. Such Confidential Information shall
include but not be limited to technical and business information and strategies,
relating to inventions, research and development, engineering, products,
designs, manufacturing methods, systems, improvements, trade secrets, formulas,
processes, marketing, merchandising, selling, licensing, servicing, customer
lists, records, financial, accounting or actuarial information, manuals or the
Company strategic plans or operational objectives.
(b). If Employee receives any inquiry or service of process from any
person, entity or governmental authority which on its face requires him to
disclose Confidential Information, Employee shall promptly and before disclosure
give notice of same to the Company.
(c). Company agrees that it shall promptly disclose to Employee any
subpoena or written inquiry relating directly to matters within the employment,
including the Transition Period, duties or responsibilities of Employee.
(d). Company and Employee will use their best efforts to cooperate,
when possible, in responding to any subpoena or inquiry relating directly to
matters within the employment duties or responsibilities of Employee.
(e). Employee shall continue to comply with all applicable laws
relating to trade secrets, confidential information or unfair competition.
11. Employee agrees that the covenant set forth in Paragraph 10 was a
material inducement for the Company to enter into this Agreement and that any
breach of such covenant would cause the Company irreparable injury and damage.
Employee further agrees that in the event of such a breach, the damages would be
difficult to ascertain and, therefore, if said breach is established, in
addition to any other right or remedy which the Court may award (including, but
not limited to damages and attorneys' fees), Company shall be entitled to obtain
an award of appropriate injunctive relief without the positing of any bond or
security, enjoining or restraining any violation or threatened violation of such
covenants, and Employee hereby consents to the issuance of such an injunction.
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12. Employee shall not for a period of two years commencing on the
Termination Date, without the consent of Company, solicit or cause any entity of
which he is affiliated to solicit any person who was a full-time employee or
agent of Company or any of its subsidiaries or affiliates on the Termination
Date or within 12 months prior to the Termination Date.
13. Company shall indemnify Employee (and Employee's legal representatives
or other successors), against all liabilities, costs, charges and expenses
whatsoever incurred or sustained by Employee (or Employee's legal
representatives or other successors) in connection with any threatened, pending
or completed action, suit or proceeding to which Employee (and Employee's legal
representatives or other successors) may be made a party or may be threatened to
be made a party by reason of Employee being or having been a director, officer,
employee, consultant or agent of the Company or any of its subsidiaries or
having served as the request of the company or any of its subsidiaries as a
director, officer, employee, consultant or agent of another corporation,
partnership, joint venture, trust or other enterprise to the fullest extent
permitted under the Company's by-laws as in effect on the date hereof; provided,
however, that the Employee shall not be entitled to indemnification for any
conduct constituting willful misconduct, gross negligence or fraud as determined
by a court having jurisdiction to hear and determine actions for
indemnification, or for claims by the Company against Employee for breach of the
representations in Paragraph 1 of this Amendment Agreement.
14. Company's rights and obligations under this Amendment Agreement and the
Agreement shall inure to, and be binding upon any successor to the business or
to substantially all the assets of Company, whether by merger, purchase of stock
or assets or otherwise, and such successor shall expressly assume such
obligations.
15. Employee acknowledges that: (i) he has carefully read this Amendment
Agreement in its entirety; (ii) he has had an opportunity to consider fully the
terms of this Amendment Agreement; (iii) he has been advised by an attorney of
his choosing in connection with this Amendment Agreement; (iv) he fully
understands the significance of all the terms and conditions of this Amendment
Agreement; (v) he has discussed it with his independent legal counsel, or has
had a reasonable opportunity to do so; (vi) he has had answered to his
satisfaction any questions he has asked with regard to the meaning and
significance of any of the provisions of this Amendment Agreement; and (vii) he
is signing this Amendment Agreement voluntarily and of his own free will and
assents to all the terms and conditions contained herein.
16. This Amendment Agreement may be executed in one or more counterparts,
each of which together shall constitute one and the same agreement.
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WHEREFORE, the parties hereto have caused this Amendment Agreement and to
be signed as of the day and date first written above.
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
PENNCORP FINANCIAL GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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