Exhibit 10.11
EMPLOYMENT AGREEMENT
WHEREAS, Goran Capital Inc., and its subsidiaries (collectively, the
"Company") considers it essential to its best interests and the best interests
of its stockholders to xxxxxx the continuous employment of its key management
personnel and, accordingly, the Company desires to employ Xxxxx X. Xxxxx ("You",
"Your"or "Executive"), upon the terms and conditions hereinafter set forth; and
WHEREAS, the Executive desires to continue to be employed by the
Company, upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth below, the parties agree as follows:
1. Employment
1.1 Term of Agreement. The Company agrees to employ Executive as Vice
President and General Counsel, effective as of April 1, 1997 and continuing
until March 31, 1998, unless such employment is terminated pursuant to Section 3
below; provided, however, that the term of this Agreement shall automatically be
extended without further action of either party for additional one (1) year
periods thereafter unless, not later than six (6) months prior to the end of the
then effective term, either the Company or the Executive shall have given
written notice that such party does not intend to extend this Agreement. If
Company gives Executive such a notice of non-renewal, Executive's employment
shall terminate as of the expiration date of this Agreement. It is expressly
understood and agreed that a notice of non-renewal issued by the Company shall
not extinguish the Executive's non-competition obligations pursuant to Section 4
herein.
1.2 Terms of Employment. During the Term, You agree to be a full-time
employee of the Company serving in the position of Vice President and General
Counsel of the Company and further agree to devote substantially all of Your
working time and attention to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities associated with Your
position as Vice President and General Counsel of the Company and to use Your
best efforts to perform faithfully and efficiently such responsibilities.
Executive shall perform such duties and responsibilities as may be determined
from time to time by the Chairman and/or Chief Executive Officer of the Company
and the Board of Directors of the Company, which duties shall be consistent with
the position of Vice President and General Counsel of the Company, which shall
grant Executive authority, responsibility, title and standing comparable to that
of the vice president and general counsel of a stock insurance holding company
of similar standing. Your primary place of work will be at the company's U.S.
headquarters in Indianapolis, Indiana, but it is understood and agreed that your
duties may require travel. In the event you are relocated to another Company
location, the Company agrees to pay for the cost of your move (including
temporary lodging expenses) and to facilitate the sale of your Indianapolis home
so that you will be enabled to purchase
a new home in your new location that is comparable in price to your existing
home and have your family join you at such new location within two (2) months of
your transfer or such other period as is reasonable considering market and
location. Nothing herein shall prohibit You from devoting Your time to civic and
community activities or managing personal investments, as long as the foregoing
do not interfere with the performance of Your duties hereunder.
1.3 Appointment and Responsibility. The Boards of Directors of the
Company shall, following the effective date of this Agreement, elect and appoint
Executive as Vice President and General Counsel. Consistent with Section 1.2 of
this Agreement, Executive shall be primarily responsible for the legal affairs
of the Company.
2. Compensation, Benefits and Prerequisites
2.1 Salary. Company shall pay Executive a salary, in equal bi-weekly
installments, equal to an annualized salary rate of $110,000. Executive's salary
as payable pursuant to this Agreement may be increased from time to time as
mutually agreed upon by Executive and the Company. Notwithstanding any other
provision of this Agreement, Executive's salary paid by Company for any year
covered by this Agreement shall not be less than such salary paid to Executive
for the immediately preceding calendar year. All salary and bonus amounts paid
to Executive pursuant to this Agreement shall be in U.S. dollars.
2.2 Bonus. The Company and Executive understand and agree that the
Company expects to achieve significant growth during the term of this Agreement
and that Executive will make a material contribution to that growth which will
require certain personal and familial sacrifices on the part of Executive.
Accordingly, it is the desire and intention of the Company to reward Executive
for the attainment of that growth through bonus and other means (including, but
not limited to, stock options, stock appreciation rights and other forms of
incentive compensation). Therefore, the Company will pay Executive a lump-sum
bonus (subject to normal withholdings) within thirty (30) business days from
receipt by Company of its consolidated, annual audited financial statements in
an amount which shall be determined in accordance with the following Bonus
Table. All amounts used for calculation purposes in this section shall be based
on the audited, consolidated financial statements of Goran Capital Inc. (or any
successor thereto), with such financial statements having been prepared in
accordance with applicable Generally Accepted Accounting Principles, applied on
a consistent basis with that of prior years.
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BONUS TABLE
If Audited Net % of Annual Salary
Income (as a % of Payable to Executive
Budgeted Net Income) Is As Bonus
Less Than 75% -0-
75% or more, but less than 100% 10%
100% or more, but less than 125% 20%
125% or more 30%
2.3 Employee Benefits. Executive shall be entitled to receive all
benefits and prerequisites which are provided to other Executives of Company
under the applicable Company plans and policies, and to future benefits and
prerequisites made generally available to executive employees of the Company
with duties and compensation comparable to that of Executive upon the same terms
and conditions as other Company participants in such plans.
2.4 Additional Prerequisites. During the term of this Agreement,
Company shall provide Executive with:
(a) Not less than three (3) weeks paid vacation during each calendar
year.
(b) A vehicle commensurate with Executive's position.
(c) A golfing membership at Hillcrest Country Club or other comparable
country club.
2.7 Expenses. During the period of his employment hereunder, Executive
shall be entitled to receive reimbursement from the Company (in accordance with
the policies and procedures in effect for the Company's employees) for all
reasonable travel, entertainment and other business expenses incurred by him in
connection with his services hereunder.
3. Termination of Executive's Employment
3.1 Termination of Employment and Severance Pay. Executive's employment
under this Agreement may be terminated by either party at any time for any
reason; provided, however, that if Executive's employment is terminated for any
reason other than for cause, he shall receive, as severance pay, one (1) month's
current salary for each full and partial year of service. Further, if Executive
shall be terminated without cause, receipt of severance payments described in
the preceding sentence are conditioned upon execution by Executive and the
Company of that mutual Waiver and Release attached hereto as Exhibit A. Further,
Executive shall receive severance pay
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in accordance with this Section 3.1 if Executive shall terminate this Agreement
due to a breach thereof by the Company or if Executive is directed by the
Company (including, if applicable, any successor) to engage in any act or action
constituting fraud or any unlawful conduct relating to the Company or its
business as may be determined by application of applicable law.
3.2 Cause. For purposes of this Section 3, "cause" shall mean:
(a) the Executive being convicted in the United States of America,
any State therein, or the District of Columbia, or in Canada
or any Province therein (each, a "Relevant Jurisdiction"), of
a crime for which the maximum penalty may include imprisonment
for one year or longer (a "felony") or the Executive having
entered against him or consenting to any judgment, decree or
order (whether criminal or otherwise) based upon fraudulent
conduct or violation of securities laws;
(b) the Executive's being indicted for, charged with or otherwise
the subject of any formal proceeding (criminal or otherwise)
in connection with any felony, fraudulent conduct or violation
of securities laws, in a case brought by a law enforcement or
securities regulatory official, agency or authority in a
Relevant Jurisdiction;
(c) the Executive engaging in fraud, or engaging in any unlawful
conduct relating to the Company or its business, in either
case as determined under the laws of any Relevant
Jurisdiction;
(d) the Executive breaching any provision of this Agreement; or
(e) gross negligence or willful misconduct by the Executive in the
performance of his duties hereunder.
3.3 Change of Control. Notwithstanding any other provisions of this
Agreement, if (i) a Change of Control shall occur; and (ii) within twelve (12)
months of any such Change of Control, Executive (a) receives a Notice of
Non-Renewal, (b) is terminated for any reason other than for cause, or (c)
Company (including its successors, if any) is in breach of this Agreement, then
Executive shall continue to receive his current salary (in bi-weekly payments)
until the earlier to occur of:
(a) Executive shall commence employment with a firm or entity
other than the Company such that his base salary is at or
greater than existing base salary pursuant to this Agreement;
or
(b) The expiration of seventy-eight (78) weeks from Executive's Date of
Termination.
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The receipt by Executive of payment pursuant to this Section 3.3 is specifically
conditioned, and no payments pursuant to this Section 3.3 shall be made to
Executive if he is, at the time of his Termination, in breach of any provision
(specifically including, but not limited to, the provisions of this Agreement
pertaining to non-competition and confidentiality) of this Agreement and,
further, if such payments have already begun, the continuation of payments to
Executive pursuant to this Section 3.3 shall cease at the time Executive shall
fail to comply with the non-competition and confidentiality provisions of
Article 4 herein. It is expressly understood and agreed that the amount of any
payment to Executive required pursuant to this Section 3.3 shall be reduced (but
not below zero) by any compensation received by Executive during the period
called for in this Section 3.3.
A Change of Control shall mean the inability of the Xxxxxx family to
cause the election of a majority of the members of the Board of Directors of
Goran Capital Inc., Xxxxxx International Group, Inc. or their respective
successors.
3.4 Disability. So long as otherwise permitted by law, if Executive has
become permanently disabled from performing his duties under this Agreement, the
Company's Chairman of the Board, may, in his discretion, determine that
Executive will not return to work and terminate his employment as provided
below. Upon any such termination for disability, Executive shall be entitled to
such disability, medical, life insurance, and other benefits as may be provided
generally for disabled employees of Company during the period he remains
disabled. Permanent disability shall be determined pursuant to the terms of
Executive's long term disability insurance policy provided by the Company. If
Company elects to terminate this Agreement based on such permanent disability,
such termination shall be for cause.
3.5 Indemnification. Executive shall be indemnified by Company (and,
where applicable, its subsidiaries) to the maximum extent permitted by
applicable law for actions undertaken for, or on behalf of, the Company and its
subsidiaries.
4. Non-Competition, Confidentiality and Trade Secrets
4.1 Noncompetition. In consideration of the Company's entering into
this Agreement and the compensation and benefits to be provided by the Company
to You hereunder, and further in consideration of Your exposure to proprietary
information of the Company, You agree as follows:
(a) Until the date of termination or expiration of this Agreement
for any reason (the "Date of Termination") You agree not to
enter into competitive endeavors and not to undertake any
commercial activity which is contrary to the best interests of
the Company or its affiliates, including, directly or
indirectly, becoming an employee, consultant, owner (except
for passive investments of not more than one percent (1%) of
the outstanding shares of, or any other equity interest in,
any company or entity listed or traded on a
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national securities exchange or in an over-the-counter
securities market), officer, agent or director of, or
otherwise participating in the management, operation, control
or profits of (a) any firm or person engaged in the operation
of a business engaged in the acquisition of insurance
businesses or (b) any firm or person which either directly
competes with a line or lines of business of the Company
accounting for five percent (5%) or more of the Company's
gross sales, revenues or earnings before taxes or derives five
percent (5%) or more of such firm's or person's gross sales,
revenues or earnings before taxes from a line or lines of
business which directly compete with the Company.
Notwithstanding any provision of this Agreement to the contrary, You
agree that Your breach of the provisions of this Section 4.1(a) shall permit the
Company to terminate Your employment for cause.
(b) If Your employment is terminated by You, or by reason of Your
Disability, by the Company for cause, or pursuant to a notice
of non-renewal as outlined in Section 1.1, then for two (2)
years after the Date of Termination, You agree not to become,
directly or indirectly, an employee, consultant, owner (except
for passive investments of not more than one percent (1%) of
the outstanding shares of, or any other equity interest in,
any company or entity listed or traded on a national
securities exchange or in an over-the-counter securities
market), officer, agent or director of, or otherwise to
participate in the management, operation, control or profits
of, any firm or person which directly competes with a business
of the Company which at the Date of Termination produced any
class of products or business accounting for five percent (5%)
or more of the Company's gross sales, revenues or earnings
before taxes at which the Date of Termination derived five
percent (5%) or more of such firm's or person's gross sales,
revenues or earnings before taxes. It is expressly agreed and
understood that this Section 4.1(b) shall not apply to a
public accounting or consulting firm.
(c) You acknowledge and agree that damages for breach of the
covenant not to compete in this Section 4.1 will be difficult
to determine and will not afford a full and adequate remedy,
and therefore agree that the Company shall be entitled to an
immediate injunction and restraining order (without the
necessity of a bond) to prevent such breach or threatened or
continued breach by You and any persons or entities acting for
or with You, without having to prove damages, and to all costs
and expenses (if a court or arbitrator determines that the
Executive has breached the covenant not to compete in this
Section 4.1, including reasonable attorneys' fees and costs,
in addition to any other remedies to which the Company may be
entitled at law or in equity. You and the Company agree that
the provisions of this covenant not to compete are reasonable
and necessary for the operation of the Company and its
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subsidiaries. However, should any court or arbitrator
determine that any provision of this covenant not to compete
is unreasonable, either in period of time, geographical area,
or otherwise, the parties agree that this covenant not to
compete should be interpreted and enforced to the maximum
extent which such court or arbitrator deems reasonable.
4.2 Confidentiality. You shall not knowingly disclose or reveal to any
unauthorized person, during or after the Term, any trade secret or other
confidential information (as outlined in the Indiana Uniform Trade Secrets Act)
relating to the Company or any of its affiliates, or any of their respective
businesses or principals, and You confirm that such information is the exclusive
property of the Company and its affiliates. You agree to hold as the Company's
property all memoranda, books, papers, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company and its
affiliates, whether made by You or otherwise coming into Your possession and, on
termination of Your employment, or on demand of the Company at any time, to
deliver the same to the Company.
Any ideas, processes, characters, productions, schemes, titles, names,
formats, policies, adaptations, plots, slogans, catchwords, incidents,
treatment, and dialogue which You may conceive, create, organize, prepare or
produce during the period of Your employment and which ideas, processes, etc.
relate to any of the businesses of the Company, shall be owned by the Company
and its affiliates whether or not You should in fact execute an assignment
thereof to the Company, but You agree to execute any assignment thereof or other
instrument or document which may be reasonably necessary to protect and secure
such rights to the Company.
5. Miscellaneous
5.1 Amendment. This Agreement may be amended only in writing, signed by
both parties.
5.2 Entire Agreement. This Agreement contains the entire understanding
of the parties with regard to all matters contained herein. There are no other
agreements, conditions or representations, oral or written, expressed or
implied, with regard to the employment of Executive or the obligations of the
Company or the Executive. This Agreement supersedes all prior employment
contracts and non-competition agreements between the parties.
5.3 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be delivered either in person or by certified or
registered mail, return receipt requested.
Any notice by mail shall be addressed as follows:
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If to the Company, to:
Chief Executive Officer
Goran Capital Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: President and Chief Executive Officer
If to Executive, to:
Xxxxx X. Xxxxx
0000 Xxxxxxxxxxx Xxxx
XxXxxxxxxxxx, Xxxxxxx 00000
or to such other addresses as one party may designate in writing to the other
party from time to time.
5.4 Waiver of Breach. Any waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
5.5 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
5.6 Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Indiana, without giving effect to
conflict of law principles.
5.7 Headings. The headings of articles and sections herein are included
solely for convenience and reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
5.8 Counterparts. This Agreement may be executed by either of the
parties in counterparts, each of which shall be deemed to be an original, but
all such counterparts shall constitute a single instrument.
5.9 Survival. Company's obligations under Section 3.1 and Executive's
obligations under Section 4 shall survive the termination and expiration of this
Agreement in accordance with the specific provisions of those Paragraphs and
Sections and this Agreement in its entirety shall be binding upon, and inure to
the benefit of, the successors and assigns of the parties hereto.
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5.10 Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by You and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
subsequent time.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.
GORAN CAPITAL INC. AND SUBSIDIARIES
("Company")
By:__________________________________
Title:_______________________________
State of Indiana )
) SS:
County of __________)
Before me the undersigned, a Notary Public for _______________ County,
State of Indiana, personally appeared ______________________________, and
acknowledged the execution of this instrument this _______ day of
___________________, 1997.
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,Notary Public
State of Indiana
My Commission Expires:______________
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XXXXX X. XXXXX
("Executive")
---------------------------------------
State of Indiana )
) SS:
County of __________)
Before me the undersigned, a Notary Public for _______________ County,
State of Indiana, personally appeared ______________________________, and
acknowledged the execution of this instrument this _______ day of
___________________, 1997.
-------------------------------
, Notary Public
State of Indiana
My Commission Expires:_________________
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