EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 19th day
of September, 1997, by and between AMVESTORS FINANCIAL CORPORATION
(hereinafter referred to as "AmVestors"), AMERICAN INVESTORS LIFE INSURANCE
COMPANY, INC. (hereinafter referred to as "American"), AMVESTORS INVESTMENT
GROUP, INC. and AMERICAN INVESTORS SALES GROUP, INC., all Kansas corporations
(the latter three hereinafter collective referred to as "Affiliates"),
parties of the first part (hereinafter referred to as "Companies"), and XXXX
X. XXXXX (hereinafter referred to as "Xx. Xxxxx"), an individual, party of
the second part. AmerUs Life Holdings, Inc., an Iowa corporation
(hereinafter referred to as "ALH") joins this Agreement for the purposes set
forth herein.
WITNESSETH:
WHEREAS, Xx. Xxxxx has been employed for many years by AmVestors and
its affiliates and has been employed since 1986 as President and General
Counsel of the Board of AmVestors and as Chairman and General Counsel of
American since 1988; and
WHEREAS, Xx. Xxxxx has also been employed by, associated with or has
acted as a consultant to, and may in the future, at the request of AmVestors,
be
employed by, associated with or act as a consultant to, the affiliates of
AmVestors; and
WHEREAS, as of the Effective Date (as defined in Section 3 hereof)
AmVestors shall have been acquired by ALH as described in that certain Agreement
and Plan of Merger dated September 19th, 1997 (hereinafter referred to as
"Merger Agreement");
WHEREAS, ALH desires for the Company to continue to have the benefit
of Xx. Xxxxx'x knowledge and experience and considers such a vital element in
protecting and enhancing the best interests of ALH and its shareholders and
in providing management for AmVestors.
NOW, THEREFORE, in consideration of the mutual agreements and
conditions contained herein, the parties hereto agree as follows:
1. FULL-TIME EMPLOYMENT OF EXECUTIVE.
a. DUTIES AND STATUS.
(1) AmVestors hereby employs Xx. Xxxxx as its President and
Chief Executive Officer and American hereby employs Xx. Xxxxx as its President
and Chief Executive Officer to provide certain services set forth herein and to
provide certain other employment services to affiliates for the employment
period as defined in paragraph 3(a), and Xx. Xxxxx accepts such employment, on
the terms and conditions set forth in this Agreement. During the employment
period, Mr.
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Xxxxx shall perform such managerial duties and responsibilities for
AmVestors and affiliates as may be assigned to him in accordance with the
bylaws.
(2) During the employment period, Xx. Xxxxx shall devote
his full time and efforts to the business of AmVestors and its affiliates and
shall not engage in consulting work or any trade or business for his own
account or for or on behalf of any other person, firm or corporation which
competes, conflicts or interferes with the performance of his duties
hereunder in any way. Xx. Xxxxx shall be entitled to reasonable vacations and
to such personal and sick leave as may be established by AmVestors' and
affiliates corporate policies. Xx. Xxxxx shall perform his duties while
employed in good faith and shall observe faithfully the covenants and
agreements made by him herein.
b. COMPENSATION AND GENERAL BENEFITS.
(1) During the employment period, AmVestors shall pay Xx.
Xxxxx a base salary to be established annually by the Board of Directors,
payable in twice monthly installments (or on such other basis as may be mutually
agreed upon). The salary shall be reviewed annually by the Board of Directors
and may be increased, but not diminished, during the employment period.
(2) In addition to the salary provided by subparagraph (1)
of this paragraph 1(b), AmVestors and affiliates shall provide benefits and
other perquisites reasonably comparable to, and no less favorable than, those
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provided by AmVestors and its affiliates to Xx. Xxxxx during 1997, including,
but not limited to, an automobile suitable for the business and personal use of
Xx. Xxxxx.
(3) Attached hereto is a copy of a letter from ALH setting
forth the compensation and general benefits to be payable to Xx. Xxxxx during
the employment period. ALH guarantees performance by the Company of its
obligations under this paragraph 1(b) throughout the entire term of this
Agreement.
2. COMPETITION: CONFIDENTIAL INFORMATION.
The parties recognize that, due to the nature of Xx. Xxxxx'x prior
association with the Companies and of his engagement hereunder, and as a
consequence of his relationship to Companies, both in the past and in the
future, Xx. Xxxxx has had access to and has acquired, and has assisted in and
may assist in developing confidential and proprietary information relating to
the business and operations of the Companies. Xx. Xxxxx recognizes that such
information has been and will continue to be of central importance to the
business of the Companies and that disclosure of such information to others or
its use by others could cause substantial irreparable loss to the Companies.
Xx. Xxxxx and Companies also recognize that an important part of Xx. Xxxxx'x
duties will be to develop good will for the Companies through his personal
contact with others having business relationships with Companies and within the
insurance industry, and that there is a danger that this good will, a
propri-
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etary asset of the Companies, may follow him if and when his relationship
with the Companies is terminated. Xx. Xxxxx accordingly agrees as follows:
a. NON-COMPETITION DURING EMPLOYMENT PERIOD. During the
employment period he will not directly or indirectly, either individually or as
owner, partner, agent, employee, consultant or otherwise, except for the account
of and on behalf of Companies, engage in any activity competitive with the
business of Companies, nor will he be in competition with Companies, solicit or
otherwise attempt to establish any business relationships with any person, firm
or corporation which was, at any time during the employment period, a customer
or supplier of Companies. However, nothing in this Section 2 shall be construed
to prevent him from owning, as an investment, up to one percent (1%) of a class
of equity securities issued by any competitor of Companies.
b. NON-COMPETITION AFTER PERIOD OF EMPLOYMENT. Xx. Xxxxx
agrees that during the term of this Agreement and for a period of two years
following termination of this Agreement, if payments are being made to Xx. Xxxxx
pursuant to paragraph 3.c., he will not, without the Companies prior written
permission, attempt to entice away from the Companies or affiliates or
subsidiaries on behalf of any party whatsoever, or employ or otherwise engage,
contract with or retain directly or indirectly; (i) any employee then employed
by the Companies, affiliates or subsidiaries or employed by them at any time
during the previous two (2)
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years; or (ii) any individual or entity under engagement by the Companies
during the previous two yeas, by contract or otherwise, for the purpose of
marketing, distributing or selling insurance and annuity products or
developing clients or customers on behalf of the Companies. Xx. Xxxxx further
agrees that during such period (if such payments are being made), he will not
do anything to impair the Companies or their affiliates or subsidiaries'
prospects of sales or business retention, and shall not solicit for any
reason any of the Companies or its employees, agency personnel, insureds or
applicants, nor knowingly accept commissions directly or indirectly on any
policy written in replacement of any policy produced or written by the
Companies or any of their affiliates or subsidiaries nor shall Xx. Xxxxx in
any way derogate the Companies, its products or personnel.
c. CONFIDENTIAL INFORMATION. Xx. Xxxxx will not disclose any
confidential information of Companies which is now known to him or which
hereafter may become known to him as a result of his employment or association
with Companies and shall not at any time directly or indirectly disclose any
such information to any person, firm or corporation, or use the same in any way
other than in connection with the business of Companies and at all times after
the expiration of the employment period.
d. COMPANIES' REMEDIES FOR BREACH. It is recognized that
damages in the event of breach of this Section 2 by Xx. Xxxxx would be
difficult, if
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not impossible, to ascertain and it is, therefore, agreed that each of the
Companies, in addition to and without limiting any other remedy or right it
may have, shall have the right to an injunction or other equitable relief in
any court of competent jurisdiction, enjoining any such breach, and Xx. Xxxxx
hereby waives any and all defenses he may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief. The existence of this right shall not preclude Companies
from pursuing any other rights and remedies at law or in equity which
Companies may have.
3. EMPLOYMENT PERIOD.
a. DURATION. The employment period shall commence on the date
of the closing of the acquisition of AmVestors as described in the Merger
Agreement (the "Effective Date") and shall end on December 31, 2000 unless
otherwise terminated as provided in this Agreement.
b. PERFORMANCE AND TERMINATION. Subject to the performance of
the covenants and agreements made by Companies herein, Xx. Xxxxx shall perform
his duties during the employment period in good faith and will observe
faithfully the covenants and agreements made by him herein. Xx. Xxxxx shall not
be discharged during the employment period except for cause involving
dishonestly, moral turpitude, or material breach of any express or implied
condition under this
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Agreement. The discharge of Xx. Xxxxx for reasons other than those specified
in the preceding sentence shall be deemed to be a discharge without cause.
c. XX. XXXXX'X REMEDIES. If the Companies shall take any
action with respect to Xx. Xxxxx'x employment as set forth in paragraph 3(d)
thereby entitling him to terminate his employment as provided in paragraph 3(d),
or discharges him without cause then Xx. Xxxxx shall be entitled to be paid a
sum equal to two (2) years salary based on the base salary level in effect on
the date of termination or discharge. Payments shall be made bimonthly in 48
equal installments and shall commence on the effective date of discharge or
termination. The parties agree that, the payments provided hereunder shall be
deemed to constitute payment for the non-compete provisions contained in
paragraph 2(b) and not a penalty for breach by Companies and Companies agree
that Xx. Xxxxx shall not be required to mitigate his damages. This paragraph
shall constitute Xx. Xxxxx'x sole remedy for compensation upon the cessation of
his employment and/or breach of this Agreement.
In the event Xx. Xxxxx materially violates the non-compete provisions
of paragraph 2(b) after his employment has ceased then Companies shall have the
right to cease all payments required under the provisions of paragraph 3(c).
d. TERMINATION FOR GOOD REASON. Xx. Xxxxx shall be entitled to
terminate his employment for good reason. Any termination of employ-
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ment under the following circumstances shall be for good reason and shall be
deemed to be a breach of this Agreement by the Companies:
(1) Without the express written consent of Xx. Xxxxx, he is
assigned any duties inconsistent with his positions, duties, responsibilities
and status with the Companies since the Effective Date, or his reporting
responsibilities, titles or offices as in effect during the period of this
Agreement are changed or he is removed from or not reelected to any of such
positions, except in connection with the termination of his employment for
cause, or as a result of his substantial disability or death;
(2) The annual base salary of Xx. Xxxxx as in effect on the
Effective Date, as the same hereafter may be increased from time to time, is
reduced; or
(3) Any of the Companies require Xx. Xxxxx without his
agreement to be based anywhere other than the Topeka offices except for required
travel on Companies' business to an extent substantially consistent with his
business travel obligations in effect immediately prior to the date of this
Agreement.
4. DEATH OR DISABILITY.
In the event Xx. Xxxxx shall become so disabled during the term
of this Agreement that he is unable to reasonably perform his duties for a
period of ninety 90 days, either Xx. Xxxxx or AmVestors and its Affiliates shall
have the
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right to terminate this Agreement upon written notice given at the end
of such ninety (90) days period; provided that, at the time of delivery of such
notice, such disability shall be continuing. In the event of a disagreement
between Companies and/or Xx. Xxxxx regarding the question of whether Xx. Xxxxx
is disabled as defined herein, the question shall be referred to the Companies
physician whose decision will be conclusive and binding. In the event of
termination for disability, Xx. Xxxxx shall be entitled to receive as a
settlement of this contract, an annual sum equal to the annual base salary as
such may be increased from time to time which shall be payable semimonthly, for
a period of three (3) years from the date of termination. If Xx. Xxxxx dies
during the term of this Agreement, and his employment has been terminated as a
result of disability his estate or beneficiary shall receive the remaining
payments under this paragraph payable semimonthly. There shall be no further
obligations on the part of the Companies under this Agreement.
5. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Kansas.
6. BINDING EFFECT. This Agreement shall be binding upon the parties
hereto, their successors, assigns, heirs, legatees and personal representatives.
7. ASSIGNABILITY. This Agreement shall not be assignable by the
Companies, nor may his duties hereunder be delegated by Xx. Xxxxx.
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8. NOTICES. Any notice required or desired to be given under this
Agreement shall be sent by certified mail to Xx. Xxxxx'x resident in Topeka,
Kansas and to AmVestors or its Affiliates at their principal place of business
in Topeka, Kansas.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements (including the Employment Agreement between
Companies and Xx. Xxxxx dated April 1, 1997), proposals and other
communications, oral or written, between the parties hereto relating to such
subject matter.
10. SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any circumstances shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term of provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable any remaining terms or
provisions of this Agreement or the application of such term or provision to
circumstances other than those as to which it is invalid or unenforceable. To
the extent permitted by applicable law, the parties hereto hereby waive any
provision of law that renders any term or provision of this Agreement invalid or
unenforceable in any respect.
11. INTENT OF AGREEMENT. The Companies intend by this Agreement to
provide for the employment of Xx. Xxxxx. While this Agreement provides
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for Xx. Xxxxx'x employment, this Agreement shall in no manner ever be deemed
or construed as limiting the power of stockholders to elect Xx. Xxxxx as a
director of Companies or limiting the power of the Companies to elect its
Chairman or officer(s). In like manner, if stockholders or some future Board
of Directors of the Companies shall not reelect Xx. Xxxxx, such failure to so
elect Xx. Xxxxx shall not be deemed or considered as a condition precedent to
the continued obligation of the Companies to pay Xx. Xxxxx the compensation
as provided for in this Agreement.
12. RECOVERY OF LEGAL FEES, COSTS AND EXPENSES. In the event that
Xx. Xxxxx is terminated by the Companies and Xx. Xxxxx retains legal counsel to
commences legal action, the costs and expenses, including legal fees shall be
paid by the Companies or their affiliates in the event Xx. Xxxxx prevails in
such action either by verdict or judgment. In the event Xx. Xxxxx prevails as
defined above, the Companies or their affiliate shall pay the reasonable
attorney fees, costs and expenses within thirty (30) days after the conclusion
of the litigation.
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IN WITNESS WHEREOF, the parties hereto have signed this Employment
Agreement the day and year first above written.
PARTIES OF THE FIRST PART:
AMVESTORS FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxx X. Xxxxxx, Xx., Chairman
and Chief Executive Officer
ATTEST:
/s/ Xxxx Xxxxxx
----------------------------------
CORPORATE SECRETARY
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AMERICAN INVESTORS LIFE
INSURANCE COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxx, Xx.
---------------------------------------
Xxxxx X. Xxxxxx, Xx., President
and Chief Executive Officer
ATTEST:
/s/ Xxxx Xxxxxx
----------------------------------
CORPORATE SECRETARY
AMVESTORS INVESTMENT GROUP, INC.
AMERICAN INVESTORS SALES GROUP INC.
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------------
Xxxxx X. Xxxxxx, Xx., Chief
Executive Officer
COMPENSATION COMMITTEE--
AMVESTORS FINANCIAL CORPORATION and
AMERICAN INVESTORS LIFE INSURANCE
COMPANY, INC.
By: /s/ R. Xxx Xxx
---------------------------------------
R. Xxx Xxx, Chairman
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PARTY OF THE SECOND PART:
/s/ Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx
AMERUS LIFE HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx, Chairman, President
and Chief Executive Officer
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