EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of the date
below first written by and between Synergy Insurance Services, Inc., a Georgia
corporation (the "Company") and Xxxxx X. Xxx, a resident of the State of Georgia
(the "Employee").
W I T N E S S E T H:
Whereas, the Company desires to retain the services of the Employee and the
Employee desires to continue to provide his services as President and Chief
Executive Officer of the Company according to the provisions set forth
hereinbelow;
Whereas, the Company and the Employee agree that their mutual best
interests can be best served by entering into this Agreement;
Now, Therefore, in consideration of these premises and the mutual
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Employment. The Company hereby employs the Employee as its President and
Chief Executive Officer and the Employee hereby accepts such employment under
and subject to the terms and conditions of this Agreement. The Employee
represents and warrants that he has the right, power and authority to enter into
this Agreement and that he is under no prohibition regarding his performance
hereunder. The Company represents and warrants that it has the right, power and
authority to enter into this Agreement.
2. Duties.
(a) The Employee shall competently and diligently manage the daily
operations and perform the normal duties and responsibilities of a President and
Chief Executive Officer of the Company (including, without limitation, those
matters set forth in Exhibit A attached hereto) which is engaged in providing
insurance management, insurance and reinsurance underwriting services, loss
control services, marketing services, bond underwriting and agency services, and
such other related duties and responsibilities consistent with the foregoing as
may be reasonably assigned to him from time to time by the board of directors of
the Company (the "Board of Directors").
(b) The Employee shall timely report to the Board of Directors as may be
reasonably requested of the Employee.
(c) The Employee shall devote his full time, skills and best efforts to
the performance of his duties hereunder, to the exclusion of all other
employment activities, except as otherwise provided in this Agreement; provided,
however, that the Employee may manage his own passive investments so long as
such management does not interfere materially with the performance of his duties
hereunder.
(d) The Employee shall generally perform his duties from the offices of
the Company which are located in the metropolitan area of Atlanta, Georgia, and
the Employee shall not be required to relocate his office unless mutually
approved by the Board of Directors and the Employee.
(e) During the term of this Agreement, the Company acknowledges that the
Employee shall also serve as president and chief executive officer, director and
a member of the executive committee of (i) American Safety Casualty Insurance
Company ("ASCIC"), the corporate parent of the Company, and its corporate
parent, American Safety Insurance Group, Ltd. ("ASIG"); and (ii) such other
insurance, reinsurance and/or bonding companies managed or owned by the Company
or its corporate parent(s) or affiliates as the parties may mutually agree. The
Employee shall receive no additional cash or equity compensation for acting as
president and chief executive officer, a director and a member of the executive
committee of ASCIC, ASIG, or such other companies as aforesaid, but shall
otherwise be entitled to any other benefits that may accrue to each office.
(f) The Company (and all other companies or corporate affiliates
pursuant to Paragraph 2(e) hereof) shall indemnify and hold harmless the
Employee from and against all claims, suits, judgments and damages asserted or
claimed by affiliated or unaffiliated third persons or entities, arising out of
the Employee's good faith efforts to implement the policies and procedures of
the Company (and any other companies or corporate affiliates pursuant to
Paragraph 2(e) hereof). However, such indemnification shall not arise as a
result of any action or failure to act by the Employee through his gross
negligence, willful misconduct or breach of duty of loyalty in connection with
performance of his duties under this Agreement. The Employee shall not be held
responsible or liable to the Company (and any other companies or corporate
affiliates pursuant to Paragraph 2(e) hereof) for any losses or errors or
omissions arising out of the performance of his duties in accordance with the
policies and procedures of the Company (and any other companies or corporate
affiliates pursuant to Paragraph 2(e) hereof) as communicated to the Employee
from time to time in writing, except as a result of any action or failure to act
by the Employee through his gross negligence, willful misconduct or breach of
duty of loyalty in connection with the performance of his duties under this
Agreement.
3. Compensation. In consideration of the services rendered by the Employee
under this Agreement, the Company shall pay the Employee a salary of $350,000
per year until January 1, 1998 and thereafter $375,000 per annum during the term
of this Agreement, which salary shall be paid in equal installments in arrears
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on a twice-monthly basis. In addition, the Employee shall be entitled to receive
a discretionary bonus, subject to Executive Committee approval, based on the
profitability of ASIG and its subsidiaries and affiliated companies on a group
basis.
4. Other Benefits. The Employee shall be entitled to the following fringe
benefits and any other such benefits which may be approved by the board of
directors of the Company from time to time during the term of this Agreement:
(a) Insurance Benefits. Employee shall be entitled to participate in
such major medical health insurance, accident and long term disability
insurance, and life insurance programs as the Company may from time to time make
available to its senior executive employees. In addition, the Company shall
purchase and maintain during the term of this Agreement at least a $2,000,000
key-man life insurance policy on the Employee for the benefit of the Company.
The Employee agrees to submit to medical examinations for such insurance and
supply such information as may be required in connection therewith.
(b) Stock Option Programs. The Employee shall participate in all stock
option plans which ASIG may from time to time make available to the senior
executive employees of the Company. The Employee shall also make recommendations
to the Executive Committee of ASIG regarding the grant of stock options to
senior executive employees of the Company.
In addition to the foregoing, the Employee shall have the option to
purchase up to 39 shares of common stock of ASIG at a purchase price equal to
95% of the book value per share of ASIG common stock as of December 31, 1996.
This option may be exercised, in whole or in part, by written notice to ASIG by
the Employee with corresponding payment of the purchase price, at any time, and
from time to time, until not later then March 7, 2002. The determination of the
book value of ASIG and shall be made in accordance with generally accepted
accounting principles for the insurance business consistently applied by the
independent certified public accountants customarily used by ASIG and with the
most recent actuarial reports from the independent actuarial consulting firm
customarily used by ASIG. This option may be assigned by the Employee to an
affiliated company or entity owned or controlled by the Employee.
(c) Vacation. The Employee shall be entitled to six weeks of vacation
during each fiscal year period of employment hereunder. The Employee agrees that
he shall schedule such vacation time so as not to materially impair the
performance of the Employee's duties hereunder. Any unused vacation time during
the term hereof must be used within six months from the end of each fiscal year
period hereunder and if not used such unused vacation time shall not accrue for
use in any subsequent period. Subject to the foregoing sentence, payment shall
be made for accrued and unused vacation time through the date of termination of
this Agreement.
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(d) Business Expenses. The Company shall reimburse the Employee within
fifteen days of submission of expense statements for all reasonable and
necessary business expenses (including club dues) incurred by the Employee in
connection with the performance of his duties hereunder and the business affairs
of the Company (and any other companies or corporate affiliates pursuant to
Paragraph 2(e) hereof). The Employee will present such expense reports in
compliance with the procedures established by the Company from time to time.
(e) Automobile Allowance. The Company shall provide the Employee with an
automobile allowance of $1,485 per month during the term of this Agreement from
which the Employee shall be responsible for the cost of the automobile and
related maintenance, repairs, gasoline and insurance.
(f) Retirement Plan. The Company shall make the maximum dollar annual
contribution on behalf of the Employee to its tax exempt profit sharing plan
qualified under Internal Revenue Code Section 401(a) (the "Plan") or in such
other manner as the parties may mutually agree; provided, however, that no such
contribution shall exceed any applicable contribution limitations imposed by the
Internal Revenue Code or the Plan, which currently provide, among other
requirements, that annual contribution allocations to a single participant may
not exceed $30,000.
5. Term. The term of employment under this Agreement shall commence March
6, 1997 and shall continue through December 31, 2002, unless sooner terminated
as provided in this Agreement. Upon said expiration date of this Agreement,
unless either party notifies the other at least 180 days prior to said
expiration date, this Agreement shall automatically extend for an additional
five year term.
6. Termination
(a) With Cause. This Agreement may be terminated by either party for
cause upon 60 days prior written notice to the other party in the event there is
a material breach of the obligations hereunder. The party asserting such
material breach shall provide written notice thereof in detail to the other
party who shall have 60 days from the receipt of such notice to cure such
material breach.
(b) Change of Control. This Agreement may be terminated by the Employee
within 365 days of the occurrence of an event of a "Change of Control" of either
the Company, ASCIC or ASIG, upon ninety (90) days prior written notice to the
Company. In any such event, upon receipt of notice of termination, the Company
shall pay Employee two times his then annual salary. For purposes of this
Paragraph 6(b), "Change of Control" shall be deemed to have occurred on the
earliest of the following dates:
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(i) The date any entity or person shall have become the
beneficial owner of, or shall have obtained voting control over, thirty
percent (30%) or more of the outstanding Common Shares of the Company.
For the purposes hereof, the term "person" shall mean any individual,
corporation, partnership, group, association or other person, as such
term is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act, other than the Company, any subsidiaries of the Company or any
employee benefit plan(s) sponsored or maintained by the Company or any
subsidiary thereof, and the term "beneficial owner" shall have the
meaning given the term in Rule 13d-3 under the Exchange Act;
(ii) The date the shareholders of the Company approve a
definitive agreement (A) to merge or consolidate the Company with or
into another corporation, in which the Company is not the continuing or
surviving corporation or pursuant to which any Common Shares of the
Company would be converted into cash, securities or other property of
another corporation, other than a merger of the Company in which holders
of Common Shares immediately prior to the merger have the same
proportionate ownership of Common Shares of the surviving corporation
immediately after the merger as immediately before, or (B) to sell or
otherwise dispose of all or substantially all the assets of the Company;
or
(iii) The date there shall have been a change in a majority of
the Board of Directors of the Company within a twenty four-month period
unless the nomination for election by the Company's shareholders of each
new director was approved by the vote of two-thirds of the directors
then still in office who were in office at the beginning of the twenty
four-month period.
(c) Effective Date. For purposes of Paragraphs 6(a) and (b), termination
shall be deemed to have occurred upon the expiration of the applicable notice
period. Termination of this Agreement shall not relieve or release the parties
from their respective obligations hereunder through such date and as otherwise
specifically provided in this Agreement.
(d) Death. In the event of the death of the Employee, his employment by
the Company shall be deemed terminated at the end of the calendar month in which
his death occurs, and all subsequent compensation and other benefits under this
Agreement shall cease, except as otherwise specifically provided in this
Agreement to the contrary. In such event, the Employee's salary and other
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benefits shall be continued for a period of six months following the end of the
month in which the Employee's death occurs. Nothing herein shall restrict the
Employee's estate or heirs from any benefits under applicable law.
(e) Disability. In the event of the disability of the Employee for a
period in excess of 180 days, such that the Employee is unable to substantially
perform his services hereunder, his employment by the Company shall be deemed to
terminate at the end of the calendar month which includes the last day of said
period, and all subsequent compensation and other benefits under this Agreement
shall cease, except as otherwise specifically provided in this Agreement to the
contrary. For purposes of this Agreement, "disability" shall mean an illness,
injury, or other physical or mental condition of the Employee occurring for a
period of 180 consecutive days from commencement or occurrence after the date of
this Agreement, which results in the Employee's inability to perform during such
period substantially all of the full-time duties he performed in his capacity as
the senior executive employee of the Company and to the extent he was performing
such duties immediately prior to the commencement or occurrence of such
condition, as certified in writing by a medical doctor, selected by the Company,
who is competent in the field of medicine to which such condition is related.
7. Specific Performance. In the event of a breach of this Agreement, any
non-breaching party hereto may maintain an action for a specific performance
against the other party hereto who is alleged to have breached any of the terms,
conditions, representations, warranties or agreements herein contained and it is
hereby further agreed that no objection to the form of action in any proceeding
for specific performance of this Agreement shall be raised by any party hereto
so that such specific performance of this Agreement may not be obtained by the
aggrieved party. Notwithstanding anything contained in this Agreement to the
contrary, the foregoing sentence shall not be construed to limit in any manner
whatsoever any of the rights and remedies an aggrieved party may have by virtue
of any breach of this Agreement.
8. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be delivered in
person, in which event the notice shall be deemed effective when delivered, or
by overnight delivery service providing documentation of receipt, or telexed or
telecopied, in which event the notice shall be deemed to have been received on
the next business day following delivery to such service or acknowledgment of
receipt by recipient's telex or telecopy machine. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
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(i) If to the Company:
Synergy Insurance Services, Inc.
Attn: General Counsel
0000 Xxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
(ii) If to Employee:
Xxxxx X. Xxx
0000 Xxxxxxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Any party hereto may change its address specified for notices herein by
designating a new address by notice in accordance with this Section.
9. Arbitration. Upon agreement of the parties hereto, any dispute or
disagreement between the parties arising out of this Agreement may be submitted
to and determined in binding arbitration in accordance with the Rules for
Commercial Arbitration of the American Arbitration Association. All arbitration
proceedings shall be conducted in Atlanta, Georgia.
The arbitration tribunal shall consist of three arbitrators, one
each selected by Company and Employee, and the third selected by the two
selected arbitrators. If either Company or Employee fails to select an
arbitrator within 30 days of receipt of a request for selection from the other
party or from the American Arbitration Association, or if the arbitrators
selected by Company and Employee shall be unable to agree on the selection of
the third arbitrator within 30 days of their selection, such arbitrator shall be
appointed in accordance with the Rules for Commercial Arbitration of the
American Arbitration Association. If any arbitrator shall fail to serve or shall
be unable to discharge his or her duties, such arbitrator shall be replaced by
the party appointing such arbitrator in the same manner of selection, or if the
third arbitrator, in accordance with the above procedure, within 30 days after
request from either Company or Employee.
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The decision rendered by a majority of the members of the arbitration
tribunal shall be final and binding upon the parties and may be entered as a
judgment in, and enforced by, any court of competent jurisdiction. The
prevailing party shall be entitled to recover from the other party all the costs
and expenses of the prevailing party incurred in connection with the
arbitration, including arbitration fees, reasonable out-of-pocket expenses,
reasonable attorneys fees for services before and during the arbitration and any
appeal or enforcement thereof. This arbitration provision shall survive the
termination or expiration of this Agreement and shall not be extinguished
thereby.
10. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties hereto with regard to the
subject matter hereof, and supersedes all prior promises, representations,
inducements, understandings and agreements between the parties, whether written
or oral. This Agreement may not be amended or revised except by a writing signed
by the parties.
(b) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
including any corporation with which or into which any corporate party or any
successor or subsidiary may be merged or which may succeed to its assets or
business, although the obligations of the Employee are personal and may be
performed only by such person.
(c) Headings. The headings or captions of this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit or
describe the scope of this Agreement or the intent of any provision hereof.
(d) Severability. The provisions of this Agreement are severable, and
invalidity of any provision shall not affect the validity of any other
provision.
(e) Governing Law and Venue. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of Georgia, notwithstanding any state's choice of law
rules to the contrary. Further, the parties hereto express and agree that any
and all action concerning any dispute arising under this Agreement shall be
filed and maintained only in a state or federal court sitting in the State of
Georgia, and each party hereby consents and submits to the jurisdiction and
venue of such state or federal court.
(f) Waiver. The waiver by a party of any breach of this Agreement by the
other party shall not be effective unless in writing, and no such waiver shall
operate or be construed as the waiver of the same or another breach on a
subsequent occasion.
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(g) Attorney Fees. In the event litigation shall be necessary to
enforce, interpret, or rescind the provisions of this Agreement or relating to
matters set forth herein, the prevailing party shall be entitled to recover from
the adverse party, in addition to such other relief, the prevailing party's
reasonable attorney's fees for services before trial, on trial, and on any
appeal therefrom.
(h) Construction. This Agreement is the product of negotiation of and
preparation by and among each party. Therefore, the parties acknowledge and
agree that this Agreement shall not be deemed prepared or drafted by one party
or the other and should be construed accordingly.
(i) Singular; Gender. Unless the content otherwise requires, whatever
used in this Agreement, the singular shall also include the plural, the plural
shall include the singular, and the masculine gender shall include the neuter
and feminine gender, and vice versa.
(j) Counterparts. This Agreement may be executed in counterparts, all of
which when taken together shall together constitute one and the same document.
Recitals. The recitals set forth at the beginning of this Agreement are
incorporated by reference in, and made part of, this Agreement.
In Witness Whereof, the parties hereto have duly executed this Agreement
as a sealed instrument as of March 6, 1997.
Company: Employee:
SYNERGY INSURANCE /s/ Xxxxx X. Xxx
SERVICES, INC. ----------------------------
XXXXX X. XXX
By: /s/ Xxxxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Chairman
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EXHIBIT A
POSITION DESCRIPTION
PRESIDENT/CHIEF EXECUTIVE OFFICER
REPORTING: Executive Committee and Board of Directors of Synergy Is Services,
Inc. (the "Company")
RESPONSIBILITIES:
Responsible for overall management and control of operations of general
liability and related bond agencies, and of related insurance company clients of
the Company.
Oversee and manage underwriting, loss control, claims, marketing,
administrative and bookkeeping/financial departments and staff personnel of the
Company and related bond agency.
Manage hiring and termination of all staff and set staff compensation
levels for the Company and related bond agency.
Liaison with outside management and professional firms retained by the
Company or related bond agency or insurance company clients.
Preparation of annual budgets for the Company and related bond agency and
insurance company clients, subject to approval by Treasurer of the Company and
boards of the Company, bond agency and insurance company clients.
Periodically report to Executive Committee and Board of Directors of the
Company and related bond agency and insurance company clients as directed by
Executive Committee and Board of Directors.
Oversee the negotiation of relationships between the Company, and related
bond agency and insurance company clients and producing brokers.
Oversee the negotiation of relationships between the Company, and related
bond agency and insurance company clients and producing brokers.
Oversee the negotiation of reinsurance agreements between related insurance
company clients and reinsurers, subject to approval by Boards of such clients.
Manage the Company and related bond agency operations and performance
pursuant to agreements between the Company and related insurance company
clients.
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Recommend to Executive Committee and Board of Directors areas of new
business development.
Plan Executive Committee and Board meetings per schedule adopted by Board
of Directors.
In general be responsible for managing operations of the Company and
related bond agency in accordance with directions of Executive Committee and
Board of Directors.
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