Exhibit 10.24
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of the 1st day of
May, 2002, by and between Triad Guaranty Insurance Corporation, an Illinois
insurance corporation (the "Company"), and Xxxxxxx X. Xxxxxx ("Employee").
WITNESSETH:
WHEREAS, the Company desires to employ Employee and Employee is willing to
accept such employment, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs Employee and Employee
accepts employment with the Company as Senior Vice President - Finance and
Treasurer of the Company, on the terms and conditions herein set forth, for
a period commencing on May 1, 2002, and expiring on December 31, 2004, and
thereafter for successive six-month periods unless either party gives
written notice of the nonrenewal of this Agreement at least one year prior
to the commencement of any such additional six-month period. Employee's
duties and responsibilities in this position shall be determined by the
Company's Board of Directors (the "Board"), consistent with Employee's
qualifications and the best interests of the Company. Employee shall also
perform such other or additional duties on behalf of the Company and its
parent corporation, Triad Guaranty Inc., a Delaware corporation ("TGI"), as
may be assigned to him by the Board from time to time.
2. EXTENT OF SERVICES. During the term hereof, Employee shall devote his
entire attention and energy to the business and affairs of the Company and
TGI on a full-time basis and shall not be engaged in any other business
activity, regardless of whether such business activity is pursued for gain,
profit or other pecuniary advantage, unless the Company otherwise consents;
but this shall not be construed as preventing Employee from investing his
assets in such form or manner as will not require any services on the part
of Employee in the operation of the affairs of the companies in which such
investments are made and will not otherwise conflict with the provisions of
this Agreement. Full-time, as used above, shall mean a forty (40) hour work
week, or such longer work week as the Board shall from time to time adopt.
The foregoing shall not be deemed to prevent Employee from participating in
any charitable or not-for-profit organization to a reasonable extent,
provided however that Employee does not receive any salary or other
remuneration from such charity or not-for-profit organization.
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3. COMPENSATION.
(a) SALARY. During the term of this Agreement, the Company shall pay
Employee an annual salary of $125,000.00 ("Annual Salary"), payable in
accordance with the Company's regular payroll procedures. During each
year that this Agreement is in effect, the Company will review
possible increases in Employee's salary at least annually, with any
such increases subject to the determination of the Board.
(b) BONUS. In addition to his Annual Salary, Employee shall be eligible to
receive an annual bonus in an amount as may be determined by the
Board, pursuant to a bonus plan which may then be in effect or
otherwise.
4. BENEFITS. Employee shall be entitled to participate in all medical and
other employee plans of the Company and TGI, if any, on the same basis as
other executives of the Company, subject in all cases to the respective
terms of such plans.
5. PTO. Employee shall be entitled to paid time off ("PTO") in accordance with
the Company's PTO policy in effect at the time the PTO is taken. In the
event that the full PTO is not taken by Employee, no PTO time shall accrue
for use in future years, except in accordance with the Company's then
existing policy for the carry forward of accrued PTO.
6. EXPENSES. Employee shall be entitled to prompt reimbursement for all
reasonable expenses incurred by him in furtherance of the business of the
Company and TGI in connection with his performance of his duties hereunder,
in accordance with the policies and procedures established for executive
officers of the Company and TGI, and provided Employee properly accounts
for such expenses.
7. TERMINATION.
(a) DEATH. This Agreement and Employee's employment hereunder shall
terminate immediately upon Employee's death. In such event, the
Company shall be obligated to pay Employee's salary only to the end of
the month in which he dies.
(b) INCAPACITY. If Employee is absent from his employment for reasons of
illness or other physical or mental incapacity which renders him
unable to perform the essential functions of his position, with or
without reasonable accommodation, for more than an aggregate number of
days totaling twelve (12) weeks, whether or not consecutive, in any
period of twelve (12) consecutive months, then upon at least sixty
(60) days' prior written notice to Employee, if such is consistent
with applicable law, the Company may terminate this Agreement and
Employee's employment hereunder. In such event, the Company shall be
obligated to pay Employee his salary to the earlier of (i) the date on
which coverage commences under the long-term disability insurance
policy maintained by the Company for the benefit of Employee, if any,
or (ii) the date two months after the date of termination.
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(c) TERMINATION BY THE COMPANY.
(i) The Company may terminate this Agreement and Employee's
employment hereunder at any time for Cause. As used herein,
"Cause" shall mean:
(A) a material breach by Employee of his duties and obligations
hereunder, including but not limited to gross negligence in
the performance of his duties and responsibilities or the
failure to follow the Board's directions; provided he shall
be entitled to reasonable notice of, and if feasible a
reasonable opportunity to cure, any such breach;
(B) willful misconduct by Employee which may be materially
injurious to the reputation or business of the Company or
TGI;
(C) any act of fraud, misappropriation or other dishonesty by
Employee; or
(D) Employee's conviction of a felony.
In the event of termination for Cause, the Company shall pay
Employee his salary up to the date of the delivery of the notice
of termination, which date shall be for all purposes of this
Section 7(c)(i) the date of termination of his employment. In the
event of termination for Cause, Employee shall not receive any
previously unpaid bonus or bonuses except any earned but unpaid
bonus with respect to any full calendar year preceding the date
of termination.
(ii) Notwithstanding anything contained herein to the contrary, the
Company also may terminate this Agreement and Employee's
employment hereunder for any reason whatsoever, upon no less than
sixty (60) days' prior written notice to Employee. In the event
that the Company terminates this Agreement pursuant to the
provisions of this Section 7(c)(ii), Employee shall be entitled
to receive his salary up to the date of termination set forth in
the notice of termination and a severance payment equal to 200%
of the total annual salary paid to Employee by the Company and/or
TGI during the two calendar years prior to the year of
termination (the "Severance Payment"). At the option of the
Company, the Severance Payment shall be payable either in a lump
sum cash payment or in twenty-four (24) monthly installments
commencing on the first day of the month following termination of
this Agreement. If for any reason any court determines that any
of the restrictions contained in Section 8 hereof are not
enforceable, the Company shall have no obligation to pay the
Severance Payment or any remaining installment thereof to
Employee.
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(d) TERMINATION BY EMPLOYEE. Employee may terminate this Agreement and his
employment hereunder for any reason whatsoever, upon no less than
sixty (60) days' prior written notice to the Company. In the event
that Employee terminates this Agreement pursuant to the provisions of
this Section 7(d), Employee shall be entitled to receive his salary up
to the date of termination set forth in the notice of termination. In
such event, Employee shall not receive any previously unpaid bonus or
bonuses except any earned but unpaid bonus with respect to any full
calendar year preceding the date of termination.
8. RESTRICTIVE COVENANT. During the term of this Agreement and for a period of
two (2) years after the termination of this Agreement by the Company or
Employee, except pursuant to the provisions of Section 1 above, Employee
shall not, either as an individual on his own account; as a partner, joint
venturer, employee, agent, or salesman for any person; as an officer,
director or stockholder (other than a beneficial holder of not more than 5%
of the outstanding voting stock of a company having at least 250 holders of
voting stock) of a corporation; or otherwise, directly or indirectly:
(a) enter into or engage in the private mortgage insurance business
within:
(i) any area of the United States in which the Company or TGI is then
doing business;
(ii) in the event that any court determines that the area set forth in
the preceding subparagraph is too broad to be enforceable, each
and every state of the United States in which the Company had a
market share, based on industry data, of at least four percent
(4%) of net new mortgage insurance written as of the end of the
quarter next preceding the date of termination of this Agreement;
or
(iii)in the event that any court determines that the area set forth in
the preceding subparagraphs is too broad to be enforceable, each
and every xxxxxxxxxxxx xxxxxxxxxxx xxxx xx xxx Xxxxxx Xxxxxx in
which the Company had a market share, based on industry data, of
at least four percent (4%) of net new mortgage insurance written
as of the end of the quarter next preceding the date of
termination of this Agreement; or
(iv) in the event that any court determines that the area set forth in
the preceding subparagraphs is too broad to be enforceable, the
States of Florida, Illinois and North Carolina; or
(v) in the event that any court determines that the area set forth in
the preceding subparagraphs is too broad to be enforceable, the
State of North Carolina.
(b) solicit or attempt to solicit any of the Company's or TGI's customers
or prospective customers with whom Employee has had contact as an
employee of the Company in the performance of his duties and
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responsibilities hereunder with the intent or purpose to perform for
such customer the same or similar services or to sell to such customer
the same or similar products which Employee performed for or sold to
such customer during the term of his employment hereunder; or
(c) solicit or recruit any person who is an employee or agent of the
Company or TGI, either now or during such period, for employment in
the private mortgage insurance business or for the purpose of
soliciting or attempting to solicit any of the Company's or TGI's
customers or prospective customers as prohibited by Section 8(b)
above.
Employee and the Company agree and acknowledge that the Company and TGI do
business on a nationwide basis, with customers located throughout the
United States, and that any breach by Employee of the restrictive covenant
contained herein would immeasurably and irreparably damage the Company and
TGI. Employee and the Company agree and acknowledge that the duration,
scope and geographic areas applicable to the noncompetition covenants in
this Section 8 are fair, reasonable and necessary to protect legitimate
business interests of the Company and TGI, and that adequate compensation
has been received by Employee for such obligations.
9. CONFIDENTIAL INFORMATION AND DISCOVERIES. Employee acknowledges that he
will, as a result of his duties as an employee of the Company, have access
to and be in a position to receive confidential information, including
trade secrets, relating to the Company and TGI. Therefore, Employee agrees
that during his employment by the Company and thereafter he will not
divulge to, or use for the benefit of, himself or any other person, any
information concerning any inventions, discoveries, improvements,
processes, methods, trade secrets, research or secret data (including,
without limitation, customer or supplier lists, formulas, computer
programs, software development or executive monitor systems), or other
confidential matters possessed, owned or used by the Company or TGI that
may be obtained or learned by Employee in the course of or as a result of
his employment hereunder unless (i) such disclosure is authorized by the
Company, (ii) such confidential information becomes generally available to
and known by the public (other than as a result of disclosure directly or
indirectly by the Employee) or (iii) such confidential information becomes
available to Employee on a nonconfidential basis from a source other than
the Company, TGI or their employees or agents, provided that such source is
not and was not bound by a confidentiality agreement with or other
obligation of secrecy to the Company or TGI. The expiration or termination
of employment shall not be deemed to release Employee from his duties
hereunder not to convert to his own use or the use of others the rights or
properties of the Company or TGI as described herein.
10. CHANGE IN CONTROL.
(a) CHANGE IN CONTROL SEVERANCE COMPENSATION. Within two years following a
Change in Control (as defined below), in the event of (i) a material
and adverse change in the status or position of Employee as an
executive officer of the Company including, without limitation, a
material diminution in duties or responsibilities, except in
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connection with the incapacity of Employee, (ii) the transfer or
relocation by the Company of the office of Employee which would
require Employee to be based more than 50 miles distant from the
location of his office immediately prior to such transfer or
relocation, or (iii) the discontinuance of any bonus or incentive
compensation plan for which the Company or TGI has determined Employee
to be eligible and which represents a material portion of the
Employee's annual compensation, Employee shall be entitled to
terminate this Agreement and his employment hereunder and receive from
the Company a payment equal to 200% the total annual salary paid to
Employee by the Company and/or TGI during the two calendar years prior
to the year of termination (the "Change in Control Compensation"). At
the option of the Company, the Change in Control Compensation shall be
payable either in a lump sum cash payment or in twenty-four (24)
monthly installments commencing on the first day of the month
following termination of this Agreement. If for any reason any court
determines that any of the restrictions contained in Section 8 hereof
are not enforceable, the Company shall have no obligation to pay the
Change in Control Compensation or any remaining installment thereof to
Employee.
(b) CHANGE IN CONTROL. For purposes of this Agreement, "Change in Control"
shall mean the occurrence of any of the following events:
(i) any person or persons acting as a group, other than a person
which as of the date of this Agreement is the beneficial owner of
voting securities of TGI and its affiliates, or any employee
benefit plan of the Company or TGI or Employee or a group
including Employee, shall become the beneficial owner of
securities of TGI representing the greater of (i) at least
twenty-five percent (25%) of the combined voting power of TGI's
then outstanding securities, or (ii) at least the combined voting
power of TGI's outstanding securities then held by Collateral
Investment Corp., a Delaware corporation, and Collateral
Mortgage, Ltd., an Alabama limited partnership, and any of their
affiliates; or
(ii) individuals who constitute the board of directors of TGI upon
completion of the initial public offering of TGI's common stock
(the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election or
nomination for election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement
of TGI in which such person is named as a nominee for director,
without objection to such nomination) shall be, for purposes of
this clause (ii) considered as though such person were a member
of the Incumbent Board; or
(iii)any consolidation or merger to which TGI is a party, if
following such consolidation or merger, stockholders of TGI
immediately prior to such consolidation or merger shall not
beneficially own securities representing at least fifty-one
percent (51%) of the combined voting power of the outstanding
voting securities of the surviving or continuing corporation; or
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(iv) any sale, lease, exchange or other transfer (in one transaction
or in a series of related transactions) of all, or substantially
all, of the assets of TGI, other than to an entity (or entities)
of which TGI or the stockholders of TGI immediately prior to such
transaction beneficially own securities representing at least
fifty-one percent (51%) of the combined voting power of the
outstanding voting securities.
11. ENFORCEMENT. Both parties recognize that the services to be rendered under
this Agreement by Employee are special, unique and of extraordinary
character and that in the event of the breach by Employee of any of the
terms and conditions of this Agreement to be performed by him, then the
Company shall be entitled, if it so elects, to institute and prosecute
proceedings in any court of competent jurisdiction, either in law or in
equity, to obtain damages for any breach hereof, or to enforce the specific
performance hereof by Employee or to enjoin Employee from performing acts
prohibited above during the period herein covered, but nothing herein
contained shall be construed to prevent such other remedy in the courts as
the Company may elect to invoke.
12. RETURN OF DOCUMENTS. Upon the termination of this Agreement for any reason,
Employee shall forthwith return and deliver to the Company and shall not
retain any original or copies of any books, papers, price lists or customer
contracts, bids or customer lists, files, books of account, notebooks and
other documents and data relating to the performance by Employee of his
duties hereunder, all of which materials are hereby agreed to be the
property of the Company.
13. MISCELLANEOUS.
(a) NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered
or certified mail to Employee or the Company at the address set forth
below their signatures at the end of this Agreement or to such other
address as they shall notify each other in writing.
(b) ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns and Employee and
his personal representatives, heirs, legatees and beneficiaries, but
shall not be assignable by Employee.
(c) APPLICABLE LAW. This Agreement shall be construed in accordance with
the laws of the State of North Carolina in every respect, including,
without limitation, validity, interpretation and performance.
(d) HEADINGS. Section headings and numbers herein are included for
convenience of reference only and this Agreement is not to be
construed with reference thereto. If there be any conflict between
such numbers and headings and the text hereof, the text shall control.
(e) SEVERABILITY. If for any reason any portion of this Agreement shall be
held invalid or unenforceable, it is agreed that the same shall not
affect the validity or enforceability of the remainder hereof. The
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portion of the Agreement which is not invalid or unenforceable shall
be considered enforceable and binding on the parties and the invalid
or unenforceable provision(s), clause(s) or sentence(s) shall be
deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable and this Agreement shall be
construed as if such invalid or unenforceable provision(s), clause(s),
or sentences(s) were omitted. The provisions of this Section 13(e)
shall survive the termination of this Agreement for any reason.
(f) ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to its subject matter and supersedes all previous
agreements between the parties. No officer, employee, or
representative of the Company has any authority to make any
representation or promise in connection with this Agreement or the
subject matter hereof that is not contained herein, and Employee
represents and warrants he has not executed this Agreement in reliance
upon any such representation or promise. No modification of this
Agreement shall be valid unless made in writing and signed by the
parties hereto.
(g) WAIVER OF BREACH. The waiver of the Company of a breach of any
provision of this Agreement by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
(h) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and Employee has signed this Agreement all on the
day and year first above written.
TRIAD GUARANTY INSURANCE
CORPORATION, an Illinois corporation
By:
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Xxxxxx X. Xxxxxxxx
Chief Executive Officer
Address: 000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx 000
Winston-Salem, N. C. 27104
EMPLOYEE:
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Xxxxxxx X. Xxxxxx
Address: 000 Xxxxxxxx Xxxx Xx.
Clemmons, N. C. 27012
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