Employers Insurance Company of Nevada, (the “Company”) and William (Ric) Yocke (the “Employee”) enter this Employment Agreement (this “Agreement”) on this 1 st day of January, 2006.
A. Employee has knowledge and experience applicable to the position of Executive Vice President and Chief Financial Officer.
B. The Company is a Nevada domiciled insurance company.
C. The Company desires to employ Employee to perform certain services for the Company, and Employee desires to be so employed by the Company.
In consideration of the premises and mutual covenants and promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the parties agree as follows:
The Company agrees to employ Employee and Employee accepts such employment upon the terms and conditions specified herein. Employee agrees to devote substantially all of his time and effort during working hours in the performance of the duties called for herein and agrees that any other non-employment related duties (i.e., industry related groups, service on boards, etc.) will not be allowed to materially interfere with the performance of the duties called for herein.
The term of this Agreement shall commence on the date hereof, and continue for three (3) years, until December 31, 2008 (the “Expiration Date”) unless sooner terminated in accordance with this Agreement. The Company agrees to notify the Employee of its intent whether or not to offer another contract of employment to the Employee not later than six (6) months prior to the expiration of this Agreement. If the Company informs the Employee that the employment will be terminated at the end of the term of this Agreement, Employee shall be entitled to reasonable paid administrative leave to secure other employment through the end of the Agreement. If the Company informs the Employee that a new contract will be offered after the expiration of this Agreement, the parties hereto shall consummate the terms and conditions of the new contract not less than thirty (30) days before the expiration of this Agreement. If the parties cannot agree on the terms and conditions of the new contract more than thirty (30) days before the expiration of this Agreement, and the Company decides, at that time, that further negotiations are not appropriate, the Company shall pay Employee severance, in accordance with Paragraph 6(a)(l) herein, upon the termination of the Agreement.
3. Services and Duties.
Employee shall serve as Executive Vice President and Chief Financial Officer and shall perform such duties as may be assigned by the Chief Executive Officer from time to time. At the request of the Board of Directors of the Company, Employee shall also serve as a director of the Company and/or one or more of the Company’s parent, subsidiaries or affiliates at no additional compensation. Employee agrees that upon the termination of his employment with the Company, he shall resign from any and all Boards effective on the date of the termination of employment.
The Employee agrees to submit to a physical examination at a reasonable time as requested by the Company for the purpose of the Company’s obtaining life insurance on the life of the Employee for the benefit of the Company; provided, however, that the Company shall bear the costs for such examinations and shall pay all premiums on any life insurance obtained as a result of such examinations. Employee further agrees to submit to drug testing in accordance with the Company policy.
(a) The Company, at any time, may terminate this Agreement immediately for Cause. Cause is defined as:
(i) A material breach of this Agreement by Employee;
(ii) Failure or inability of Employee to obtain or maintain any required licenses or certificates;
(iii) Willful violation by Employee of any law, rule or regulation, including without limitation, any material insurance law or regulation, which violation may, as determined by the Company, adversely affect the ability of Employee to perform his duties hereunder or may subject the Company to liability;
(iv) Election by the Company to discontinue the Company’s business; or,
(v) Conviction of any felony or crime including moral turpitude.
(b) The Employee may terminate this Agreement immediately in the event of:
(i) A material breach of this Agreement by the Company; or
(ii) Willful violation by Employer of any law, rule or regulation, including without limitation, any material insurance law or regulation, which violation may, as determined by the Employee, adversely affect the ability of Employee to perform his duties hereunder or may subject the Employee to liability
(c) The Company may also terminate this Agreement upon the occurrence of one or more of the following events, subject to applicable law:
(i) Death of Employee;
(ii) Employee is deemed to be disabled in accordance with the policies of the Company and the law or if Employee is unable to perform the essential job functions of Employee’s position with the Company, with or without reasonable accommodation, for a period of more than 100 business days in any 120 consecutive business day period. Employee is entitled to any and all short term or long term disability programs, like any other employee, in accordance with the policies of the Company, whether or not this Agreement is terminated;
(iii) Any event, occurrence, or factual situation that, in the sole and absolute discretion of the Company, shall make the continued employment of Employee ineffective, inadvisable, or unnecessary.
6. Duties Upon Termination
(a) If the Company terminates this Agreement for any reason before the Expiration Date, other than specified above in subsection 5(a) for Cause, 5(c)(l), for the death of the employee, or 5(c)(2) for disability, or if the Employee terminates this Agreement for Cause which has not been cured by the Company within thirty (30) days of receipt of written notice of the alleged breach pursuant to Paragraph 5(b), the Employee shall receive the following severance pay (the “Severance Pay”):
(i) An amount equal to Base Salary through expiration of the term of this Agreement or one months Base Salary (as defined below) for each completed year of service with the Company, whichever is greater but in no event less than twelve (12) months, within thirty (30) days of the effective date of the termination. The payment amount shall be subject to normal payroll deductions at Employee’s then elected rate. Employee agrees to pay any federal or state taxes, which are required to be paid by Employee beyond the amount of any withholding by the Company;
(ii) Short term bonus amounts from the Executive Bonus Plan, pro-rated for the period of the calendar year in which the Employee last performed services for the Company, in accordance with the Bonus Plan in effect on the date of the termination;
(iii) Long term bonus amounts from the Executive Bonus Plan, if applicable, either in a lump sum payment made within thirty (30) days of the effective date of the termination or, in accordance with the payment schedule in the Bonus Plan in effect on the date of the termination, such election to be made at the option of the Company; and,
(iv) Continuation of the insurance coverage in effect on the date of the termination, for a period of 18 (eighteen) months with the Company paying the employer portion of the premium and the Employee paying the employee portion, including dependents if applicable, of the premium during the eighteen (18) month period, provided Employee elects to continue such insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Employee is solely responsible for taking the actions necessary to exercise his rights under COBRA for the insurance coverage Employee has in effect, including dependents if applicable, on the date of termination.
(b) The parties agree, in the event of a breach of this Agreement by the Company that is not cured in accordance with this Agreement, that actual damages are speculative and that the amount of the Severance Pay set forth herein is liquidated damages and is a reasonable estimate of what damages would be for a breach of this Agreement.
(c) Employee agrees and acknowledges that the following must be satisfied by the Employee before he is entitled to the Severance Pay called for herein:
(i) That Employee return any and all Company equipment, software, data or Company property or information, including documents and records or copies thereof relating in any way to any proprietary information of the Company, its
parent, subsidiaries or affiliates whether prepared by the Employee or any other person or entity. That Employee further agrees that he shall not retain any proprietary information of the Company, its parent, subsidiaries or affiliates after the termination of his employment;
(ii) That Employee execute a Global Release of Liability, in a form substantially similar to the sample attached hereto, which releases liability for any and all claims, whether based in law or equity, arising from or associated with Employee’s employment or with this Agreement. That Employee further acknowledges and agrees that he has not made and will not make any assignment of any claim, cause or right of action, or any right of any kind whatsoever, arising from or associated with the employment of Employee by the Company; and,
(iii) That Employee reaffirm the covenants contained herein, in writing, including but not limited to the following: non-disclosure, non-competition and non-solicitation covenants.
(d) The Employee may terminate this Agreement for reasons other than those identified in Paragraph 5(b) upon not less than 60 days prior written notice. If the Employee terminates this Agreement pursuant to this paragraph, he shall only be entitled to the following:
(i) Any unpaid salary through the effective date of Employee’s resignation from the Company; and
(ii) Any accrued and unused vacation pay.
7. Compensation, and Benefits.
(a) During the term of this Agreement, the Company shall pay to Employee an annual salary of not less than $260,000 (“Base Salary”), which amount shall be paid according to the Company’s regular payroll practices. The Company agrees to review the Base Salary on an annual basis and adjust the salary to comply with the executive compensation policy in effect at the time of the review. Any increase made to the annual salary will establish the new Base Salary for the Employee. All payments made pursuant to this Agreement shall be reduced by and subject to withholding for all federal, state, and local taxes and any withholding required by applicable laws and regulations.
(b) The Company may provide an annual incentive (the “Annual Incentive”) to the Employee during the Term of Employment based on the Employee’s and the Company’s performance, as determined by the Board (or a committee thereof) in its sole discretion. If such a plan is provided, the Company shall set a target incentive of not less than sixty percent (60%) of annual salary. Such annual incentive shall be paid in accordance with the Company’s regular practice for its senior officers, as in effect from time to time. To the extent not duplicative of the specific benefits provided herein, the Employee shall be eligible to participate in all incentive compensation, retirement, supplemental retirement, and deferred compensation plans, policies and arrangements that are provided generally to other senior officers of the Company at a level (in terms of the amount and types of benefits and incentive compensation that the Employee has the opportunity to receive and the terms thereof) determined in the sole discretion of the Board.
(c) Employee agrees that the amounts payable under this Agreement including but not limited to the amount payable under Paragraph 6(a)(l) is good, valuable and separate consideration for the non-competition, assignment and release of liability provisions
contained herein. Employee acknowledges that he is aware of the effect of the non-competition, assignment and release of liability provi