EXHIBIT 10.21
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT, effective as
of January 26, 2004 by and between USI SERVICES CORPORATION, a
Delaware corporation (“ Company ”) and Philip E.
Larson, III (“ Executive” ). Company and
Executive are referred to hereinafter as the “ Parties
”.
R E C I T A
L S :
WHEREAS, the Company is a wholly
owned subsidiary of U.S.I. Holdings Corporation, a Delaware
corporation (“ USI ”) and;
WHEREAS, the Company desires to
employ the Executive on the terms and subject to the conditions set
forth herein, and Executive is willing to accept such employment on
such terms and conditions; and
WHEREAS, by virtue of such
employment, Executive will have access to Confidential Information
of the USI Companies; and
WHEREAS, Executive acknowledges and
agrees that the Company (on behalf of itself and the USI Companies)
has a reasonable, necessary and legitimate business interest in
protecting its own and the USI Companies’ Confidential
Information, Client Accounts, relationships with Active Prospective
Clients, Goodwill and ongoing business, and that the terms and
conditions set forth below are reasonable and necessary in order to
protect these legitimate business interests.
NOW THEREFORE, in consideration of
the representations, warranties, covenants, and agreements
contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are conclusively acknowledged,
the Parties, intending to become legally bound, agree as
follows:
A G R E E M
E N T :
1. DEFINITIONS
1.1 Specific
Definitions . Capitalized terms not defined elsewhere
herein shall have the following meanings ascribed to
them:
“ Active Prospective
Acquisition ” means any business or enterprise engaged in
providing USI Business, (i) with which a specified Person (or
any of its agents) had engaged in negotiations (whether or not
successfully) within the 24 months preceding a specified date,
regarding the acquisition of, sale of assets by, or merger or joint
venture with, such business or enterprise or (ii) which had
been identified by a specified Person (or any of its agents) in the
business records of such specified Person within the 24 months
preceding a specified date, and actively considered as a candidate,
for possible acquisition, merger, sale of assets or joint
venture.
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“ Active Prospective
Client ” means any Person, or a group of Persons,
(i) who or which had been identified with reasonable
particularity by a specified Person (or any of its agents) in the
business records of such specified Person within the 24 months
preceding a specified date, with reasonable particularity as a
possible client or customer of such specified Person, or
(ii) to whom or which a specified Person (or any of its
agents) had communicated in the business records of such specified
Person within the 24 months preceding a specified date, in writing
or otherwise, with respect to the provision of any services that
such specified Person provides in the conduct of its
business.
“ Client Account”
means the account of any client (including, without limitation, any
retail insurance agent or broker, individual insured, association
and any member thereof, and any insurance carrier or other entity
to the extent third party administration claims processing or
underwriting is performed by such specified Person for such carrier
or other entity) who or which is serviced, as of a specified date,
by a specified Person in connection with such specified
Person’s business, regardless of whether such services are
provided by, or through the licenses of, such specified Person or
any shareholder, employee or agent of such specified
Person.
“ Change of Control
” means the occurrence of any of the following:
(i) any transaction, or series of
related transactions (including any merger or consolidation), the
result of which is that any “person” or
“group” (as such terms are defined for purposes of the
Securities Exchange Act of 1934, as amended), becomes the
“beneficial owner” (as so defined, except that a Person
shall be deemed to have “beneficial ownership” of all
securities that such Person has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition), directly or indirectly, of
50% or more of USI’s aggregate outstanding voting stock
(measured by voting power rather than number of shares);
(ii) USI consolidates with, or
merges with or into, any Person, or any Person consolidates with or
merges with or into USI, in any such event pursuant to a
transaction in which any of the outstanding voting stock of USI is
converted into or exchanged for cash, securities or other property,
other than any such transaction where the voting stock of USI
outstanding immediately prior to such transaction is converted into
or exchanged for voting stock of the surviving or transferee Person
constituting more than 50% of the aggregate outstanding shares of
such voting stock of such surviving or transferee Person
(immediately after giving effect to such conversion or exchange);
or
(iii) substantially all of
USI’s assets or earnings power is sold in any transaction or
series of related transactions
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“ Confidential
Information ” means any information of a specified
Person, determined as of a specified date, that is not already
generally available to the public (unless such information has
entered the public domain and become available to the public
through fault on the part of the Party to be charged hereunder),
all of which the Parties agree constitute trade secrets under the
governing trade secrets law, including but not limited
to:
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(i)
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the identity of
any client (including, without limitation, any retail insurance
agent or broker, individual insured, association and any member
thereof, and any insurance carrier or other entity to the extent
third party administration claims processing or underwriting is
performed by such specified Person for such carrier or other
entity) whose account constituted a Client Account of such
specified Person at any time within the 24 months preceding such
specified date, as well as the identity of any Active Prospective
Client of such specified Person as of such date;
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(ii)
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the identity,
authority and responsibilities of key contacts at each such client
and Active Prospective Client;
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(iii)
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the service
cost burden with respect to each such client and Active Prospective
Client;
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(iv)
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the identities
of markets or companies (including, but not limited to, managed
care programs, physician networks and the surgical review board)
from which insurance coverages or other commitments, benefits or
services for clients are obtained, the surgical review boards of
such companies and the commission rates and/or fees with respect
thereto;
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(v)
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the types of
consulting, third-party administration, employee communication,
investment management, managed care, human resource and other
services, and insurance coverages, provided or to be provided
specifically to any such client or Active Prospective Client, and
the internal corporate policies relating thereto;
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(vi)
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the specific
insurance policies purchased by or for such clients or Active
Prospective Clients;
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(vii)
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the expiration
dates, commission rates, fees, premiums and other terms and
conditions of such policies;
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(viii)
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the risk
specifications and other characteristics, and claims loss histories
of such clients or Active Prospective Clients;
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(ix)
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the nature of
programs and plans, including their design, funding and
administration, demographic characteristics and any other
information supplied by, or developed for, such clients or Active
Prospective Clients;
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(x)
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operations
manuals, prospecting manuals and guidelines, pricing policies and
related information, marketing manuals and plans, and business
strategies, techniques and methodologies;
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(xi)
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financial
information, including information set forth in internal records,
files and ledgers, or incorporated in profit and loss statements,
fiscal reports and business plans;
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(xii)
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Active
Prospective Acquisitions of such specified Person as of such date,
and all financial data, pricing terms, information memoranda and
due diligence reports relating thereto;
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(xiii)
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Technology and
e-commerce strategies, business plans and implementations,
inventions, algorithms, computer hardware, software and
applications (including but not limited to any source code, object
code, documentation, diagrams, flow charts, associated with the
development or use of the foregoing computer software);
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(xiv)
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all internal
memoranda and other office records, including electronic and data
processing files and records; and
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(xv)
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any other
information constituting a trade secret under the governing trade
secrets law.
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“ Goodwill ”
means the expectation of continued patronage from Client Accounts
and new patronage from prospective clients.
“ Person ” means
an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated
organization, a limited liability company, or a governmental entity
(or any department, agency, or political subdivision
thereof).
“ USI Company ”
means any USI Company to which Executive provides services on
behalf of the Company during the term of this Agreement.
“ USI Business ”
means the businesses provided by any of the USI Companies
(including, without limitation, the providing of (i) insurance
agency and brokerage, and related insurance services, including,
without limitation, risk management and loss control, cost
containment, analysis of loss exposures and designs, catastrophic
case management, loss reserves and rate reviews, performance of
cash flow studies, administration of risk funding and transfer
techniques, captive company formation, self-insurance consulting,
reinsurance and excess stop loss (both specific and aggregate)
placement, management of insurance programs (including programs
with respect to membership associations and congregations), third
party administration, actuarial and administrative services for
pension and health plans, compensation programs and employee
communications; (ii) managed care consulting services and
related legal assistance; (iii) human resource and employee
compensation consulting services and related legal assistance; and
(iv) any insurance or financial services relating to any of
the foregoing).
“ USI Companies ”
means USI, its subsidiaries (including the Company), its
“affiliates” and “associates” (as defined
in Rule 12b-2 of the regulations promulgated under the Exchange
Act, without regard to whether any party is a
“registrant” under such Act), and any of their
successors or assigns.
2 . POSITION,
RESPONSIBILITIES AND TERM
2.1. Executive’s
Position. On the terms and subject to the conditions set
forth in this Agreement, the Company shall employ Executive to
serve as Vice President, Operations of the Company and USI.
Executive shall report to the Chief Operating Officer of USI (the
“ USI COO ”).
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2.2 Executive’s
Responsibilities . The Executive shall perform all duties
customarily attendant to the position and shall perform such
services and duties commensurate with such positions as may from
time to time be reasonably prescribed by the USI COO.
2.3 No Conflicts of
Interest. Executive further agrees that throughout the
period of his employment hereunder, he will not perform any
activities or services, or accept such other employment which would
be inconsistent with this Agreement, the employment relationship
between the Parties, or would interfere with or present a conflict
of interest concerning Executive’s employment with USI or the
Company; provided , that Executive shall be permitted to
serve on the boards of directors of such other companies as the USI
Chief Executive Officer (“USI CEO”) shall approve, such
approval not to be unreasonably withheld, and that Executive may
make personal investments and may act as a director and engage in
other activities for any charitable, educational, or other
nonprofit institution, as long as such investments and activities
do not materially interfere with the performance of
Executive’s duties hereunder. Executive agrees to adhere to
and comply with any and all business practices and requirements of
ethical conduct set forth in writing from time to time by the
Company in its employee manual or similar publication.
2.4. Term. Executive
shall be employed commencing on January 26, 2004 and ending on
the date on which employment is terminated in accordance with the
provisions of Section 8 of this Agreement. The foregoing term
of employment shall be referred to hereinafter as the “
Term ”.
3. ACCEPTANCE
3.1 Executive hereby accepts such
employment and agrees that throughout the period of employment
hereunder, Executive will devote his full business time, attention,
knowledge and skills faithfully, diligently and to the best of his
ability, in the furtherance of the business of the USI
Companies.
4. COMPENSATION
4.1. Base Salary . As
compensation for the services to be rendered by Executive
hereunder, the Company agrees to pay Executive, and Executive
agrees to accept, a base salary (“ Base Salary
”) during employment hereunder at the annual rate of not less
than $ 200,000; provided , however , that the USI CEO
may determine to increase but not decrease the Executive’s
Base Salary in such amount as the USI CEO may determine. The Base
Salary shall be payable in equal installments by the Company
according to its normal payroll practices.
4.2 Performance Bonus
. As additional compensation for the services to be rendered by
Executive hereunder, Executive shall be eligible to receive from
time to time during the term hereof, a bonus under the USI
Management Incentive Plan, as may be amended from time to time at
the sole discretion of the Board or Compensation Committee of the
Board (the “ USI Plan ”). As Vice President,
Operations, Executive is entitled to a percentage of Base Salary
award which is in turn based upon the USI and Executive performance
criteria set forth in the USI Plan. At no time during the Term
hereof will Executive’s “target” award
opportunity be any
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less than 60 % of Executive’s then
Base Salary. Any awards under the USI Plan which exceed target
performance will be in such amount as the USI CEO may determine,
and any decision of USI CEO shall be in his sole and unreviewable
discretion. Any award under the USI Plan will be paid to the
Executive no later than 90 days following the end of the
performance year.
4.3 2002 Equity Incentive
Plan . As additional compensation for the services to be
rendered by Executive hereunder, Executive shall be eligible to
receive from time to time during the Term hereof, stock based
compensation awards under the 2002 Equity Incentive Plan, as may be
amended from time to time at the sole discretion of the Board or
Compensation Committee of the Board. Moreover, as additional
specific consideration to the Executive for entering into this
Agreement, USI’s CEO agrees to recommend to the USI
Compensation Committee of the Board for approval an award of 75,000
options to purchase USI stock.
4.4 Benefits. In
addition to such compensation, Executive shall be entitled to the
benefits whi
