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Exhibit
10.1
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment
Agreement (this “Agreement”) is effective as of
October 25, 2007 and is between the Argonaut Group, Inc. a
Delaware corporation (the “Company”) and Dale H.
Pilkington (the “Employee”).
RECITALS:
The Company desires to obtain
the services of the Employee in the business of the Company as its
President.
The Employee desires to
provide such services as an employee of the Company.
NOW, THEREFORE, in
consideration of the promises and mutual agreements herein set
forth, the parties hereby agree as follows:
| 1. |
Employment Period. The period of employment of Employee by the
Company under this Agreement (the “Employment Period”)
shall terminate on October 25, 2010. Thereafter, as of the
date the Employment Period (as it may be extended from time to time
under this paragraph) would otherwise end, the Employment Period
will be automatically extended for 12 months, unless one party to
this Agreement provides notice of non-renewal to the other at least
six months before the day that would be the last day of the
Employment Period in the absence of such renewal. The Employment
Period may be sooner terminated in accordance with Section 7
of this Agreement. |
| 2. |
Duties. During his employment by the Company, the Employee
shall perform such duties as shall from time to time be delegated
or assigned to him by the Company. Employee agrees to serve the
Company in the position of President, reporting to the
Company’s Chief Executive Officer, and to perform diligently
and to the best of his abilities the duties and services pertaining
to such office. Employee’s employment shall also be subject
to the policies maintained and established by the Company, if any,
as the same may be amended from time to time. Employee’s
principal place of business with the Company will, unless otherwise
agreed by the Company and Employee, be in the San Antonio, Texas
metropolitan area. Employee acknowledges and agrees that Employee
owes a fiduciary duty of loyalty, fidelity and allegiance to act at
all times in the best interests of the Company and to do no act
that would injure the business, interests, or reputation of the
Company or any of its affiliates. In keeping with these duties,
Employee shall make full disclosure to the Chief Executive Officer
of all business opportunities pertaining to the business of the
Company or its affiliates and should not appropriate for
Employee’s own benefit, business opportunities that fall
within the scope of the businesses conducted by the Company and its
affiliates. |
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(a) |
Base Salary.
The Company shall pay to Employee an initial base salary of $38,750
per month (the “Base Salary”), less all applicable
legal deductions and/or withholding. If annualized, this Base
Salary would equal $465,000 per year, less all applicable legal
deductions and/or withholding. The Base Salary shall be
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payable in accordance with
the Company’s policies in effect from time to time, but in
any event no less frequently than monthly. The Base Salary shall be
reviewed annually by the Company for possible increase (but not
decrease) and the Company may, in its sole discretion, choose to
increase the Base Salary during the Employment Period of this
Agreement. If the Base Salary is increased by the Company, such
Base Salary then constitutes the Base Salary for all purposes of
this Agreement.
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(b) |
Incentive Bonus. In addition to the Base Salary, during the
Employment Period of this Agreement, Employee may, in the sole
discretion of the Company from time to time, be awarded an
incentive bonus and/or profit sharing award based upon the
achievement of specific Company objectives as determined by the
Company and set forth in one or more separate written plans
(collectively, the “Bonus Plan”). Employee’s
initial target bonus under each of the Annual Incentive Plan and
the Annual Long Term Incentive Plan will be 120% of his Base
Salary. |
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(c) |
As additional compensation for the Employee, the Company shall
provide or maintain for Employee medical, welfare and health
insurance benefits on the same terms and conditions as are made
available to all employees of the Company generally. |
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(d) |
During the Employment Period prior to May 1, 2008, the
Employee will be reimbursed by the Company for an executive
furnished apartment or hotel accommodations and other living
expenses in the San Antonio area, all in accordance with the
Company policies as in effect from time to time. |
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(e) |
The Company will reimburse the Employee for relocation costs
associated with obtaining his residence in the San Antonio
metropolitan area as will be negotiated and agreed upon by the
Company and the Employee on a mutually acceptable
basis. |
| 4. |
Vacation. Employee shall be entitled to a reasonable
vacation(s) during each year of his employment under this
Agreement. |
| 5. |
Reimbursement For Expenses; Working Space. The Company shall
reimburse the Employee for all reasonable and necessary travel
expenses and other disbursements incurred by him for or on behalf
of the Company in the course and scope of his employment under this
Agreement. The Company shall furnish Employee with offices,
supplies, equipment and such other facilities and services as are
suitable for performance of Employee’s duties
hereunder. |
| 6. |
Remedies for Breach. In addition to the rights and remedies
provided in Section 7, and without waiving the same if
Employee breaches, or threatens to breach, any of the provisions of
Sections 9, 10 or 11, the Company shall have the following rights
and remedies, in addition to any others, each of which shall be
independent of the other and severally enforceable: |
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(a) |
The right and remedy to have such provisions specifically
enforced by any court having equity jurisdiction. Employee
specifically acknowledges and agrees that any breach or threatened
breach of the provisions of Sections 9, 10 or 11 hereof will cause
irreparable injury to the Company and that money damages will not
provide an adequate remedy to the Company. Such injunction shall be
available without the posting of any bond or other security. If the
Employee is determined to have breached any provision of Sections
9, 10 or 11 the court or arbitrators shall extend the effect of the
non-competition provisions for an amount of time equal to the time
the Employee was in breach thereof. |
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(b) |
The right to require Employee to account for and pay over to
the Company all compensation, profits, monies, accruals, increments
or other benefits (hereinafter collectively the
“Benefits”) derived or received by the Employee as a
result of any transactions constituting a breach of any of the
provisions of Sections 9, 10 or 11. |
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(c) |
Upon discovery by the Company of a breach or threatened breach
of Sections 9, 10 or 11, the right to immediately suspend payments
to Employee under Section 3 or 8(b) pending a resolution of
the dispute. |
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(d) |
The right to terminate Employee’s employment pursuant to
Section 7. |
| 7. |
Termination of Agreement. |
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(a) |
Death. This Agreement shall automatically terminate upon the
death of Employee. |
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(b) |
Disability. If, as a result of Employee’s incapacity due
to physical or mental illness, Employee shall have been
substantially unable, either with or without reasonable
accommodation, to perform his duties hereunder for an entire period
of six (6) consecutive months, and within thirty
(30) days after written Notice of Termination is given after
such six (6) month period, Employee shall not have returned to
the substantial performance of his duties on a full-time basis, the
Company shall have the right to terminate Employee’s
employment hereunder for Disability, and such termination in and of
itself shall not be, nor shall it be deemed to be, a breach of this
Agreement. Any dispute between the Employee and the Company
regarding whether Employee has a Disability shall be determined in
writing by a qualified independent physician mutually acceptable to
the Employee and the Company. If the Employee and the Company
cannot agree as to a qualified independent physician, each shall
appoint a physician and those two physicians shall select a third
who shall make such determination in writing. The determination of
Disability made in writing to the Company and Employee shall be
final and conclusive for all purposes of the Agreement. Employee
acknowledges and agrees that a request by the Company for such a
determination shall not be considered as evidence that the Company
regarded the Employee as having a Disability. |
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(c) |
Termination By Company For Cause. The Company may terminate
this Agreement upon written notice to Employee at any time for
“Cause” in accordance with the procedures provided
below. For purposes of this Agreement, “Cause” shall
mean: |
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(i) |
other than as a result of the Employee having a Disability, the
willful and continued failure by the Employee to substantially
perform his duties with the Company within a reasonable period of
time after a written demand for substantial performance is
delivered to the Employee by the Company, which demand shall
specifically identify the manner in which the Company believes that
the Employee has not substantially performed his
duties. |
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(ii) |
the failure of Employee to obtain a personal residence in the
San Antonio area by May 1, 2008; |
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(iii) |
the entry of a plea of guilty or judgment entered after trial
finding Employee guilty of a crime punishable by death or
imprisonment in excess of one year involving moral turpitude
(meaning a crime that includes the commission of an act of gross
dishonesty or bad morals); |
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(iv) |
willfully engaging by Employee in conduct that the Employee
knows or reasonably should know is detrimental to the reputation,
character or standing or otherwise injurious to the Company or any
of its shareholders, direct or indirect subsidiaries and
affiliates, monetarily or otherwise; |
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(v) |
without limiting the generality of Section 7(c)(i), the
breach or threatened breach of any of the provisions of Sections 9,
10 or 11; or |
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(vi) |
a final ruling (or interim ruling that has not been stayed by
appeal) in any state or federal court or by an arbitration panel
that the Employee has breached the provisions of a non-compete or
non-disclosure agreement, or any similar agreement or
understanding, which would in any material way limit the
Employee’s ability to perform under this Agreement now or in
the future. |
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(d) |
Termination By Company Without Cause. The Company may terminate
this Agreement at any time, and for any reason, by providing at
least thirty (30) days written notice to Employee. |
| 8. |
Effect of Termination. Upon the termination of this Agreement,
no rights of Employee which shall have accrued prior to the date of
such termination, including the right to receive bonus Fully-Earned
(as herein defined) through the date of such termination, shall be
affected in any way. |
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(a) |
Upon Death of Employee. |
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During the Employment Period,
if Employee’s employment is terminated due to his death,
Employee’s estate shall be entitled to receive (i) the
Base Salary set forth in Section 3 accrued through the date of
death, (ii) any bonus Fully-Earned through the date of death,
and (iii) a lump sum payment in cash and/or common stock, as
the Company elects, equal to the net value of all unvested equity
compensation as of the date of death as if fully vested and
exercised on the date of death; provided, however, Employee’s
estate shall not be entitled to any other benefits (except as
provided by law or separate agreement). “Fully-Earned”
shall mean that for purposes of determining whether the Employee
shall be entitled to a bonus, that such Employee shall be treated
as if he had been employed through the last date of the regular
period for determining whether or not a bonus is payable in the
standard manner
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