Employment Contract - Provident Indemnity Life Insurance Co., Provident American Corp. and Edward Bolton
EMPLOYMENT CONTRACT
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THIS EMPLOYMENT CONTRACT ("Agreement") is dated as of the _____ day of
November, 1996, effective as of April 1, 1996, by and between PROVIDENT
INDEMNITY LIFE INSURANCE COMPANY, a stock life insurance company organized under
the laws of the Commonwealth of Pennsylvania (the "Company"), PROVIDENT AMERICAN
CORPORATION, a Pennsylvania corporation ("PAMCO"), each with an address at 2500
DeKalb Pike, P.O. Box 511, Norristown, Pennsylvania 19404-0511, and EDWARD
BOLTON, an individual ("Employee"), residing at Exton, Pennsylvania.
BACKGROUND
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A. The Company desires to employ and Employee is desirous of becoming
employed by the Company as Vice President - Systems of the Company and PAMCO,
and further, to accept the duties and responsibilities set forth in this
Agreement.
B. The parties are desirous of entering into an Employment Agreement for
the payment of compensation to Employee in an amount which is fair and
reasonable for the duties to be performed.
NOW THEREFORE, in consideration of the foregoing and of the
mutual promises and undertakings contained in this Agreement, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereby agree
as follows:
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1. TERM AND DUTIES OF EMPLOYMENT.
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a. Term. The Company hereby employs Employee for a term
commencing effective as of April 1, 1996 and ending April 1, 1999, unless
terminated earlier as hereinafter provided. Thereafter, the Company may extend
the term of this Agreement on a year-to-year basis, provided employee is in
agreement with such extension.
b. Duties. Employee shall be employed as Vice President -
Systems of the Company and PAMCO, and in such capacity, he shall perform the
duties and responsibilities customarily performed by an officer in that
capacity, including but not limited to the overall responsibility for the
successful operation and management of the Company's computer and information
systems, as well as such other duties and responsibilities as may be reasonably
determined and assigned to him from time to time by senior management of the
Company. Employee hereby accepts such employment and agrees to perform all
duties and responsibilities as may be reasonably required of him.
2. EXCLUSIVE EMPLOYMENT. During his employment pursuant to this
Agreement, Employee shall devote his principal business time, attention, energy,
skill, and best efforts to the business and affairs of the Company and his
duties under this Agreement to the exclusion of active work in other business
interests (except passive investments by Employee), and shall perform faithfully
to the fullest extent of his ability all of the duties which relate to his
position of employment with the Company.
3. COMPENSATION AND REIMBURSEMENT OF EXPENSES.
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a. For all services rendered by Employee under this
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Agreement, and in addition to other monetary or employee benefits, the Company
shall pay Employee the following amounts:
(1) Salary. Employee shall be paid an annual
salary in the amount of $90,000 for the period commencing effective as of April
1, 1996 and ending April 1, 1999 ("Salary").
(2) Additional Benefits.
(a) Employee shall be included in the
Company's group life, health, disability, major medical, and other insurance
coverages provided to the Company's employees during the term of this Agreement
and any renewal thereof. Employee shall also be included as a member in any
profit-sharing, pension, retirement, or other employee benefit plan which may be
adopted by the Company during the term of this Agreement or any renewal thereof,
provided such plan applies to other employees of the Company and Employee has
met the qualification requirements thereof.
(b) Paid vacation in such amount as shall
from time to time be agreed upon between Employee and the Company, but which
shall not be less than two (2) weeks in any calendar year. Employee shall not be
entitled to carry over any unused vacation accrued during any calendar year to
any succeeding year, unless approved in advance by the Company.
(c) Upon submission of receipts and proper
documentation, the Company hereby agrees to reimburse Employee for expenses
incurred by Employee in connection with business travel, including parking,
tolls, mileage, lodging and meals, business entertainment, dues, subscription
fees, and membership fees to any professional association or organization
related to the Company's business of which Employee is a member or shall become
a member during the term hereof or any renewal thereof.
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(d) In the event that Employee, during the
term of this Agreement, is transferred to a new principal place of work, the
Company shall be liable only for such moving and traveling expenses as are duly
authorized in advance in writing given to Employee by the Company in accordance
with the then regular policy of the Company.
4. STOCK AWARDS. In further consideration of Employee's entering
into this Agreement and his future services to the Company and its subsidiaries,
PAMCO agrees to award Employee up to 90,000 shares in the aggregate ("Aggregate
Stock Award") of its Common Stock, $.10 par value ("Common Stock") as follows:
a. Upon Signing of Employment Contract. Upon the signing
of this Agreement, PAMCO shall cause 15,000 shares of its Common Stock to be
issued to Employee, 5,000 shares in recognition of each of the three (3) years
of the term of this Agreement.
b. Annual Performance Criteria. Effective on each of April
1, 1997, April 1, 1998, and April 1, 1999 (collectively, the "Anniversary
Dates"), provided Employee is still actively and exclusively employed by the
Company and has met the performance criteria set forth on Exhibit "A" attached
hereto (the "Annual Performance Criteria") as of each of the respective
Anniversary Dates, PAMCO shall cause 25,000 shares of its Common Stock to be
issued to Employee (the "Annual Stock Award"). PAMCO agrees that if the Annual
Performance Criteria have been satisfactorily performed by Employee prior to the
respective Anniversary Dates (such determination to be made in the sole
discretion of the Company's senior management), it will cause the Annual Stock
Award to Employee for such year to be issued sooner than the Anniversary Date.
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c. In Event of Termination Prior to Receipt of Annual
Stock Award. Notwithstanding the foregoing: (i) in the event of Employee's
death, (ii) permanent disability (within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended), or (iii) termination without cause
at any time prior to the expiration of this Agreement, provided the Aggregate
Stock Award has not previously been issued to Employee, PAMCO shall cause to be
issued to Employee or Employee's estate, as the case may be, the balance of the
Aggregate Stock Award, if any, as of such date. Upon termination for any other
reason, Employee shall not thereafter be entitled to any Annual Stock Award.
d. Investment Representation. Employee acknowledges that
the Common Stock has not been registered under the Securities Act of 1933, as
amended (the "Act"), and agrees that he is acquiring the Common Stock for
investment purposes only and not with a view to any sale or other distribution
thereof in a manner that would violate the Act. Employee consents to the
placement of a legend or legends along the lines of the following on the
certificates representing the Common Stock to be issued to Employee:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM ANY SUCH REQUIREMENTS."
5. TERMINATION OF EMPLOYMENT. Notwithstanding anything to the
contrary contained herein, Employee's employment hereunder:
a. Shall be automatically terminated effective on the date
of Employee's death.
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b. May be terminated by Employee by written notice to the
Company, in which event such termination shall become effective 30 days after
the giving of notice, or earlier as may be specified by the Company after
receipt of Employee's notice of termination.
c. May be terminated by the Company for cause upon 30
days' prior written notice to Employee, such termination to become effective as
provided in the written notice:
(1) if Employee shall fail or become unable to
perform any of his duties hereunder due to illness or other incapacity and such
illness or incapacity shall continue for a period of more than 180 days;
(2) if Employee shall breach or violate any of the
provisions of this Agreement, which breach or violation shall not be cured
within 30 days after written notice thereof to Employee; or
(3) for incompetence, alcohol or drug addition,
insubordination, gross negligence, any violation of any express direction of the
Company's senior management or Board of Directors of any reasonable rule or
regulation established by the Company regarding the conduct of its business,
which violation shall not be cured within 10 days after written notice thereof
to Employee.
d. Employee's employment hereunder may also be terminated
without cause by the Company by written notice to Employee, and such termination
shall become effective as provided in such notice, provided, however, that upon
such termination, Employee shall be entitled to the termination compensation
benefits described in Paragraph 6 below.
6. TERMINATION COMPENSATION BENEFITS. If this Agreement is
terminated by the Company prior to April 1, 1999 without cause as specified in
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Paragraph 5.d hereof, Employee agrees that in lieu of any other compensation or
payment, and as liquidated damages and in complete satisfaction of any and all
liabilities which the Company may have or have had to Employee, the Company
shall issue to Employee the balance of the Aggregate Stock Award, if any, as of
such date, and shall pay Employee and Employee shall accept an amount equal to
the Salary for the balance of the term of this Agreement, payable (at the option
of the Company) either as and when such Salary would have been paid pursuant to
this Agreement, or in a lump-sum payment. Upon the payment of the amount set
forth herein and the issuance of the balance of the Aggregate Stock Award, if
any, each party agrees to and does release the other party from all liabilities,
damages, claims, or demands of any kind whatsoever arising as a result of the
employment of Employee by the Company and/or PAMCO, excepting and excluding
therefrom the obligations of Employee pursuant to the provisions of Paragraph 8
hereof.
7. INDEMNITY. The Company agrees to indemnify Employee to the
extent provided in any insurance policy customarily and generally available for
the purpose of covering the officers and directors of the Company, and in
accordance with the terms and conditions of Section VI of the By-Laws of the
Company, which provides for a plan of indemnification.
8. RESTRICTIVE COVENANTS.
a. Agreement to Keep Confidential. Employee acknowledges
that he will be subject to certain restrictive covenants concerning his
employment. In consideration of the terms of this Agreement, Employee
acknowledges and agrees that he will acquire confidential information of a
special and unique nature and value relating to the Company's intentions,
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plans, procedures, confidential reports, financial resources, shareholders,
investors, and prospective business. In this regard, Employee hereby agrees that
he will not:
(1) persuade or attempt to persuade any customer
of the Company to cease doing business with the Company, or persuade or attempt
to persuade any potential customer not to become a customer of the Company;
(2) persuade or attempt to persuade any employee
of the Company to leave the Company's employ, or to become employed by any
person, firm, or corporation other than the Company;
(3) divulge to anyone (other than the Company or
any person employed or designated in writing by the Company), make any
unauthorized use of, or publish or use for their benefit or to the Company's
detriment, any knowledge or information of any type whatsoever of a confidential
nature relating to the businesses of the Company.
b. Covenant Not to Compete. In recognition of the
foregoing agreements, in the event that Employee's employment pursuant to this
Agreement is terminated for any reason by either party, Employee agrees that he
shall not for a period of 12 months following the date of such termination or
resignation, within a geographic limit of 50 miles of any location of the
Company, any of its affiliated companies, or any agency, directly or indirectly
own, manage, operate, consult, join, control, invest in, be employed by, or
participate in the formation, ownership, management, operation or control of, or
be connected in any manner with, any existing or proposed insurance company,
insurance holding company, insurance agency, or any investor group forming or
proposing to form either an insurance company, insurance holding company, or
insurance agency that engages in business that
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competes with the business of the Company.
c. Specific Enforcement. The parties recognize that the
services rendered by Employee hereunder are special, unique, and of an
extraordinary character, and in the event of Employee's breach of the terms and
conditions of this Agreement, or in the event Employee shall leave Company's
employment and breach the terms and conditions of this Agreement, Employee
consents to and authorizes the Company to institute and prosecute proceedings in
any court of competent jurisdiction, either in law or in equity, to enjoin
Employee from performing services in violation hereof during the term of this
Agreement or the 12-month period specified in this Agreement. The parties agree
that the period and geographic areas of restriction imposed upon Employee by
this Agreement are fair and reasonable and are reasonably required for the
protection of the Company and its goodwill.
9. MISCELLANEOUS.
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a. Assignment. This Agreement shall not be assignable by
either party, except that without the prior written consent of the other party:
(1) it may be assigned by the Company to any
person or entity acquiring all or substantially all of the assets thereof; and
(2) it may be assigned by Employee as to his right
to payment, but not as to any of his obligations hereunder; and
(3) Company shall have the right to assign all or
any portion of its rights hereunder to PAMCO or any other affiliate or
subsidiary of the Company.
b. Entire Agreement; Amendments; and Waivers. This
Agreement constitutes the entire agreement among the parties and supersedes all
prior
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oral or written agreements relative to the employment of Employee by the
Company. Any amendments to the Agreement must be in writing, signed by each
party hereto. No waiver of any breach of this Agreement shall be held to
constitute a wavier of any other or subsequent breach.
c. Severability of Provisions. If any of the provisions of
this Agreement or the application of any such provision shall for any reason be
held invalid by a court of competent jurisdiction, such invalidity shall not
affect or impair any other provision, it being the intention of the parties that
such other provisions shall be and remain in full force and effect.
d. Compliance and Confidentiality. Employee agrees to
comply with all laws and regulations in the conduct of his duties and
obligations under this Agreement, and to comply with all regulations,
resolutions, and policies of the Company.
e. Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been given at the time when mailed at any office of the United
States Postal Service enclosed in a certified postage-paid envelope addressed to
the respective party at the addresses set forth herein or to such changed
address as such party may have fixed by notice to the other party, provided,
however, that any notice or change of address shall be affected only upon
receipt and further provided that any notice may be personally delivered to the
respective party by the party giving notice in lieu of being mailed.
f. Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the Company, its successors and assigns,
and any corporation which may acquire all or substantially all of the Company's
assets
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or into which the Company may be consolidated or merged, and upon Employee, his
heirs, executors, administrators and legal representatives.
g. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
h. Waiver.The failure of any party to insist in any one or
more instances upon performance of any terms or conditions of this Agreement
shall not be construed as a waiver of future performance of any such term,
covenant or conditions, but the obligations of either party with respect thereto
shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal the day and year above first written.
WITNESS:
(SEAL)
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EDWARD BOLTON
PROVIDENT INDEMNITY LIFE INSURANCE
COMPANY
Attest:
By:
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M. F. Beausang, Jr., Secretary James O. Bowles, President
PROVIDENT AMERICAN CORPORATION
Attest:
By:
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M. F. Beausang, Jr., Secretary James O. Bowles, President
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EXHIBIT "A" TO BOLTON EMPLOYMENT CONTRACT
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ANNUAL PERFORMANCE CRITERIA FOR VICE PRESIDENT - SYSTEMS
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Following is the Annual Performance Criteria for the Vice President - Systems
for Provident Indemnity Life Insurance Company, its parent company, Provident
American Corporation, and each of their subsidiaries and affiliates:
o Work closely with outside consulting firms in developing annual
information services plans by November 30, 1996.
o Establish service levels for all services provided by information
services and how these will be achieved and monitored.
o Oversee all information services projects with accountability for
results and schedules.
o Establish budget for all system development, equipment, software,
and training.
o Establish monthly indicators including service level reports -
project status and budget status.
o Meet target objectives and schedules of Provident Strategic
Information Services Plan to be established in conjunction with
outside consulting firms and other target objectives and
schedules established by other consultants of Provident American
Corporation and its subsidiaries and affiliates.