Sample Business Contracts

Employment Contract - Provident American Corp., NIA Corp., Provident American Life & Health Insurance Co. and James O. Bowles

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7th day of November, 1996, by and among PROVIDENT AMERICAN CORPORATION, a
Pennsylvania corporation ("PAMCO"), NIA CORPORATION, a Colorado corporation
domiciled insurance company ("PALHIC") (formerly known as UNION BENEFIT LIFE
INSURANCE COMPANY ("UBLIC")), and JAMES O. BOWLES, an individual ("Employee"),
c/o NIA Corporation, 1620 Kipling Street, Lakewood, Colorado 80215.


        A. Employee, NIA, and UBLIC (now known as PALHIC) entered into an
Employment Contract dated as of May 17, 1996 (the "Employment Contract")
pursuant to which Employee became employed as the President of NIA, ABC, and

        B. Effective as of October 1, 1996, Employee was appointed as President
of PAMCO and Provident Indemnity Life Insurance Company ("PILIC"), in addition
to PALHIC, NIA and ABC, and such other subsidiaries or affiliates as are from
time-to-time designated in writing as coming within the scope of the obligations
to be performed under this Agreement, and the parties are desirous of amending
and restating the Employment Contract as hereinafter set forth to provide for
the payment to Employee of compensation in an amount which is fair and
reasonable for the additional duties to be performed. For purposes hereof, the
term "Company" shall mean PAMCO, PILIC, PALHIC, NIA, ABC, and such other
subsidiaries or affiliates as are from time-to-time designated in writing as
coming within the scope of the obligations to be performed under this Agreement.

        NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants 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 hereto agree
as follows:

               1.     TERMS AND DUTIES OF EMPLOYMENT.

                     a. Term. The Company hereby employs Employee for a term
commencing effective as of October 1, 1996 through September 30, 1998, unless
terminated earlier as hereinafter provided. Thereafter, the Company extend


the term of this Agreement on a year-to-year basis by action of the Board of
Directors of the Company taken prior to the end of any then current term,
provided Employee is in agreement with such extension.

                     b. Duties. Employee shall be employed as President of the
Company, and in such capacity, he shall perform such duties and responsibilities
as are 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 and its marketing of insurance products, as well as
such other duties and responsibilities as may be reasonably determined and
assigned to him from time-to-time by the Board of Directors of the Company.
Employee hereby accepts such employment and agrees to perform all duties and
responsibilities as may be reasonably required of him. In addition, Employee
agrees to accept appointment as an officer or director of any other subsidiary
or affiliate of PAMCO.

               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, subject to reasonable vacations
compatible with his position.


                      a. For all services rendered by Employee under this
Agreement, and in addition to other monetary or other employee benefits, Company
shall pay Employee the following amounts:

                              (1) Base Salary. Employee shall be paid a base
salary in the amount of $195,000 for the period commencing as of May 17, 1996
and ending May 17, 1997, which shall be increased at the end of each subsequent
twelve (12) month period during the term of this Agreement by a minimum of the
increase in the Cost of Living Index (as defined herein) ("Base Salary"). For
purposes of this Agreement, the term "Cost of Living Index" shall refer to the
percentage change (increases only) of the Consumer Price Index ("CPI"), all
items, for the City of Philadelphia, Pennsylvania, compiled by the United States
Department of Labor, Bureau of Labor Statistics, Washington, D.C., or its
successor index. If at the time of adjustment the CPI is no longer reported or
its basic principle has been altered, an alternative method shall be used to
equitably reflect the percentage of increase in the cost of living.

                              (2) Incentive Compensation. In addition to the
compensation described in subparagraph (1) above, Employee may be eligible to
receive additional compensation in the form of an annual incentive bonus, if
such has been recommended and approved by the Executive Committee or the Board
of Directors of the Company. The amount of the annual incentive bonus, if any,
is subject to a formula that has been approved by the Board of Directors of the
Company. Any annual incentive bonus awarded to Employee shall be paid


to Employee as soon as practicable after the end of the fiscal year of the
Company for which such incentive bonus has been awarded.

                              (3)    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 of four (4) weeks, which
vacation shall be taken at such times as are mutually convenient to Employee and
the Company. 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.

                                     (d) During the term of this Agreement, the
Company shall provide Employee with an automobile for his exclusive use for
business purposes. The selection of the make and model of an automobile shall be
at the discretion of Employee with the cost of the vehicle not to exceed $500
per month.

                                     (e) 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.

Employee shall be granted an option to purchase 50,000 shares of PAMCO's Common
Voting Stock, $.10 par value, at the mean between the bid and ask price as of
the date hereof, under the 1996 Employee Incentive Stock Option Plan, which
option is exercisable in its entirety as of the date of grant. From time-to-time
PAMCO may grant additional options to purchase shares of PAMCO's Common Stock to

               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.

                      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. As used herein, the term "for cause" shall be
defined as follows: If at any time during the term of this Agreement or while
any termination compensation benefits are being paid to Employee hereunder,
Employee shall: (i) 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; (ii) become incompetent, suffer from alcohol
or drug addiction, 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, (iii) commit any act of malfeasance or
wrongdoing affecting the Company, PAMCO, or any of their subsidiaries or
affiliates, (iv) breach or violate any covenant not to compete or any other term
or provision of this Agreement, or (iv) engage in any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company, PAMCO, or any of
their subsidiaries or affiliates.

                      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
payments described in Paragraph 6 below.

               6. TERMINATION COMPENSATION BENEFITS. If this Agreement is
terminated by the Company without cause (as specified in 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 pay
Employee and Employee shall accept an amount equal to the Base Salary in effect
on the date of termination for the balance of the term of this Agreement, which
amount shall be payable, at the option of the Company, either as and when such
Base Salary would have been paid pursuant to this Agreement, or in a lump-sum
payment. Upon the payment of the amount set forth herein, each party agrees to
and does release the other party, its subsidiaries, affiliates, successors and
assigns, if any, from all liabilities, damages, claims, or demands of any kind
whatsoever arising as a result of the employment of Employee by the Company,
excepting and excluding therefrom the obligations of Employee pursuant to the
provisions of Paragraph 7 hereof.



               7.     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 intentions, plans,
procedures, confidential reports, financial resources, shareholders, investors,
and prospective business of the Company and any of its subsidiaries or
affiliates. In this regard, Employee hereby agrees that he will not:

                              (1) persuade or attempt to persuade any customer
of the Company or any of their subsidiaries or affiliates to cease doing
business with the Company or any of its subsidiaries or affiliates or persuade
or attempt to persuade any potential customer not to become a customer of the
Company or any of its subsidiaries or affiliates;

                              (2) persuade or attempt to persuade any employee
of the Company or any of its subsidiaries or affiliates to leave the employ of
the Company or any of its subsidiaries or affiliates, or to become employed by
any person, firm, or corporation other than the Company or any of its
subsidiaries or affiliates;

                              (3) divulge to anyone (other than the Company or
any of its subsidiaries or affiliates or any person employed or designated in
writing by the Company or any of its subsidiaries or affiliates), make any
unauthorized use of, or publish or use for their benefit or to the detriment of
the Company or any of its subsidiaries or affiliates, any knowledge or
information of any type whatsoever of a confidential nature relating to the
businesses of the Company or any of its subsidiaries or affiliates.

                      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:

                              (1) if the termination is by reason of the
resignation of Employee as an employee or his termination by the Company for
cause (as defined in Paragraph 5.c above), Employee agrees that he shall not for
period of twelve (12) months following the date of such termination or
resignation, within a geographic limit of 50 miles of any location of the
Company or any of its subsidiaries or affiliates, 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, or any investor group forming or proposing
to form either an insurance company or insurance holding company that engages in
business that competes with the business of the Company or any of its
subsidiaries or affiliates; and


                              (2) if the termination of Employee is by the
Company without cause, Employee agrees that the period of non-competition
described in subparagraph (1) above shall be void.

                      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.

               8.     MISCELLANEOUS

                      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 any other subsidiary or affiliate of the

                      b. 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.

                      c. 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.

                      d. 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 below 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.

                      e. 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 or into which the Company may be consolidated or merged, and upon
Employee, his heirs, executors, administrators and legal representatives.

                      f. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

                      g. Entire Agreement/Amendments. This Agreement represents
the entire agreement of the parties, and supersedes all prior understandings and
agreements between the parties, including the Employment Contract dated as of
May 17, 1996. This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.

                      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.

                                     PROVIDENT AMERICAN CORPORATION

------------------------------           ---------------------------------
M. F. Beausang, Jr., Secretary              Alvin H. Clemens, Chairman and
                                            Chief Executive Officer


                                     PROVIDENT AMERICAN LIFE & HEALTH
                                     INSURANCE COMPANY

------------------------------           ---------------------------------
M. F. Beausang, Jr., Secretary              Alvin H. Clemens, Chairman and
                                            Chief Executive Officer


                                     NIA CORPORATION

David W. Ward, Secretary                    James O. Bowles, President


-------------------------------     ----------------------------------- (SEAL)
                                             JAMES O. BOWLES