PRODUCER CONTRACT EMPLOYMENT AGREEMENT
Between
A ______Corporation,
And _____________ as Employee
THIS AGREEMENT, entered into this ___________ day of __________ , 20___ , by and between _____________ (Agency), hereinafter referred to as 'Employer,' and ___________ (Employee), hereinafter sometimes referred to as 'Employee'.
RECITALS
I. Employer is engaged in the business of selling insurance. ___________ Agency is an insurance brokerage company, organized under the laws of the State of _______________________ having its principal office at _______________________ .
II. Employer has been engaged in and has had experience in the insurance business.
III. Employee is willing to be employed by Employer, and Employer is willing to employ Employee on the terms hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS SET FORTH , THE PARTIES HERETO AGREE AS FOLLOWS:
1. Incorporation of Recitals. The recitals hereinabove are incorporated herein by this reference.
2. Employment.
(i) Employer hereby hires Employee to solicit insurance and to collect and to remit premiums thereon for Agency.
(ii) Employee shall be responsible for the payment of all premiums by Employee's insureds. The Employer's Accounts Receivable Control Plan is attached to this Agreement as Exhibit A and will serve as our written policy concerning payment of premium.
(iii) Employee shall be responsible for payment of expenses incurred on behalf of his or her business.
(iv) Employee Automobile. Employee shall, at his or her own cost and expense, procure an automobile for use in traveling about his or her designated territory and making calls on customers and prospective customers. Employee shall further procure and maintain in force an Automobile Liability insurance policy covering such automobile in the minimum amounts of $250,000 for bodily injury or death to one person in one accident, $500,000 for bodily injury or death in one accident, and $100,000 for property damage in one accident, and Employee shall deliver to Employer a true copy of such Automobile Liability insurance policy. Employee agrees to indemnify and hold Employer harmless from any claims arising out of the operation of such automobile by Employee.
(v) Qualification for Surety Bond. Employee agrees that he or she will furnish all information and take any other steps necessary to enable Employer to obtain a Fidelity bond conditioned on the rendering of a true account by Employee of all moneys, goods, or other property which may come into the custody, charge, or possession of Employee during the term of his or her employment. The surety company issuing the bond and the amount of the bond must be acceptable to Employer at the sole discretion of Employer. All premiums on the bond are to be paid by Employer. Failure by Employee to qualify for such bond within sixty (60) days from the date of this Agreement will result in immediate termination of the Employment Contract.
3. Compensation.
(i) Employer shall pay to Employee commission on sales in accordance with the schedule in Exhibit B of this Agreement and by reference made a part hereto.
(ii) The commission rates specified in Exhibit B of this Agreement may be modified by Employer, without previous notice, to conform with the commission prescribed by a statute or by any ruling of any insurance department of this state.
4. Services. Employee agrees to devote his or her full working time and attention to the insurance business for Employer. During the term of the Agreement, Employee shall not, without Employer's express prior written consent, directly or indirectly solicit or write insurance business to or for any other person or firm for compensation or engage in any activity competitive with or adverse to Employer's business or practice, whether alone, as a partner, or as an officer, director, employee, or shareholder of any other corporation, or as a trustee, a fiduciary, or other representative of any other entity. Making passive and personal investments and conducting private business affairs not inconsistent with this Agreement shall not be prohibited under this Agreement.
5. Professional Standards. Employee shall perform his or her duties as an insurance salesperson under this Agreement in accordance with such standards of professional ethics and practice as may from time to time be applicable during the term of his or her employment hereunder.
6. Employee's Authority.
(i) Employee agrees to observe and comply with Employer's rules and regulations as adopted by Employer regarding performance of his or her duties, and to carry out and to perform orders, directions, and policies stated by Employer to Employee periodically, either orally or in writing.
(ii) Employee shall not incur indebtedness in the name of (Agency) nor sign the name of __________ _____________ (Agency) to any contracts.
7. Term. The term of this Agreement shall be for a period of one (1) year beginning on the effective date of this Agreement, subject, however, to prior termination as provided herein. This Agreement shall be automatically renewed for succeeding terms of one (1) year each unless, at least thirty (30) days before expiration of any term, either party shall give written Notice of Intention not to renew this Agreement.
8. Vacation. Employee shall be entitled to an annual vacation of three (3) weeks. Employer requests notification 2 weeks prior to the scheduled vacation date.
9. Termination. Employee's employment with Employer shall be terminated if any of the following occurs:
(i) Whenever Employee shall cease to be licensed as defined by the __________ State Insurance Code;
(ii) Whenever Employer and Employee shall mutually agree in writing to termination;
(iii) On the death of Employee;
(iv) Whenever Employee shall fail to rectify a breach of any of the terms, covenants, and conditions of this Agreement within thirty (30) days after written notice from Employer to cure such default; or
(v) Whenever Employee shall become disabled and the disability continues for a period of twelve (12) consecutive months. For the purposes of this Agreement, 'disability' shall be defined as Employee's inability, through physical or mental illness or other cause, to perform the majority of his or her usual duties.
(vi) Employer may terminate this Agreement without notice for fraud or misconduct on the part of Employee, or for the failure of Employee to comply with the applicable insurance laws of the State of ______ or with the regulation of the department or commission of insurance of such state.
(vii)Employee's employment may be terminated without notice by Employer in the event Employee engages m any personal or professional misconduct which would bring Employer into disrepute or would otherwise be detrimental to Employer's business and business reputation, or if Employee continuously and after written or oral notice from Employer, violates or refuses to comply with employment policies, procedures, standards, and regulations of Employer.
(viii)Upon termination of this Agreement, Employee will surrender to Employer all Confidential Information, including, but not limited to, all lists, charts, schedules, reports, financial statements, books, and records, and all copies thereof, of Employer, and any and all other property belonging to Employer whatsoever which are in Employee's possession or under his or her control.
10. Arbitration. Employer and Employee agree that any unresolved dispute that may arise under the provisions of this Agreement shall be submitted to arbitration in accordance with the rules of the American Arbitration Association. The written determination of the arbitration shall be final, binding, and conclusive on the parties.
11. No Acts Contrary to Law. Nothing contained in this Agreement shall be construed to require the commission of any act contrary to law, and whenever there is a conflict between any provision of this Agreement and any statute, law, ordinance, or regulation, contrary to which the parties have no legal right to contract, then the latter shall prevail; and in such an event, the provisions of this Agreement so affected shall be curtailed and limited only to the extent necessary to bring it within the legal requirements. The several rights and remedies provided for in this Agreement shall be construed as being cumulative, and no one of them shall be deemed to be exclusive of the others or of any right or remedy allowed by law. No waiver by Employer or Employee or any failure by Employee or Employer, respectively, to keep or perform any provisions of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or other provision.
12. Covenants and Conditions. If any portion of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable by reason of any rule of law or public policy, all other provisions of this Agreement shall nevertheless remain in effect. No provision of this Agreement shall be deemed dependent on any other provision unless so expressed herein.
13. Complete Agreement. This contract constitutes the sole and complete Agreement between Employer and Employee with respect to the subject in it. No verbal or other statements, inducements, or representations have been made to or relied upon by Employee, and no modification hereof shall be binding upon Employer unless in writing and signed by Employer or his or her successor or assigns.
14. Assignment Prohibited. This Agreement is personal to each of the parties hereto, and neither party may assign not delegate any of its rights or obligations hereunder without first obtaining the written consent of the other party.
15. Amendments. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.
16. Governing Law. This Agreement shall be governed in all respects, whether as to validity, construction, capacity, performance, or otherwise, by the laws of the [State].
17. Litigation. If legal action is instituted upon this Agreement, in additional to any penalties provided herein, the unsuccessful party shall pay costs of suit and reasonable attorney's fees to the prevailing party.
18. Vesting of Employee's Book of Business. Employee will receive ownership in his or her Book of Business up to twenty-five percent (25%) of its agreed value. This ownership will begin vesting upon the Producer's reaching a production qualification level of $100,000 gross revenue.
Vesting will be by the following formula:
Year one after qualification 5%
Year two after qualification 10%
Year three after qualification 15%
Year four after qualification 20%
Year five after qualification 25%
At the end of five years of continued employment, Employee will have a vested interest in twenty-five percent (25%) of the value of all business he or she creates and services. In the even of termination or withdrawal of Employee, Employer will purchase Employee's Book of Business as vested on the date of termination in accordance with the price as set forth in Price, Section 20.
19. Purchase of Employee's Book. In the event Employee wishes to leave the employ of Employer, two options are available:
Option #1: Employer may exercise a Right of First Refusal to purchase employee's vested interest in the Book of Business according to the terms set forth in Paragraph 21, or as may be otherwise negotiated by mutual agreement.
Option #2: If Employee wishes to leave the employment of Employer and either start his own agency or join another agency, Employee has the right to purchase the Agency's interest in Employee's Book of Business. Terms are set forth in Paragraph 21. The purchase price will be in accordance with the valuation as established under Section 20, Price. Payment will be in accordance with Section 21, Payment.
20. Price. The price to be paid by the purchaser for the Book of Business shall be determined according to the following formula: The Controller of_________ Agency shall make a determination from the books and records of the Company as to gross commissions generated by Employee on Property and Casualty insurance sales and renewals during the twelve (12) full calendar months immediately preceding the giving of notice of intent to sell or purchase.
After calculation of such gross commissions, the resulting figure shall be multiplied by 1.0 to arrive at the total value of the Book of Business. No consideration shall be given to commissions earned on Life or Health insurance sales.
21. Payment. The purchase price for the Book of Business shall be paid as follows:
The purchase price arrived at as above described shall be paid in sixth (60) consecutive equal monthly installments commencing one month after the date of the purchase price is finally determined. In addition, the Purchaser shall pay interest equal to six (6) percent (%) per annum of the unpaid balance from time to time due with each monthly installment. In the event of default in payment of monthly installments by the Purchaser and the failure to cure such default within ninety (90) days, the entire balance of the purchase price then remaining unpaid shall become due and payable forthwith upon ten (10) days' advanced written notice given by the Payee of his or her intention to accelerate the unpaid balance.
The Purchaser shall execute and deliver to the Payee a Promissory Note substantially identical to the prototype shown as Exhibit B of this Agreement, and by reference made a part hereof.
The payment of the purchase price is to be tied to the Covenant Not to Compete, which is contained in Section 22 of this Agreement.
22. Covenant Not to Compete. The withdrawing Employee, if permitted to compete directly or indirectly with the Purchaser of his or her interest, would thereby destroy a substantial portion of the value of the insurance business which the parties recognize is the subject of this document. In recognition thereof, the parties agree that should the withdrawing Employee compete directly or indirectly, as prohibited under the terms of this Agreement, the Purchaser shall have the right to suspend all future installment payments provided for in the Promissory Note above mentioned. The Pledge shall be thereafter null and void, and the balance of the purchase price shall be forgiven. The events which shall give rise to the right of the Purchaser to terminate such payments are as follows:
(i) The withdrawing Employee's solicitation or acceptance of any form of insurance business of any customer who was a customer on the date of Employee's termination or at any time in the two (2) years prior to his or her termination, of either Employer or any agency through which Employer places the insurance business sold by Employee. If Employee exercises the right to purchase his Book of Business, those customers are not part of this provision.
(ii) Subject to the further provisions hereof, this prohibition shall continue for a period of three (5) years after the closing, which shall be conclusively presumed to be the date affixed to the above-mentioned Promissory Note. (iii) The Agreement by the parties to restrain from the solicitation of the clients shall be restricted to all of those Counties in the [State] west of [ XXX County ], but [XXX County].
23. Restrictive Covenant. Employee agrees that he or she will never, during the period of this Agreement or thereafter, reveal to any person any expiration date, premium due date, premium amount, coverage amount, or other similar fact regarding any customer of Employer or any agency through which Employer places the insurance business sold by Employee, and the parties agree that such information is a business secret learned by Employee in the course of his or her employment, and represents a relationship of trust and confidence and subject to the restrictions hereby imposed. Employee will use his or her best efforts to keep such information secret at all times.
24. Notices. Any notices required or permitted under this Agreement shall be given by certified mail, return receipt requested at the address of the parties hereafter set forth. Such addresses may be changed by written notice given by either party to the other from time to time. Notice shall be deemed delivered forty-eight (48) hours after deposit in any United States Post Office in the State of _____________ , postage prepaid.
EMPLOYER:___________________________________________________
EMPLOYEE:___________________________________________________
25. Titles of Paragraphs. The various titles of the paragraphs herein are used solely for convenience and shall not be used for construing or interpreting any word, clause, paragraph, or subparagraph of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement this_______day of _____ , 19___ , at _______________, ______________.
EMPLOYER: EMPLOYEE:
________________________ _____________________________
________________________ _____________________________
Date
WITNESS:
________________________ _____________________________
Date
EXHIBIT 'B' PART OF