EMPLOYMENT AGREEMENT
THIS AGREEMENT ["Agreement"] is made and entered into
this 3rd day of October, 1994, by and between AMVESTORS
FINANCIAL CORPORATION [hereinafter referred to as "AmVestors"],
AMERICAN INVESTORS LIFE INSURANCE COMPANY, INC. [hereinafter
referred to as "American"], AMVESTORS INVESTMENT GROUP, INC. and
AMERICAN INVESTORS SALES GROUP, INC., all Kansas corporations [the
latter three hereinafter collective referred to as "Affiliates"],
parties of the first part [hereinafter referred to as
"Companies"], and RALPH W. LASTER JR. [hereinafter referred to as
"Mr. Laster"], an individual, party of the second part.
WITNESSETH:
WHEREAS, Mr. Laster has been employed for many years by
AmVestors and its affiliates and has been employed since 1988 as
Chief Executive Officer and Chairman of the Board of AmVestors;
and
WHEREAS, Mr. Laster has also been employed by,
associated with or has acted as a consultant to, and may in the
future, at the request of AmVestors, be employed by, associated
with or act as a consultant to, the affiliates of AmVestors; and
WHEREAS, AmVestors desires to continue to have the
benefit of Mr. Laster's knowledge and experience and considers
such a vital element in protecting and enhancing the best
interests of AmVestors and its shareholders and in providing
management for AmVestors.
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NOW, THEREFORE, in consideration of the mutual
agreements and conditions contained herein, the parties hereto
agree as follows:
1. Full-time Employment of Executive.
a. Duties and Status.
(1) AmVestors hereby employs Mr. Laster as
its Chairman of the Board of Directors and Chief Executive Officer
and American hereby employs Mr. Laster as its President and Chief
Executive Officer to provide certain services set forth herein and
to provide certain other employment services to affiliates for the
employment period as defined in paragraph 3(a), and Mr. Laster
accepts such employment, on the terms and conditions set forth in
this Agreement. During the employment period, Mr. Laster shall
perform such managerial duties and responsibilities for AmVestors
and affiliates as may be assigned to him in accordance with the
bylaws, which duties and responsibilities shall be substantially
the same character as or equivalent character to those required by
his assigned offices and functions during 1994.
(2) During the employment period, Mr. Laster
shall devote his full time and efforts to the business of
AmVestors and its affiliates and shall not engage in consulting
work or any trade or business for his own account or for or on
behalf of any other person, firm or corporation which competes,
conflicts or interferes with the performance of his duties
hereunder in any way. Mr. Laster shall be entitled to reasonable
vacations and to such personal and sick leave as may be
established by AmVestors' and affiliates corporate policies. Mr.
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Laster shall perform his duties while employed in good faith and
shall observe faithfully the covenants and agreements made by him
herein.
b. Compensation and General Benefits.
(1) During the employment period, AmVestors
shall pay Mr. Laster an annual base salary of not less than Three
Hundred Seventy Thousand Dollars ($370,000.00), payable in twice
monthly installments (or on such other basis as may be mutually
agreed upon). The salary shall be reviewed annually by the
respective Board of Directors and may be increased, but not
diminished, during the employment period.
(2) In addition to the salary provided by
subparagraph (1) of this paragraph 1(b), AmVestors and affiliates
shall provide benefits and other perquisites reasonably comparable
to, and no less favorable than, those provided by AmVestors and
its affiliates to Mr. Laster during 1993, including, but not
limited to, an automobile suitable for the business and personal
use of Mr. Laster.
2. Competition; Confidential Information.
The parties recognize that, due to the nature of Mr.
Laster's prior association with the Companies and of his
engagement hereunder, and as a consequence of his relationship to
Companies, both in the past and in the future hereunder, Mr.
Laster has had access to and has acquired, and has assisted in and
may assist in developing, confidential and proprietary information
relating to the business and operations of the Companies. Mr.
Laster recognizes that such information has been and will continue
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to be of central importance to the business of the Companies and
that disclosure of such information to others or its use by others
could cause substantial irreparable loss to the Companies. Mr.
Laster and Companies also recognize that an important part of Mr.
Laster's duties will be to develop good will for the Companies
through his personal contact with others having business
relationships with Companies and within the insurance industry,
and that there is a danger that this good will, a proprietary
asset of the Companies, may follow him if and when his
relationship with the Companies is terminated. Mr. Laster
accordingly agrees as follows:
a. Non-Competition. During the employment period
he will not directly or indirectly, either individually or as
owner, partner, agent, employee, consultant or otherwise, except
for the account of and on behalf of Companies, engage in any
activity competitive with the business of Companies, nor will he
be in competition with Companies, solicit or otherwise attempt to
establish any business relationships with any person, firm or
corporation which was, at any time during the employment period, a
customer or supplier of Companies. However, nothing in this
Section 2 shall be construed to prevent him from owning, as an
investment, up to one percent (1%) of a class of equity securities
issued by any competitor of Companies.
b. Confidential Information. Mr. Laster will not
disclose any confidential information of Companies which is now
known to him or which hereafter may become known to him as a
result of his employment or association with Companies and shall
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not at any time directly or indirectly disclose any such
information to any person, firm or corporation, or use the same in
any way other than in connection with the business of Companies
and at all times after the expiration of the employment period.
c. Companies' Remedies for Breach. It is
recognized that damages in the event of breach of this Section 2
by Mr. Laster would be difficult, if not impossible, to ascertain
and it is, therefore, agreed that Companies, in addition to and
without limiting any other remedy or right it may have, shall have
the right to an injunction or other equitable relief in any court
of competent jurisdiction, enjoining any such breach, and Mr.
Laster hereby waives any and all defenses he may have on the
ground of lack of jurisdiction or competence of the court to grant
such an injunction or other equitable relief. The existence of
this right shall not preclude Companies from pursuing any other
rights and remedies at law or in equity which Companies may have.
3. Employment Period.
a. Duration. The employment period shall
commence on June 1, 1994 and shall continue until the close of
business on May 31, 1997, unless otherwise terminated as provided
in this Agreement.
b. Performance and Termination. Subject to the
performance of the covenants and agreements made by Companies
herein, Mr. Laster shall perform his duties during the employment
period in good faith and will observe faithfully the covenants and
agreements made by him herein. Mr. Laster shall not be discharged
during the employment period except for cause involving
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dishonesty, moral turpitude, or material breach of any express or
implied condition under this Agreement. The discharge of Mr.
Laster for reasons other than those specified in the preceding
sentence shall be deemed to be a discharge without cause.
c. Mr. Laster's Remedies for Breach. If the
Companies shall fail to observe or perform any covenant in this
Agreement to be observed or performed by it or if the Companies
shall take any action with respect to Mr. Laster's employment as
set forth in paragraph 3(d) thereby entitling him to terminate his
employment for good reason, then Mr. Laster shall be entitled to
be paid a sum equal to the remaining balance of his salary at the
current salary level for the remaining term of this Agreement
without discount or adjustment within thirty (30) days of written
notice of termination. The parties agree that, because there can
be no exact measure of the damage which would occur to Mr. Laster
as a result of a breach by any of the Companies, the payments
provided hereunder shall be deemed to constitute liquidated
damages and not a penalty for breach by Companies and Companies
agree that Mr. Laster shall not be required to mitigate his
damages. This paragraph shall constitute Mr. Laster's sole remedy
for breach of this Agreement.
In addition to the foregoing, if the Companies
shall fail to observe or perform any covenant or if any of the
Companies shall have taken any action with respect to Mr. Laster's
employment as set forth in paragraph 3(d) thereby entitling him to
terminate his employment for good reason or if there is a change
in control as set forth in paragraph 3(e) thereby entitling Mr.
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Laster to terminate his employment, and Mr. Laster exercises such
right to terminate his employment pursuant to paragraph 3(d) or
3(e), then any and all non-competition agreements by Mr. Laster
pursuant to paragraph 2(a) above shall terminate on the date that
Mr. Laster terminates his employment pursuant to paragraph 3(d) or
3(e).
d. Termination for Good Reason. Mr. Laster shall
be entitled to terminate his employment for good reason. Any
termination of employment under the following circumstances shall
be for good reason and shall be deemed to be a breach of this
Agreement by the Companies:
(1) Without the express written consent of
Mr. Laster, he is assigned any duties inconsistent with his
positions, duties, responsibilities and status with the Companies
since May 1993, or his reporting responsibilities, titles or
offices as in effect during the period of this Agreement are
changed or he is removed from or not reelected to any of such
positions, except in connection with the termination of his
employment for cause, or as a result of his substantial disability
or death;
(2) The annual base salary of Mr. Laster as
in effect on May 31, 1994 ($370,000), as the same hereafter may be
increased from time to time, is reduced;
(3) Companies' principal executive offices
are moved to a location outside Topeka, Kansas or any of the
Companies require Mr. Laster without his agreement to be based
anywhere other than the principle executive offices except for
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required travel on Companies' business to an extent substantially
consistent with his business travel obligations in effect
immediately prior to the date of this Agreement; or
(4) Mr. Laster voluntarily resigns after his
reasonable determination that, as a result of a "change in
control" [as hereinafter defined in paragraph 3(e)] of Amvestors,
he may be unable to exercise the authorities, powers, functions or
duties attached to his position to the extent contemplated by
Section 1 of this Agreement, in which event any and all non-
competition agreements by Mr. Laster pursuant to paragraph 2(a)
above shall terminate on the date of such resignation by Mr.
Laster.
e. Change in Control. Notwithstanding Mr.
Laster's right to terminate for good reason in paragraph 3(d), Mr.
Laster shall also be entitled to terminate his employment
following any "change in control" (as hereafter defined below) of
Amvestors for any reason by providing notice in writing to
Amvestors of his intent to terminate his employment effective as
of a date not earlier than ninety (90) days after receipt of such
written notification by AmVestors.
The term "change in control" as used herein shall
mean a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act") as in effect on the date of this Agreement or, if
Item 5(f) is no longer in effect, any regulations issued by the
Securities and Exchange Commission pursuant to the Exchange Act
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which serve similar purposes; provided that, without limitation,
such a "change in control" shall be deemed to have occurred if and
when (A) any "person" (as such term is used in Sections 3(a)(9),
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
beneficial owner, directly or indirectly, of securities of
AmVestors representing 25 percent (25%) or more of the combined
voting power of the then outstanding securities of AmVestors or
American, (B) a tender offer or exchange offer is made whereby the
effect of such offer is to take over and control AmVestors or
American and such offer is consummated for the ownership of
securities of AmVestors or American representing 25 percent (25%)
or more of the combined voting power of the then outstanding
voting securities of AmVestors or American, (C) AmVestors or
American is merged or consolidated with another corporation or as
a result of such merger or consolidation less than 75 percent
(75%) of the then outstanding voting securities of the surviving
or resulting corporation shall then be owned in the aggregate by
the former stockholders of AmVestors or American, other than
affiliates within the meaning of the Exchange Act or any party to
such merger or consolidation, (D) individuals who were members of
the Board of Directors of AmVestors or American immediately prior
to a meeting of the shareholders of AmVestors or American
involving a contest for the election of directors shall not
constitute a majority of such Board of Directors following such
election, or (E) AmVestors transfers substantially all of its
assets to another corporation which is not a wholly owned
subsidiary of AmVestors or American.
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4. Death or Disability.
a. In the event Mr. Laster shall become so
disabled during the term of this Agreement that he is unable to
reasonably perform his duties for a period of one (1) year, either
Mr. Laster or AmVestors and its Affiliates shall have the right to
terminate this Agreement upon written notice given at the end of
such one (1) year period; provided that, at the time of delivery
of such notice, such disability shall be continuing. In the event
of a disagreement between Companies and/or Mr. Laster regarding
the question of whether Mr. Laster is disabled as defined herein,
the question shall be referred to the Companies physician whose
decision will be conclusive and binding. In any such event, Mr.
Laster shall be entitled to receive as a settlement of this
contract, an annual sum equal to the annual base salary specified
in Section 1b.(1) hereof as such may be increased from time to
time which shall be payable semimonthly, for a period of two (2)
years or until the later of the two dates stated in paragraph 3(a)
(including any extension of such later date as is mutually agreed
to by the parties hereto in writing), whichever is shorter. If
Mr. Laster dies during the term of this Agreement, while receiving
payments pursuant to this paragraph 4(a), such payments shall in
no event continue for more than one (1) year after Mr. Laster's
death and there shall be no further obligations on the part of the
Companies.
b. In the event Mr. Laster dies during the term
of this Agreement, but prior to receiving payments pursuant to
paragraph 4(a), the Companies shall pay to the person(s)
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designated by Mr. Laster in writing to the Companies or, if no
such designation is made, to Mr. Laster's estate, an amount equal
to the annual base salary specified in Section 1b.(1) hereof as
such may be increased from time to time which shall be payable
semimonthly for a period of one (1) year following which there
shall be no further obligation on the part of the Companies.
5. Governing Law. This Agreement shall be governed by
the laws of the State of Kansas.
6. Binding Effect. This Agreement shall be binding
upon the parties hereto, their successors, assigns, heirs,
legatees and personal representatives.
7. Assignability. This Agreement shall not be
assignable by the Companies, nor may his duties hereunder be
delegated by Mr. Laster.
8. Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements, proposals and
other communications, oral or written, between the parties hereto
relating to such subject matter.
9. Severability. If any term or provision of this
Agreement or the application thereof to any circumstances shall,
in any jurisdiction and to any extent, be invalid or
unenforceable, such term of provision shall be ineffective as to
such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable
any remaining terms or provisions of this Agreement or the
application of such term or provision to circumstances other than
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those as to which it is invalid or unenforceable. To the extent
permitted by applicable law, the parties hereto hereby waive any
provision of law that renders any term or provision of this
Agreement invalid or unenforceable in any respect.
10. Intent of Agreement. The Companies intend by this
Agreement to provide for the employment of Mr. Laster. While this
Agreement provides for Mr. Laster's employment, this Agreement
shall in no manner ever be deemed or construed as limiting the
power of stockholders to elect Mr. Laster as a director of
Companies or limiting the power of the Companies to elect its
Chairman or officer(s). In like manner, if stockholders or some
future Board of Directors of the Companies shall not reelect Mr.
Laster, such failure to so elect Mr. Laster shall not be deemed or
considered as a condition precedent to the continued obligation of
the Companies to pay Mr. Laster the compensation as provided for
in this Agreement.
11. Recovery of Legal Fees, Costs and Expenses. In the
event that Mr. Laster is terminated by the Companies and Mr.
Laster retains legal counsel or commences legal action, the costs
and expenses, including legal fees shall be paid by the Companies
or their affiliates in the event Mr. Laster prevails in such
action either by verdict or judgment. In the event Mr. Laster
prevails as defined above, the Companies or their affiliate shall
pay the reasonable attorney fees, costs and expenses within thirty
(30) days after the conclusion of the litigation.
IN WITNESS WHEREOF, the parties hereto have signed this
Employment Agreement the day and year first above written.
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PARTY OF THE FIRST PART:
AMVESTORS FINANCIAL CORPORATION
/s/Mark V. Heitz
By:
Mark V. Heitz, its President and
General Counsel
ATTEST:
/s/Lynn F. Hammes
CORPORATE SECRETARY
AMERICAN INVESTORS LIFE INSURANCE
COMPANY, INC.
/s/Mark V. Heitz
By:
Mark V. Heitz, its Chairman of
the Board and General Counsel
ATTEST:
/s/Lynn F. Hammes
CORPORATE SECRETARY
AMVESTORS INVESTMENT GROUP, INC.
AMERICAN INVESTORS SALES GROUP INC.
By: /s/Mark V. Heitz
Mark V. Heitz
COMPENSATION COMMITTEE --
AMVESTORS FINANCIAL CORPORATION and
AMERICAN INVESTORS LIFE INSURANCE
COMPANY, INC.
By: /s/R. Rex Lee
R. Rex Lee, Chairman
PARTY OF THE SECOND PART:
/s/Ralph W. Laster, Jr.
RALPH W. LASTER JR.