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EXHIBIT 10D
SBM COMPANY
FORM 10-K
DECEMBER 31, 1994
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EMPLOYMENT AGREEMENT
AGREEMENT, Dated as of November 22, 1994, between SBM Company and State
Bond and Mortgage Life Insurance Company, and their successors, (together, the
"Company"), and Edward L. Zeman("Zeman").
1. This Agreement is authorized by resolutions of the Board of Directors
of the Company dated August 9, 1994 and November 22, 1994 . However,
although otherwise binding on the Company, its effectiveness is subject
to completion of any required filings with and approvals by the
Minnesota Department of Commerce or, if appropriate, the lapsing or
revocation of such requirements ("Approval"). This agreement supercedes
any previous employment understandings or agreements between the
Company and Zeman.
2. Initial term of Agreement is through December 31, 1996 and it shall
renew automatically for one year terms thereafter unless terminated by
either party on 30 days written notice at end of any term. The
Agreement, however, except as otherwise provided herein, may be
terminated with or without cause by Company or Zeman at any time upon
30 days written notice.
In the event the Agreement is assumed by ARM or another corporation, as
soon as is reasonably practicable, but in any event by December 31,
1995, such party either shall terminate this Agreement or shall notify
Zeman of its intentions with respect to the continuation of his
employment and, if long-term employment is offered, where such
employment will be located and what its terms will be.
Upon termination by Zeman, compensation and unearned benefits shall
cease at the effective date of termination. Upon termination by
Company, Zeman shall be entitled to compensation and benefits to the
effective date of termination and the termination fee provided in
paragraph 4. No right shall accrue to any bonus under paragraph 3
before they are awarded, which bonuses shall be payable only upon
continuance of employment until the payment date; provided, however,
that the Company shall not terminate this Agreement in an arbitrary
manner, or in bad faith in order to avoid paying either such bonus.
3. Zeman shall not receive a year end 1994 discretionary bonus but,
subject to continuance of his employment through the bonus vesting date
and the effectiveness of this Agreement shall be eligible for (i) a
special bonus upon execution of a definitive agreement to refinance
and/or sell the Company or its substantial assets, or a controlling
interest in it ("Agreement Bonus") and for (ii) a special bonus
("Closing Bonus") payable upon the closing of the transaction
contemplated by such definitive agreement, or another such transaction
("Transaction").
a. The Agreement Bonus shall be in an amount determined and awarded by
the Chief Executive Officer, in his sole discretion, and shall be in an
amount not greater than 40% of annualized 1995 base compensation. The
Chief Executive Officer in determining the amount of such bonus shall
consider such matters as:
i. cooperation/team play/helpfulness/assistance with employee
morale; ii. contribution to the agreement process and the
Agreement execution; iii. effectiveness in various
responsibilities, including coordination and utilization of
outside consultants, year end, preliminary and final closing
accounting, reporting matters and financial statements, and
dealing with regulatory and rating agencies; iv. effort and
loyalty.
The Agreement Bonus shall be payable at the later of execution of such
definitive agreement and Approval of this Agreement , subject to any
limitations in such Approval and in any event no later than closing.
b. The Closing Bonus bonus shall be in an amount determined and
awarded by the Chief Executive Officer, in his discretion and shall be
in an amount not greater than 75% of annualized 1995 base
compensation. The Chief Executive Officer in determining the amount of
such bonus shall consider such matters as:
i. cooperation/team play/helpfulness/assistance with employee
morale;
ii. contribution to the agreement process and the Agreement
execution;
iii. effectiveness in various responsibilities, including coordination
and utilization of outside consultants, year end, preliminary and
final closing accounting, reporting matters and financial
statements, and dealing with regulatory and rating agencies;
iv. effort and loyalty.
v. anticipated per share distributable cash or implied value to
common shareholders resulting from such Transaction.
The Closing Bonus shall be payable at the later of the final closing
of the Transaction and Approval of this Agreement.
4. Termination fee upon termination of employment by Company other than
for cause, including constructive termination of employment, in an
amount equal to the greater of any severance otherwise payable under
normal Company severance policies or arrangements and:
a. 12 months base if by reason of a constructive termination of
employment by Company, which shall include a material change in
position duties;
b. 12 months base if in anticipation of or within 8 months following
a transaction to which Company is a party which results in a
change of control of the Company to any person not now a 20%
voting shareholder; provided that payment obligations shall abate
at the later of (i) 8 months base plus two additional weeks for
each year of service after termination of employment and (ii)
such time as employee accepts other full time employment; c. 6
months base plus two additional weeks for each year of service if
termination is under any other circumstances.
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5. This Agreement shall be binding upon the successors and assigns of
Company which, except as specifically provided herein, shall be
released from all further liability hereunder in the event a party
acquiring control of SBM or its substantial assets assumes Company's
liabilities hereunder. Zeman shall give to SBM Company and State Bond
and Mortgage Life Insurance Company a release from all further
liability under this Agreement upon any such assumption by ARM or
another corporation and upon payment of all amounts due hereunder
through the date of such assumption including under paragraphs 3 a. and
3 b.
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/s/Edward L. Zeman
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SBM Company
State Bond and Mortgage Life Insurance Company
By their CEO, /s/Charles A. Geer
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