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EXHIBIT 10E
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 Stewart D. Gregg ("Gregg").
1. This Agreement is authorized by resolution 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 all previous employment understandings or agreements between the
Company and Gregg.
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 Gregg at any time upon
30 days written notice.
In the event the Agreement is assumed by ARM or another corporation,
within three months of the last day of the month in which the
assumption occurs such party either shall terminate this Agreement or
shall notify Gregg 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 Gregg, compensation and unearned benefits shall
cease at the effective date of termination. Upon termination by
Company, Gregg 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 earned, 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. Gregg 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 by the Chief
Executive Officer, in his sole discretion, and shall be based upon an
amount not greater than 20% of annualized 1995 base compensation. The
Chief Executive Officer in determining the amount of such bonus shall
consider such matters as:
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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 and
dealing with regulatory and rating agencies;
iv. effort and loyalty.
The Agreement Bonus shall be payable at the later of execution of the
definitive agreement and Approval of this Agreement, subject to any
limitations in such Approval. b. The Closing Bonus bonus shall be in
an amount determined by the Chief Executive Officer, in his
discretion. 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 closing process and closing of the
Transaction;
iii. effectiveness in various responsibilities, including
coordination and utilization of outside consultants 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, including
constructive termination of employment which shall include a material
change in position duties, other than for cause in an amount equal to
the greater of any severance otherwise payable and:
a. 9 months base if by reason of a constructive termination of
employment by Company;
b. 9 months base if in anticipation of or within eight months
following a transaction to which Company is a party which results
in a change of control of Company to any person not now a 20%
voting shareholder; provided that payment obligations shall abate
at the later of (i) 5 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. 5 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. Gregg 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/Stewart D. Gregg
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SBM Company
State Bond and Mortgage Life Insurance Company
By their CEO, /s/Charles A. Geer