C & J FINANCIAL, LLC
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into this 16th
day of July, 2007 (the "Effective Date"), by and between C & J FINANCIAL, LLC,
an Alabama limited liability company (the "Company") and KEVIN O. SMITH (the
"Employee").
WITNESSETH:
WHEREAS, the Company desires to employee Employee, and Employee desires to
become employed by the Company;
NOW THEREFORE, In consideration of Employee's employment by the Company, and the
mutual promises and covenants contained in, and the mutual benefits to be
derived from this Agreement, and to set forth and establish the terms and
conditions upon which Employee shall be employed by the Company, the parties
hereto agree as follows:
1. Employment
The Company hereby employs Employee and Employee hereby accepts such
employment, upon the terms and conditions set forth herein.
2. Terms and Conditions of Employment.
(a) Employee shall be employed in the position of Vice President of
the Company and shall be responsible for production and the
development of new business for the Company, as well as duties
and responsibilities consistent with those he was performing
prior to the purchase of the Company by Security National
Financial Corporation. Employee shall also perform such related
services and duties for the Company as may be assigned or
delegated to him from time to time by the President and the
Executive Vice President of the Company.
(b) Throughout his employment hereunder, Employee shall devote his
full time, energy and skill to perform the duties of his
employment (reasonable vacations in accordance with this
Agreement and reasonable absences due to illness excepted), shall
faithfully and industriously perform such duties, and shall use
his best efforts to follow and implement all management policies
and decisions of the President and the Executive Vice President.
3. Compensation and Benefits.
As the entire consideration for the services to be performed and the
obligations incurred by Employee hereunder, and subject to the terms
and conditions hereof, during the Term of this Agreement as defined
below in Section 5(a), Employee shall be entitled to the following:
(a) Salary. Commencing from the effective date of this Agreement, the
Company shall pay Employee an annual salary ("Annual Salary") of
$96,000. Such Annual Salary, which shall be pro-rated for any
partial employment period, will be payable in weekly installments
or at such other intervals as may be established for the
Company's customary pay schedule. The Annual Salary is subject to
such incremental increases as the President and the Executive
Vice President may determine from time to time in their sole
discretion. The first review of the Annual Salary by the
President and the Executive Vice President shall be as of June
30, 2008; subsequent reviews shall thereafter be made each year
ended June 30 during the Term of this Agreement. The primary
factor in determining increases in the Annual Salary shall
thereafter be the Company's total amount of financings for
funeral homes and mortuaries and the average discount rate of
such financings for the previous year. For the year ended June
30, 2007, the Company provided financings for funeral homes and
mortuaries in the total amount of $27,501,313 at an average
discount rate of approximately 4.4%. Increases in Annual Salary
shall be based upon exceeding this total amount of financings for
the year at the prevailing discount rate. However, in the event
the total amount of the Company's financings for the year ended
June 30, 2008 are less than $27,501,313, the President and the
Executive Vice President may in their sole discretion reduce
Employee's salary; and in the event the total amount of such
financings are less than $24,000,000, the President and the
Executive Vice President may in their sole discretion terminate
Employee.
(b) Bonus - As further compensation to Employee, and as further
consideration for his entering into this Agreement and the
services to be rendered by Employee hereunder, the Company may
pay Employee following the end of the one-year period ended June
30, 2008 and each year thereafter during the term of this
Agreement as defined in Section 5(a) below, a bonus in the form
of cash. The President and the Executive Vice President, in their
sole discretion, shall determine the amount of any bonuses and
the terms and conditions under which Employee shall receive the
bonuses. Such bonus shall be provided to Employee upon the
satisfaction by the Company of the performance objectives that
shall be determined by the President and the Executive Vice
President. Employee shall have the right to prepare and submit a
proposed bonus plan to the President and the Executive Vice
President for their review and consideration. Without limiting
the generality of the foregoing, the performance objectives shall
include an increase in the total amount of the Company's
financings for funeral homes and mortuaries for the year ended
June 30 over the previous year's financings at the prevailing
discount rate. Employee shall also have the right to direct any
portion of the bonus to be paid into a deferred compensation
fund.
(c) Key Man Insurance. The Company shall pay premiums of up to $300
per year for key man insurance on Employee, with Employee being
named as beneficiary of such insurance policy.
(d) Car Allowance. Employee shall be entitled to an automobile
allowance of $1,161.41 per month payable on the first day of each
month. Employee may designate the bank to which such payment
shall be made. The Company also agrees to pay for the insurance
on the automobile.
(e) Vacation, Sick Leave, and Holidays. Employee shall be entitled to
two weeks of vacation, and also sick leave and holidays at full
pay in accordance with the Company's policies established and in
effect from time to time.
(f) Deductions. The Company shall have the right to deduct and
withhold from the compensation due to Employee hereunder,
including Employee's Annual Salary and Compensation Bonus, if
any, such taxes and other amounts as may be customary or required
by law.
4. Business Expenses.
The Company shall promptly reimburse Employee for all reasonable
out-of-pocket business expenses incurred in performing Employee's
duties hereunder, in accordance with the Company's policies with
respect thereto in effect from time to time (including without
limitation policies regarding prior consent for significant
expenditures), provided that Employee promptly furnishes to the
Company adequate records and other documentary evidence required by
all federal and state statutes and regulations issued by the
appropriate taxing authorities for the substantiation of each such
business expense as a deduction on the federal and state income tax
returns of the Company.
5. Term and Termination.
(a) Term. The Term of this Agreement shall commence on the Effective
Date of this Agreement, and subject to earlier termination as
provided below, and except for the provisions of this Agreement
which, by their terms, continue in force beyond the termination
hereof, the Term of this Agreement shall end on the fifth
anniversary of the Effective Date of this Agreement (July 16,
2012).
(b) Termination for Cause. This Agreement, and Employee's employment
hereunder, is immediately terminable for cause upon written
notice from the Company to Employee. As used in this Agreement,
"cause" shall include: (i) habitual neglect of or deliberate or
intentional refusal to perform any of Employee's duties or
obligations under this Agreement or to follow Company policies or
procedures; (ii) fraudulent or criminal activities; (iii) any
grossly negligent or dishonest or unethical activity; (iv) breach
of fiduciary duty, deliberate breach of Company rules resulting
in loss or damage to the Company, or unauthorized disclosure of
Company trade secrets or confidential information; or (v) if
Employee fails to fulfill the performance goals and objectives,
which shall be mutually determined by Employee, the President and
the Executive Vice President.
(c) Effect of Termination. In the event Employee's employment is
terminated hereunder, all obligations of the Company and all
obligations of Employee except for Section 6 of this Agreement
shall cease, except as otherwise provided herein. Upon such
termination, Employee shall be entitled to receive only the
compensation, benefits, and reimbursement earned or accrued by
Employee under the terms of this Agreement prior to the date of
termination computed pro rata up to and including the date of
termination, but shall not be entitled to any further
compensation, benefits, or reimbursement from such date, unless
otherwise mutually agreed in writing by the parties.
6. Confidential Information Agreement.
Employee agrees that Employee will keep confidential and will not,
during or after this Agreement, disclose, divulge, furnish or make
accessible to any person, firm, corporation or other business entity,
any information, trade secrets, customer information, marketing
information, sales information, cost information, technical data,
know-how, secret processes, discoveries, methods, patentable or
unpatentable ideas, formulae, processing techniques or technical
operations relating to the business, business practices, methods,
products, processes, equipment or any confidential or secret aspect of
the business of the Company (collectively, the "Confidential
Information") without the prior written consent of the Company. Upon
the termination of this Agreement for any reason, and at any time
prior thereto upon request by the Company, Employee shall return to
the Company all written records of any Confidential Information,
together with any and all copies of such records, in Employee's
possession. Any Confidential Information which Employee may conceive
of or make during the Term of this Agreement shall be and remain the
property of the Company. Employee agrees promptly to communicate and
disclose all such Confidential Information to the Company and to
execute and deliver to the Company any instruments deemed necessary by
the Company to effect disclosure and assignment thereof to it.
7. Assignment.
This Agreement is for the unique personal services of Employee and is
not assignable or delegable in whole or in part by Employee without
the consent of the President and the Executive Vice President of the
Company. This Agreement may be assigned or delegated in whole or in
part by the Company and, in such case, the terms of this Agreement
shall inure to the benefit of, be assumed by, and be binding upon the
entity to which this Agreement is assigned.
8. Inventions
(a) Disclosure of Inventions. Employee hereby agrees that if he
conceives, learns, makes, or first reduces to practice, either
alone or jointly with others, any inventions, improvements,
original works of authorship, formulas, processes, computer
programs, techniques, know-how, or data relating to the operation
of a factoring business for providing financing for funeral homes
and mortuaries (hereinafter referred to collectively as
"Inventions") while he is employed by the Company, he will
promptly disclose such Inventions to the Company or to any person
designated by it. Notwithstanding the fact that Employee may
determine that the Company has no right to such Invention, he
shall nevertheless promptly disclose any such Invention to the
Company or to any person designated by it upon reasonable
request.
(b) Ownership, Assignment, Assistance, and Power of Attorney. All
Inventions related to the operation of a factoring business for
providing financing for funeral homes and mortuaries shall be the
sole and exclusive property of the Company, and the Company shall
have the right to use and to apply for patents, copyrights, or
other statutory or common law protection for such Inventions in
any country. Employee hereby assigns to the Company any rights
which he may acquire in such Inventions. Furthermore, Employee
agrees to assist the Company in every proper way at the Company's
expense to obtain patents, copyrights, and other statutory common
law protections for such Inventions in any country and to enforce
such rights from time to time. Specifically, Employee agrees to
execute all documents as the Company may desire for use in
applying for and in obtaining or enforcing such patents,
copyrights, and other statutory or common law protections
together with any assignments thereof to the Company or to any
person designated by the Company. In the event the Company is
unable for any reason whatsoever to secure Employee's signature
to any lawful document required to apply for or to enforce any
patent, copyright, or other statutory or common law protections
for such Inventions, Employee hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents
as his agents and attorneys-in-fact to act in his stead to
execute such documents and to do such other lawful and necessary
acts to further the issuance and protection of such patents,
copyrights, or other statutory or common law protection, such
documents or such acts to have the same legal force and effect as
if such documents were executed by or such acts were done by
Employee.
9. Waiver or Modification.
Any waiver, modification or amendment of any provision of this
Agreement shall be effective only if in writing in a document that
specifically refers to this Agreement and such document is signed by
the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought. The waiver by either
party of a breach of any provision of this Agreement by the other
party shall not operate or be construed as a waiver of any other
provision hereof or any subsequent breach of the same provision
hereof.
10. Severability.
If any provision of this Agreement is found to be unenforceable by a
court of competent jurisdiction, the remaining provisions shall
nevertheless remain in full force and effect.
11. Notices.
Any notice required or permitted hereunder to be given by either party
shall be in writing and shall be delivered personally or sent by
certified or registered mail, postage prepaid, or by private courier,
or by telex or telegram to the party to the address set forth below or
to such other address as either party may designate from time to time
according to the terms of this paragraph:
To Employee at: Kevin O. Smith
45 Arrow Wood Lane
Gadsden, Alabama 35901
To the Company at: C & J Financial, LLC
c/o Security National Financial Corporation
5300 South 360 West, Suite 250
Salt Lake City, Utah 84123
Attn: Scott M. Quist, President
and Manager
With a copy to: Mackey Price Thompson & Ostler
57 West 200 South, Suite 350
Salt Lake City, Utah 84101
Attn: Randall A. Mackey, Esq.
A notice delivered personally shall be effective upon receipt. A
notice sent by facsimile or telegram shall be effective 24 hours after
the dispatch thereof. A notice delivered by mail or by private courier
shall be effective on the 3rd day after the day of mailing.
12. Attorney's Fees.
In the event of any action at law or equity to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees and court costs in addition to any other
relief to which such party may be entitled.
13. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Alabama applicable to contracts entered into
and to be performed entirely within such State.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first set forth above.
EMPLOYEE:
/s/ Kevin O. Smith
Kevin O. Smith
THE COMPANY:
C & J FINANCIAL, LLC
By: /s/ Scott M. Quist
Scott M. Quist, President and Manager