SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1996
Commission File Number 1-8538
WESTBRIDGE CAPITAL CORP.
(Exact name of Registrant as specified in its Charter)
DELAWARE 73-1165000
(State of Incorporation) (I.R.S. Employer Identification No.)
777 Main Street, Fort Worth, Texas 76102
(Address of Principal Executive Offices) (Zip Code)
817-878-3300
(Registrant's Telephone Number, including Area Code)
800-437-8690
(Registrant's Shareholder and Investor Relations Toll Free Telephone Number)
Not Applicable
(Former Name, Address and Former Fiscal Year, if changed since Last Report)
Indicate, by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO_____
Common Stock - Par Value $.10 5,993,458 Shares Outstanding at May 10, 1996
1
<PAGE>
Form 10-Q
Company or group of companies for which report is filed:
WESTBRIDGE CAPITAL CORP.
This quarterly report, filed pursuant to Rule 13a-13 and 15d-13 of the General
Rules and Regulations under the Securities Exchange Act of 1934, consists of the
following information as specified in Form 10-Q:
<TABLE>
<S> <C>
Page(s)
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
1. Consolidated Balance Sheets at March 31, 1996, December 31, 1995
and March 31, 1995. 3-4
2. Consolidated Statements of Operations for the Three Months Ended
March 31, 1996 and 1995. 5
3. Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1996 and 1995. 6
4. Notes to Consolidated Financial Statements. 7
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations 8-12
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 13
Item 6 - Exhibits and Reports on Form 8-K 13
</TABLE>
2
<PAGE>
WESTBRIDGE CAPITAL CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1996 1995 1995
(Unaudited) (Audited) (Unaudited)
---------- --------- -----------
<S> <C> <C> <C>
Investments:
Fixed Maturities:
Available-for-sale, at market value
(amortized cost $80,544, $83,160
and $11,187) $ 81,975 $ 86,780 $ 11,051
Held-to-maturity, at amortized cost
(market value $0, $0, and $77,806) -- -- 80,113
Equity securities, at market 506 539 470
Investment in Freedom Holding Company,
on the equity basis 6,220 6,173 5,915
Mortgage loans on real estate 625 639 749
Investment real estate 141 141 141
Policy loans 278 285 287
Short-term investments 14,721 14,946 6,609
------- ------- -------
Total Investments 104,466 109,503 105,335
Cash 1,534 2,013 1,010
Accrued investment income 1,486 1,711 1,703
Receivables from agents, net of allowance
for doubtful accounts 20,805 16,706 9,239
Deferred policy acquisition costs 63,373 56,977 61,610
Leasehold improvements and equipment, at
cost, net of accumulated depreciation and
amortization 1,534 1,590 1,490
Other assets 13,880 12,499 9,974
------- ------- -------
Total Assets $207,078 $200,999 $190,361
======= ======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
WESTBRIDGE CAPITAL CORP.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31, March 31,
(Unaudited) (Audited) (Unaudited)
1996 1995 1995
--------- ---------- -----------
<S> <C> <C> <C>
Liabilities:
Policy Liabilities and Accruals:
Future policy benefits $ 49,154 $ 46,620 $ 63,200
Claims 38,415 39,063 40,355
------ ------ -------
87,569 85,683 103,555
Accumulated policyholders' funds 380 373 362
Other liabilities 12,849 11,226 7,870
Deferred income taxes 6,412 5,841 2,968
Notes payable 18,044 15,807 -
Senior subordinated notes, net of unamortized
discount, due 2002 19,285 19,264 19,206
------- ------- -------
Total Liabilities 144,539 138,194 133,961
------- ------- -------
Redeemable Preferred Stock 20,000 20,000 20,000
------- ------- -------
Stockholders' Equity:
Common stock, ($.10 par value, 30,000,000
shares authorized; 5,993,458, 5,992,458
and 5,949,758 shares issued) 599 599 595
Capital in excess of par value 29,210 29,208 29,125
Unrealized appreciation of investments carried
at market value, net of tax 1,165 2,593 45
Retained earnings 11,735 10,575 6,805
------ ------ ------
42,709 42,975 36,570
Less - Aggregate of shares held in treasury and
investment by affiliate in Westbridge Capital Corp.
common stock (28,600 at March 31, 1996,
December 31, 1995 and March 31, 1995), at cost (170) (170) (170)
------ ------ ------
Total Stockholders' Equity 42,539 42,805 36,400
------ ------ ------
Total Liabilities, Redeemable Preferred
Stock and Stockholders' Equity $ 207,078 $ 200,999 $ 190,361
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
WESTBRIDGE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
------------------
<S> <C> <C>
Revenues:
Premiums:
First-year $ 14,400 $ 5,959
Renewal 21,010 21,975
------ ------
35,410 27,934
Net investment income 2,116 1,820
Fee and service income 1,775 432
Net realized gains (losses) on investments 85 (61)
Other income 2 6
------ ------
39,388 30,131
------ ------
Benefits, Claims and Expenses:
Benefits and claims 21,914 16,328
Amortization of deferred policy acquisition costs 4,329 2,890
Commissions 1,937 3,099
General and administrative expenses 6,566 5,052
Taxes, licenses and fees 1,343 1,080
Interest expense 951 720
------ ------
37,040 29,169
------ ------
Income before income taxes, equity in earnings of
Freedom Holding Company and extraordinary item 2,348 962
Provision for income taxes 822 327
Equity in earnings of Freedom Holding Company 47 89
------ ------
Income before extraordinary item 1,573 724
Extraordinary loss from early extinguishment of debt - 407
------ ------
Net Income $ 1,573 $ 317
====== ======
Preferred Stock Dividends 413 413
------ ------
Income (loss) applicable to common stockholders $ 1,160 $ (96)
====== ======
Earnings Per Common Share:
Primary:
Income before extraordinary item $ .19 $ .06
Extraordinary item - (.08)
---- ----
Net Earnings (loss) $ .19 $ (.02)
==== ====
Fully Diluted:
Income before extraordinary item $ .19 $ .10
Extraordinary item - (.06)
---- ----
Net Earnings $ .19 $ .04
==== ====
Weighted Average Shares Outstanding:
Primary 6,105,000 5,125,000
Fully diluted 8,483,000 7,444,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
WESTBRIDGE CAPITAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1996 1995
-------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) applicable to common stockholders $ 1,160 $ (96)
Adjustments to reconcile net income to cash provided by
(used for) operating activities:
Increase (decrease) in policy liabilities and accruals 1,886 (725)
Amortization of deferred policy acquisition costs 4,329 2,890
Additions to deferred policy acquisition costs (10,725) (5,846)
Increase (decrease) in deferred income taxes 571 (263)
Depreciation expense 131 111
Increase in receivables from agents (4,099) (1,886)
Increase in other assets (1,381) (377)
Equity in earnings of Freedom Holding Company (47) 30
Increase (decrease) in other liabilities 1,630 (808)
Other, net 863 382
------ ------
Net Cash Used For Operating Activities (5,682) (6,588)
------ ------
Cash Flows From Investing Activities:
Proceeds From Investments Sold:
Fixed maturities, classified as held-to-maturity, called or matured - 248
Fixed maturities, classified as available-for-sale, called or matured 4,588 13
Fixed maturities, classified as available-for-sale, sold 1,033 952
Short-term investments, sold or matured 43,979 2,934
Other investments, sold or matured 72 24
Cost of investments acquired (46,633) (3,207)
Additions to leasehold improvements and equipment, net of retirements (75) (386)
------ ------
Net Cash Provided By Investing Activities 2,964 578
------ ------
Cash Flows From Financing Activities:
Retirement of senior subordinated debentures, at par - (25,000)
Issuance of notes payable 2,237 -
Issuance of subordinated notes - 19,200
Issuance of common stock 2 9,949
------ ------
Net Cash Provided By Financing Activities 2,239 4,149
------ ------
Decrease In Cash During Period (479) (1,861)
Cash At Beginning Of Period 2,013 2,871
------ ------
Cash At End Of Period $ 1,534 $ 1,010
====== ======
Supplemental Disclosures Of Cash Flow Information:
Cash Paid During The Periods For:
Interest $ 896 $ 1,778
Income taxes $ 2 $ 3
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
WESTBRIDGE CAPITAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements for Westbridge
Capital Corp. ("Westbridge" and, together with its consolidated subsidiaries,
the "Company") have been prepared in accordance with the instructions to Form
10-Q and do not include all of the information and footnotes required by
generally accepted accounting principles ("GAAP") for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 1996 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1996. The financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
NOTE 2 - COMMITMENTS AND CONTINGENCIES
In the normal course of their business operations, National Foundation Life
Insurance Company ("NFL"), National Financial Insurance Company ("NFIC"), and
American Insurance Company of Texas ("AICT"), Westbridge's primary insurance
subsidiaries, are involved in various claims and other business related
disputes. In the opinion of management, the disposition of these matters will
have no material adverse effect on the Company's consolidated financial
position.
NOTE 3 - EARNINGS PER SHARE
Primary Income Before Extraordinary Item. Calculated by dividing income before
extraordinary item, less preferred stock dividends, by primary weighted average
shares outstanding. Primary weighted average shares outstanding do not assume
the conversion to Common Stock of the Series A Preferred Stock.
Fully Diluted Income Before Extraordinary Item. Calculated by dividing income
before extraordinary item by fully diluted weighted average shares outstanding.
The preferred stock dividend is not deducted from income for the fully diluted
calculation, but the fully diluted average shares outstanding number is larger.
The fully diluted calculation assumes the conversion of the Series A Preferred
Stock to Common Stock at the beginning of the period. Were such a conversion to
occur, (a) preferred dividends would not be paid, and are therefore not deducted
from earnings for the calculation and, (b) there would be a greater number of
shares of Common Stock outstanding as a result of the conversion.
At March 31, 1996, the Series A Preferred Stock was convertible to Common Stock
at a conversion price of $8.41, which would result in 2,378,120 additional
shares of Common Stock upon conversion.
NOTE 4 - SUBSEQUENT EVENT
On May 2, 1996, the Company agreed to purchase the remaining 60% of Freedom
Holding Company ("FHC") for $6.3 million, bringing total ownership of FHC to
100%. FHC is the parent company of Freedom Life Insurance Company of America
("FLICA"), a Mississippi domiciled insurer. FLICA principally offers Cancer and
Specified Disease Products and is licensed in thirty-four states.
7
<PAGE>
WESTBRIDGE CAPITAL CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW AND COMPARABILITY OF PERIODS
Westbridge Capital Corp. ("Westbridge" and, together with its consolidated
subsidiaries, the "Company") through its subsidiaries and affiliated companies,
principally underwrites and sells specialized health insurance products to
supplement medical expense coverage usually provided by employers and government
programs. The Company's insurance subsidiaries and affiliates include the
following:
* National Foundation Life Insurance Company ("NFL") - A wholly-owned
subsidiary of the Company which is engaged primarily in the sale of
accident and health insurance.
* National Financial Insurance Company ("NFIC") and its wholly-owned
subsidiary, American Insurance Company of Texas ("AICT") - These companies
were acquired by the Company in April, 1994. NFIC and AICT are engaged in
the sale of new policies and the administration of blocks of insurance
business which are substantially similar to the business administered by
NFL.
* Freedom Holding Company ("FHC") - The Company owns a 40% interest in FHC,
which in turn, owns 100% of Freedom Life Insurance Company of America
("FLICA"). FLICA is engaged primarily in the sale of Cancer and Specified
Disease Products. The Company agreed to purchase the remaining 60% of FHC
on May 2, 1996 for $6.3 million in cash. The purchase is subject to
customary terms and conditions, including regulatory approval. The
acquisition will not have a material effect on the Company's revenues or
net earnings.
The Company's major product lines are Cancer and Specified Disease Products,
Medical Expense Products and Medicare Supplement Products. Cancer and Specified
Disease Products include policies designed to provide daily indemnity for
hospital confinement and convalescent care for treatment of specified diseases,
as well as "event specific" policies designed to provide daily indemnity for
confinement in an intensive care unit or to provide a fixed benefit in the case
of accidental death. Medical Expense Products include policies providing
reimbursement for various costs of medical and hospital care, catastrophic
nursing care and home health care. Medicare Supplement Products are designed to
reimburse for the expenses not covered by the Medicare program.
The Company also derives revenue through fee and service income from other
insurance related activities. The Company's marketing subsidiaries include the
following:
* LifeStyles Marketing Group, Inc. ("LMG") - LMG is an insurance marketing
joint venture which derives fee income in the form of commissions on sales
of Medical Expense Products primarily for NFL but also for non-affiliated
insurance carriers. LMG is 51% owned by the Company.
* Senior Benefits, LLC ("SBL") - SBL is an insurance marketing joint venture
which derives fee income in the form of commissions on sales of Medicare
Supplement Products for NFL. SBL was formed in November, 1993. The Company
holds a 50% ownership interest in SBL.
* American Senior Security Plans, LLC ("ASSP") - ASSP is an insurance
marketing joint venture which derives fee income in the form of commissions
on sales of Medicare Supplement Products for NFIC. ASSP was formed in
November, 1994. The Company holds a 100% ownership interest in ASSP.
* Health Care-One Insurance Agency, Inc. ("HCO") - HCO is an insurance
marketing joint venture which derives fee income in the form of commissions
on sales of HMO products and PPO products, for non-affiliated companies.
HCO was formed in September, 1995. The Company holds a 50% ownership
interest in HCO.
8
<PAGE>
The Company has purchased several significant blocks of business over the past
four years. Generally, as a result of the acquisition of policies in force, and
the transfer of assets and liabilities relating thereto, the Company receives
higher revenues in the form of premiums and net investment income, and
experiences higher expenses in the form of benefits and claims, amortization of
DPAC, commissions and general and administrative expenses. The Company expects
that the levels of premiums, net investment income, net realized gains on
investments, benefits and claims, amortization of DPAC, commissions and general
and administrative expenses attributable to these acquired policies will
continue to decline over time as the acquired businesses run off.
The following table shows the premiums received by the Company through internal
sales and through acquisitions during the periods indicated.
Three Months Ended
March 31,
------------------
1996 1995
------------------
Company-Issued Policies:
First-year premiums $14,382 $ 5,922
Renewal premiums 10,165 8,700
------ ------
Total Company-issued policies 24,547 14,622
------ ------
Acquired Policies:
American Integrity 2,226 2,881
Life and Health 478 552
Dixie National Life 774 927
NFIC and AICT 7,385 8,952
------ ------
Total acquired policies 10,863 13,312
------ ------
Total Premiums $35,410 $27,934
====== ======
RESULTS OF OPERATIONS
Three Months Ended March 31, 1996 Compared With Three Months Ended March 31,
1995
PREMIUMS. Premiums increased from $27.9 million to $35.4 million for the first
quarter of 1996, an increase of $7.5 million or 26.9%. The increase was
attributable to first-year and renewal premiums on Company-issued policies
increasing $8.4 million and $1.5 million, respectively, offset by decreases in
premiums from acquired policies of $2.4 million.
The increase in first-year premiums was primarily due to increases of $2.0
million in Medicare Supplement premiums produced by SBL for NFL, $3.2 million in
Medical Expense premiums produced by LMG for NFL and $3.4 million, in Medicare
Supplement and Medical Expense premiums produced by non-affiliated agencies for
NFIC and AICT.
Renewal premiums decreased $1.0 million, or 4.5%, as a result of lower premiums
from acquired policies offsetting higher renewal premiums from Company-issued
policies. Decreases in renewal premium consisted of $655,000 on policies
acquired from American Integrity Insurance Company and $1.6 million on policies
acquired from NFIC and AICT due to policy lapses or cancellations. Offsetting
these decreases, in part, were increases in renewal premiums of $1.0 million in
Medicare Supplement premiums produced by SBL for NFL and $583,000 in Cancer and
Specified Disease premiums reinsured by NFL from FLICA.
NET INVESTMENT INCOME. Net investment income increased $300,000, or 16.7%, from
$1.8 to $2.1 million. The increase was attributable to $400,000 of interest
charged in the first quarter of 1996 on receivables from agents, which was not
present in the prior year period.
FEE AND SERVICE INCOME. Fee and service income increased from $432,000 to $1.8
million, an increase of $1.4 million. The increase was primarily due to
increases of $503,000 for telemarketing service fees to non-affiliated companies
and $839,000 for commission fees earned by HCO from non-affiliated companies.
Sales of telemarketing services to non-affiliated companies began during the
second quarter of 1995. HCO began operations during the fourth quarter of 1995.
9
<PAGE>
BENEFITS AND CLAIMS. Benefits and claims increased $5.6 million, or 34.4%, from
$16.3 million to $21.9 million. The increase can be attributed to increases of
$1.0 million for Cancer and Specified Disease Products directly issued by NFL,
$1.8 million for Medicare Supplement Products marketed by SBL for NFL, $1.5
million for Medical Expense Products marketed by LMG for NFL, and $687,000 for
policies acquired in the purchase of NFIC and AICT and $690,000 from NFIC and
AICT Company-issued policies also consisting principally of Medicare Supplement
and Medical Expense Products.
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS ("DPAC"). Amortization of DPAC
increased from $2.9 million to $4.3 million, an increase of $1.4 million or
48.3%. The increase was attributable to those product lines producing the
largest new sales growth, specifically an increase of $889,000 from Medicare
Supplement Products marketed by SBL, and an increase of $502,000 from Medical
Expense Products marketed by LMG.
COMMISSIONS. Commissions decreased $1.2 million, or 38.7%, from $3.1 million to
$1.9 million. Before elimination of intercompany revenues and expenses in
consolidation, commissions decreased $539,000, or 18.0%, in NFL and $202,000, or
27.0%, in NFIC and AICT while commissions increased $485,000 in HCO, which began
operations in the fourth quarter of 1995, and $1.0 million in LMG. An increase
of $1.5 million in commissions from NFL to LMG was eliminated in consolidation.
Additionally, other increases in commissions between the Company's insurance
subsidiaries and agency subsidiaries, totaling $509,000, were eliminated in
consolidation.
Commission expense decreased in the insurance subsidiaries despite higher
premium revenues. This resulted from a shift in the mix of business to products
having low ultimate commission rates. These low ultimate commission rates
primarily result from the Company's policy of not paying commissions on future
premium rate increases on most lines of business currently produced.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $1.5 million, or 29.4%, from $5.1 million to $6.6 million principally
due to costs associated with expanding marketing operations and servicing a
growing base of policyholders.
TAXES, LICENSES AND FEES. Taxes, licenses and fees increased $300,000, or 27.3%,
from $1.1 million to $1.4 million. The increase was primarily due to the
increase in collected premiums and the associated premium taxes.
INTEREST EXPENSE. Interest expense increased $231,000, or 32.1%, from $720,000
to $951,000, primarily due to $354,000 of interest expense associated with a
revolving line of credit which was not present in the comparable 1995 period.
Offsetting this increase was a $123,000 decrease in interest expense stemming
from the redemption of $25,000,000 par, 11.7% senior subordinated debentures in
the first quarter of 1995, in conjunction with the issuance of $20,000,000
principal 11.0% senior notes, also in the first quarter of 1995.
PROVISION FOR INCOME TAXES. The provision for income taxes increased from
$327,000 to $822,000, an increase of $495,000. The increase resulted from an
increase to pre-tax income of $1.3 million.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
WESTBRIDGE. Westbridge is a holding company which conducts its principal
operations through its insurance subsidiaries. Westbridge's primary assets
consist of the outstanding capital stock of NFL and NFIC, of which it is the
sole stockholder. NFL also owns a 40% interest in FHC. On May 2, 1996, the
Company, through NFL, agreed to purchase the remaining 60% of FHC for $6.3
million in cash, subject to customary terms and conditions, including regulatory
approval. Upon obtaining regulatory approval, the purchase price will be paid by
NFL from cash generated by the sale of short-term investments. AICT is a
wholly-owned subsidiary of NFIC. Westbridge's primary potential sources of funds
are dividends from its insurance subsidiaries, advances due and dividends from
marketing subsidiaries, principal and interest payments on a surplus certificate
issued by NFL to Westbridge, lease payments on fixed assets and tax
contributions under a tax sharing agreement among Westbridge and its
subsidiaries. Westbridge's obligations consist primarily of interest payments on
the Senior Subordinated Notes, dividends on the Series A Preferred Stock,
funding cash flow requirements of marketing
10
<PAGE>
subsidiaries, and taxes. The Senior Subordinated Notes mature in March, 2002 and
the Series A Preferred Stock is subject to mandatory redemption in April, 2004.
Dividend payments from Westbridge's principal insurance subsidiaries, NFL, NFIC
and AICT are regulated by the insurance laws of their domiciliary states. NFL is
domiciled in Delaware. Under the Delaware Insurance Code, an insurer domiciled
in Delaware may not declare or pay a dividend or other distribution from any
source other than "earned surplus" without the state insurance commissioner's
prior approval. NFIC and AICT are domiciled in Texas. An insurer domiciled in
Texas may pay dividends only out of "surplus profits arising from its business."
Moreover, insurers domiciled in either Delaware or Texas may not pay
"extraordinary dividends" without first providing the state insurance
commissioner with 30-days prior notice, during which time such commissioner may
disapprove the payment.
As of December 31, 1995, NFL had negative earned surplus as a result of
historical losses. For the foreseeable future, NFL has agreed to seek the
approval of the Delaware Insurance Commissioner prior to making any dividend
payments. As of December 31, 1995, AICT had the ability to pay to NFIC, without
prior regulatory approval, $835,000 in dividends, none of which has been paid.
As of December 31, 1995, NFIC had the ability to pay Westbridge, without prior
regulatory approval, $994,000 in dividends, none of which has been paid.
Westbridge believes that its near-term cash requirements, including interest
payments on the Senior Subordinated Notes and dividend payments on the Series A
Preferred Stock will be met through operating cash flows, repayments of advances
due and dividends from marketing subsidiaries, and payments relating to the
surplus certificate.
INSURANCE SUBSIDIARIES. The primary sources of cash for the insurance
subsidiaries are premiums, income on investment assets and fee and service
income. Additional cash is periodically provided from the sale of short-term
investment assets and could, if necessary, be provided through the sale of
long-term investment assets. The insurance subsidiaries also receive cash from
the sale of agent receivables to Westbridge Funding Corporation ("WFC"), a
wholly-owned subsidiary of Westbridge, under a Receivables Purchase Agreement.
Discontinuance of such sales to WFC would result in reduced liquidity and
decreases in statutory capital and surplus of the insurance subsidiaries. The
insurance subsidiaries' primary uses for cash are benefits and claims,
commissions, general and administrative expenses and taxes.
CONSOLIDATED. A significant portion of the Company's premiums for the three
months ended March 31, 1996 related to policies obtained through closed blocks
of insurance business including the NFIC and AICT acquisition. Renewal premiums
from these closed blocks of business will decline over time due to policy
run-off resulting from lapses and cancellations. In order to offset such
run-off, the Company must issue new policies through its existing general agency
networks or through new agency networks, or acquire additional policies.
Net cash used for operations aggregated $5.7 million in the three months ended
March 31, 1996, compared to $6.6 million for the first three months of 1995. The
decline in the amount of net cash used for operations is the result of larger
increases to cash inflows, principally from premiums, relative to the increases
in cash outflows, principally from deferred policy acquisition costs and
receivables from agents associated with higher levels of new business production
in 1996 when compared to 1995.
Net cash provided by investing activities for the three months ended March 31,
1996, totaled $3.0 million, compared to net cash provided by investing
activities of $578,000 in the same 1995 period. Investing activities contributed
some funding for operating activities during the first three months of 1996,
while financing activities provided substantially all funding to support
operating activities for the comparable 1995 period.
Net cash provided by financing activities was $2.2 million for the three months
ended March 31, 1996, compared to $4.1 million for the prior year period. During
the first three months of 1996, the Company, through WFC, made a draw of
approximately $2.2 million on its $20 million revolving line of credit which is
secured by receivable balances from insurance agents. Through March 31, 1996,
total outstanding borrowings under the line of credit were approximately $17.1
million. The Company and WFC are subject to certain provisions and covenants
under the line of credit, including requiring bank approval prior to paying any
dividend from WFC to Westbridge. For the comparable 1995 period, a total of
$29.1 million of cash was provided by the issuance of 1,500,000 shares of Common
Stock and $20.0 million principal amount of Senior Subordinated Notes, due
11
<PAGE>
2002. Also in the 1995 first quarter, $25.0 million of cash was disbursed to
retire, prior to maturity, the 11.7% Senior Subordinated Debentures due 1996.
The Company believes that its near-term cash requirements will be met through a
combination of operating, investing, and financing cash flows. The Company
anticipates that its longer-term cash requirements for the operation of the
business will also be met through a combination of operating, investing, and
financing cash flows. The Company has established an agent balance financing
facility which will be used to finance additional marketing growth. Additional
capital may be necessary to consummate future growth through acquisitions. There
can be no assurance that opportunities for future acquisitions will arise or
that additional capital to consummate such acquisitions will be available.
The Company had no significant high-yield, unrated or less than investment grade
corporate debt securities in its investment portfolio as of March 31, 1996, and
it is the Company's policy not to invest more than 5% of its holdings in such
assets. Changes in interest rates may affect the market value of the Company's
investment portfolio. Such changes should not impact the Company's ability to
meet its future policyholder benefit obligations.
12
<PAGE>
PART II
Item 1 - Legal Proceedings
(See Part I - Note 2 to the Consolidated Financial Statements).
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.1 - Employment Contract of Martin E. Kantor Exhibit
10.2 - Employment Contract of James W. Thigpen Exhibit 10.3 -
Employment Contract of Stephen D. Davidson Exhibit 10.4 -
Employment Contract of Margie Megless Exhibit 10.5 - Employment
Contract of Michael Norris Exhibit 10.6 - Employment Contract of
Patrick Mitchell Exhibit 10.7 - Employment Contract of Dennis
Weverka
Exhibit 27 - Financial Data Schedule, (included in electronic
filing only).
(b) Reports on Form 8-K
No Form 8-K was required to be filed during the period.
13
<PAGE>
Form 10-Q
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this quarterly report to be signed on its behalf by
the undersigned, thereunto duly authorized.
WESTBRIDGE CAPITAL CORP.
/s/ Patrick J. Mitchell
-----------------------
Patrick J. Mitchell
Vice President, Chief Financial
Officer and Treasurer
(On Behalf of the Registrant and as
Principal Financial and Accounting Officer)
Dated at Fort Worth, Texas
May 14, 1996
14
<PAGE>
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Agreement (this "Agreement"), dated as of April 1, 1996,
is made by and among Westbridge Capital Corp., a Delaware corporation, having
its principal offices at 777 Main Street, Fort Worth, Texas 76102 (the
"Corporation"), National Foundation Life Insurance Company, a Delaware
corporation, having its principal offices at 777 Main Street, Fort Worth, Texas
76102 ("NFL"), and Mr. Martin E. Kantor (the "Executive"), residing at 28 Shore
Cliff
Place, Great Neck, New York 11023.
Recitals
1. The Corporation and NFL each desire to retain the Executive as a
director of the Corporation and NFL and to employ him as the Chairman of the
Board and the Chief Executive Officer of the Corporation and NFL, and to enter
into an agreement embodying the terms of those relationships.
2. The Executive is willing to serve as a director of the Corporation and
NFL and is willing to serve as the Chairman of the Board and the Chief Executive
Officer of the Corporation and NFL on the terms set forth herein.
Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and other good and valuable consideration, the Corporation,
NFL and the Executive hereby agree as follows.
1. Definitions.
1.1 "Affiliate" means any person or entity controlling, controlled by or
under common control with the Corporation.
1.2 "Annual Compensation" means the Executive's highest Base Salary and
Annual Bonus during the Term of Employment.
1.3 "Board" means the Board of Directors of the Corporation.
1.4 "Cause" means (a) the Executive is convicted of a felony involving
actual dishonesty as against the Corporation or NFL, or (b) the Executive, in
carrying out his duties and responsibilities under this Agreement, voluntarily
engages in conduct which is demonstrably and materially injurious to the
Corporation or NFL, monetarily or otherwise, unless such act, or failure to act,
was believed by the Executive in good faith to be in the best interests of the
Corporation or NFL.
<PAGE>
1.5 "Date of Termination" means (a) in the case of a termination for which
a Notice of Termination is required, the date of actual receipt of such Notice
of Termination or, if later, the date specified therein (in no event, however,
shall such date be later than sixty days after the date of actual receipt of
such notice), as the case may be, and (b) in all other cases, the actual date on
which the Executive's employment terminates during the Term of Employment.
1.6 "Disability" means the Executive's inability to render, for a period of
six consecutive months, services hereunder by reason of permanent disability, as
determined by the written medical opinion of an independent medical physician
mutually acceptable to the Executive and the Corporation. If the Executive and
the Corporation cannot agree as to such an independent medical physician, each
shall appoint one medical physician and those two physicians shall appoint a
third physician who shall make such determination.
1.7 "Good Reason" means and shall be deemed to exist if, without the prior
express written consent of the Executive, (a) the Executive is assigned any
duties or responsibilities inconsistent in any material respect with the scope
of the duties or responsibilities associated with the Executive's titles or
positions, as set forth and described in Section 4 of this Agreement; (b) the
Executive suffers a reduction in the duties, responsibilities or effective
authority associated with his titles and positions, as set forth and described
in Section 4 of this Agreement; (c) the Executive is not appointed to, or is
removed from, the offices or positions provided for in Section 4 of this
Agreement; (d) the Executive's compensation is decreased by the Corporation or
NFL, or the Executive's benefits under employee benefit or health or welfare
plans or programs of the Corporation or NFL are in the aggregate materially
decreased (unless such decrease is attributable to or part of a plan or program
implementing a general reduction in such benefits for substantially all of the
Corporation's and NFL's senior executives, or unless there is substituted
reasonably comparable benefits); (e) the Corporation and NFL fail to obtain the
full assumption of this Agreement by a successor entity in accordance with
Section 11.2 of this Agreement; (f) the Corporation and NFL fail to use their
reasonable best efforts to maintain, or cause to be maintained, adequate
directors and officers liability insurance coverage for the Executive; (g) the
Corporation or NFL purport to terminate the Executive's employment for Cause and
such purported termination of employment is not effected in accordance with the
requirements of this Agreement; or (h) there occurs a Change in Control.
1.8 "Term of Employment" has the meaning ascribed to it in Section 3.
1.9 "Change in Control" means (a) the acquisition, after the date of this
Agreement, by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A) the outstanding
shares of common stock, par value $.10 per share, of the Corporation (the
"Common Stock"), or (B) the combined voting power of the voting securities of
the Corporation entitled to vote generally in the election of directors (the
"Voting Securities"); provided, however, that the following acquisitions shall
not constitute a
Change in Control: (x) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or NFL, or (y) any acquisition
by any corporation if, immediately following such acquisition, more than 80% of
the then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
(entitled to vote generally in the election of directors) is beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who, immediately prior to such acquisition, were the beneficial owners
of the Common Stock and the Voting Securities in substantially the same
proportions, respectively, as their ownership, immediately prior to such
acquisition, of the Common Stock and Voting Securities; or (b) individuals who,
on the date of this Agreement, constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date of this
Agreement whose election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of the directors
then serving and comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents; or (c) approval
by the shareholders of the Corporation of a reorganization, merger or
consolidation, other than a reorganization, merger or consolidation with respect
to which all or substantially all of the individuals and entities who were the
beneficial owners, immediately prior to such reorganization, merger or
consolidation, of the Common Stock and Voting Securities beneficially own,
directly or indirectly, immediately after such reorganization, merger or
consolidation, more than 80% of the then outstanding common stock and voting
securities (entitled to vote generally in the election of directors) of the
corporation resulting from such reorganization, merger or consolidation in
substantially the same proportions as their respective ownership, immediately
prior to such reorganization, merger or consolidation, of the Common Stock and
the Voting Securities; or (d) approval by the shareholders of the Corporation of
(i) a complete liquidation or dissolution of the Corporation, or (ii) the sale
or other disposition of all or substantially all of the assets of the
Corporation or NFL, other than to a direct or indirect wholly-owned subsidiary
of the Corporation. For purposes of this Agreement and without limiting the
generality of the preceding sentence, the sale or other disposition by the
Corporation of more than 50% of the common stock or the voting securities
(entitled to vote generally in the election of directors) of NFL shall be deemed
to constitute a sale or other disposition of substantially all the assets of the
Corporation.
2. Employment. Subject to the terms and provisions set forth in this
Agreement, the Corporation hereby agrees to use its best efforts to cause the
Executive to be a director of the Corporation, and shall appoint or elect the
Executive as a director of NFL, during the Term of Employment and each of the
Corporation and NFL agrees during the Term of Employment to employ the Executive
as the Chairman of the Board and Chief Executive Officer of each of the
Corporation and NFL, and the Executive hereby accepts such employment and
directorships.
3. Term of Employment. The term of employment under this Agreement shall
commence on April 1, 1996 (the "Commencement Date") and, unless earlier
terminated under Section 6 below or extended pursuant to the next sentence,
shall terminate on the fifth anniversary of the Commencement Date (the "Term of
Employment"). On such fifth and each succeeding anniversary, the Term of
Employment shall automatically be extended for an additional one year period
unless, not later than six months prior to any such anniversary, either party to
this Agreement shall have given notice to the other that the Term of Employment
shall not be extended or further extended beyond its then automatically extended
term, if any.
4. Positions, Responsibilities and Duties.
4.1 Positions. During the Term of Employment, the Executive shall be
employed and serve as the Chairman of the Board and Chief Executive Officer of
each of the Corporation and NFL and, if elected by the Corporation's
shareholders, he shall be a director of the Corporation. The Executive, during
the Term, shall also be appointed or elected as, and during such time shall be,
a director of NFL. In such positions, the Executive shall have the duties,
responsibilities and authority normally associated with the office and position
of director (if and when elected in the case of the Corporation), chairman of
the board and chief executive officer of a publicly-traded corporation. The
Executive shall report solely and directly to the Board and all officers and
other senior employees of the Corporation and NFL shall report solely and
directly to the Executive or the Executive's designees. The Executive shall
perform his duties and responsibilities hereunder from such location or
locations, and at such time or times, as the Executive shall determine from time
to time in his sole discretion. Notwithstanding the above, the Executive shall
not be required to perform any duties and responsibilities which would be likely
to result in a non-compliance with or violation of any applicable law or
regulation.
4.2 Duties. During the Term of Employment, the Executive shall use his best
efforts to perform faithfully and efficiently the duties and responsibilities
contemplated by this Agreement, including, without limitation, establishing both
short and long-range strategic growth plans for the Corporation and NFL, and
achieving the Corporation's and NFL's financial targets; provided, however, that
the Executive shall be allowed, to the extent such activities do not
substantially interfere with the performance by the Executive of his duties and
responsibilities hereunder, to (a) manage the Executive's personal, financial
and legal affairs, and (b) serve on corporate, civic or charitable boards or
committees.
5. Compensation and Other Benefits.
5.1 Base Salary. During the Term of Employment, the Executive shall receive
a base salary of no less than US $468,000 per annum ("Base Salary") payable in
equal semi- monthly installments. Such Base Salary shall be reviewed annually
for increase (but, except as provided in the penultimate sentence of this
Section 5.1, not decrease) in the sole discretion of the Board or the Executive
Committee of the Board; provided, however, that such Base Salary shall in any
event be increased as of January 1 of each calendar year at a rate equal to the
percentage increase in the consumer price index as reported by the United States
Department of Labor for the immediately preceding calendar year. The Executive's
Base
Salary may only be reduced pursuant to a plan or program implementing a general
proportionate reduction in the base salary rate of substantially all of the
Corporation's and NFL's senior executives. Such increased (or decreased) Base
Salary shall then constitute the "Base Salary" for purposes of this Agreement.
5.2 Short-term Incentive. For each fiscal year of the Corporation (and in
addition to the Base Salary), the Executive shall be eligible to receive an
annual cash bonus ("Annual Bonus") determined by the Executive Committee of the
Board. Such Annual Bonus shall be payable to the Executive at such time as such
bonuses or similar bonuses are paid to other members of the Corporation's or
NFL's senior management.
5.3 Other Incentive and Savings Plans. During the Term of Employment, the
Executive shall be entitled to participate as of the Commencement Date in all
incentive, pension, retirement, savings, 401(k) and other employee pension
benefit plans and programs maintained by the Corporation and NFL from time to
time for the benefit of senior executives and/or other employees.
5.4 Welfare Benefit Plans. During the Term of Employment, the Executive,
the Executive's spouse, if any, and their eligible dependents, if any, shall be
entitled to participate as of the Commencement Date in and be covered under all
the welfare benefit plans or programs maintained by the Corporation and NFL from
time to time including, without limitation, all medical, hospitalization,
dental, disability, life, accidental death and dismemberment and travel accident
insurance plans and programs.
5.5 Long-Term Incentive Plan. In addition to Section 5.3, the Executive
shall be entitled to participate in a long-term incentive plan or program, which
plan or program shall provide an award opportunity ("LTIP Award") based on the
achievement of reasonable corporate objectives determined in good faith by the
Corporation or NFL. An LTIP Award may be in the form of performance shares,
performance units, stock options, restricted stock, or other types of awards
deemed appropriate by the Board, the Executive Committee or such other
committees of the Board.
5.6 Expense Reimbursement. During the Term of Employment, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in performing his duties and responsibilities
hereunder.
6. Termination.
6.1 Termination Due to Death or Disability. Upon 30 days prior written
notice to the Executive, the Corporation may terminate the Executive's
employment hereunder due to Disability. In the event of the Executive's death or
a termination of the Executive's employment by the Corporation due to
Disability, the Executive, his estate or his legal representative, as the case
may be, shall be entitled to:
(a) (i) in the case of death, (x) Base Salary continuation at the rate in
effect (as provided for by Section 5.1 of this Agreement) on the Date of
Termination for a period of three months after the date of death, plus (y)
a death benefit in an amount equal to three times the Base Salary at the
rate in effect (as provided for by Section 5.1 of this Agreement) on the
Date of Termination less any amounts paid to the Executive's
beneficiary(ies) pursuant to the group and/or other corporate life
insurance policies maintained by the Corporation or NFL, and (ii) in the
case of Disability, Base Salary continuation for 36 months after the Date
of Termination;
(b) any Base Salary accrued or any Annual Bonus or LTIP Award earned but not
yet paid as of the Date of Termination;
(c) a pro rata Annual Bonus payment for the calendar year in which death or
Disability occurs;
(d) reimbursement for all expenses incurred, but not yet paid prior to such
death or Disability;
(e) immediate and accelerated vesting of all restricted stock grants previously
awarded to the Executive under any plan or program maintained or
established by the Corporation and/or NFL;
(f) repayment, within thirty business days after the Date of Termination, of
the outstanding principal amount (and any accrued, but unpaid, interest
through the date of repayment) of any loans or other advances made by the
Executive to the Corporation, NFL or any Affiliate of either such entity;
(g) in the case of death, any other compensation and benefits as may be
provided in accordance with the terms and provisions of any applicable
plans and programs of the Corporation; and (h) in the case of Disability,
(i) continuation of the Executive's health and welfare benefits (as described
in Section 5.4 of this Agreement) at the level in effect (as provided for
by Section 5.4) on the Date of Termination through the end of the three
year period following the termination of the Executive's employment due to
Disability (or the Corporation and/or NFL shall provide the economic
equivalent thereof), and (ii) any other compensation and benefits as may be
provided in accordance with the terms and provisions of any applicable
plans and programs of the Corporation and NFL.
6.2 Termination by the Corporation for Cause. The Corporation may terminate the
Executive's employment hereunder for Cause as provided in this Section 6.2.
If the Corporation terminates the Executive's employment hereunder for
Cause, the Executive shall be entitled to:
(a) Base Salary continuation at the rate in effect (as provided for by Section
5.1 of this Agreement) at the time of such termination through the Date of
Termination;
(b) any Annual Bonus or LTIP Award earned but not yet paid as of the Date of
Termination;
(c) reimbursement for all expenses incurred, but not yet paid prior to such
termination of employment; and
(d) any other compensation and benefits as may be provided in accordance with
the terms and provisions of any applicable plans and programs of the
Corporation and NFL.
In any case described in this Section 6.2, the Executive shall be given
written notice authorized by a vote of at least a majority of the members of the
Board that the Corporation intends to terminate the Executive's employment
hereunder for Cause. Such written notice, given in accordance with Section 6.6
of this Agreement, shall specify the particular act or acts, or failure to act,
which is or are the basis for the decision to so terminate the Executive's
employment for Cause. The Executive shall be given the opportunity within 30
calendar days after the receipt of such notice to meet with the Board to defend
such act or acts, or failure to act, and the Executive shall be given 30
business days after such meeting to correct such act or failure to act. Upon
failure of the Executive, as determined by the Board, within such latter 30 day
period, to correct such act or failure to act, or if the Executive fails to meet
with the Board after being provided an opportunity to do so, the Executive's
employment by the Corporation shall automatically be terminated under this
Section 6.2 for Cause as of the date determined under Section 1.5 of this
Agreement.
6.3 Termination Without Cause or Termination For Good Reason. Upon 30 days
prior written notice to the affected party, the Corporation may terminate the
Executive's employment hereunder without Cause and the Executive may terminate
his employment hereunder for Good Reason. If the Corporation terminates the
Executive's employment hereunder without Cause, other than due to death or
Disability, or if the Executive terminates his employment for Good Reason, the
Executive shall be entitled to:
(a) a lump sum payment equal in amount to three times the sum of (i) the
Executive's Base Salary (as provided for by Section 5.1 of this Agreement),
and (ii) the highest Annual Bonus awarded to the Executive, such lump sum
amount to be paid within fifteen calendar days after the Date of
Termination;
(b) any Base Salary accrued or Annual Bonus and/or LTIP Award earned but not
yet paid as of the Date of Termination;
(c) reimbursement for all expenses incurred, but not yet paid prior to such
termination of employment;
(d) continuation of the health and welfare benefits of the Executive (as
described in Section 5.4 of this Agreement), including, without limitation,
life insurance benefits, at the level in effect (as provided for by Section
5.4 of this Agreement) on the Date of Termination through the end of the
three year period following such termination of employment (or the
Corporation and/or NFL shall provide the economic equivalent thereof);
(e) immediate and accelerated vesting of all restricted stock grants previously
awarded to the Executive under any plan or program maintained or
established by the Corporation and/or NFL;
(f) repayment, within thirty business days after the Date of Termination, of
the outstanding principal amount (and any accrued, but unpaid, interest
through the date of repayment) of any loans or other advances made by the
Executive to the Corporation, NFL or any Affiliate of either such entity;
and
(g) any other compensation and benefits as may be provided in accordance with
the terms and provisions of any applicable plans or programs of the
Corporation and NFL.
6.4 Voluntary Termination. The Executive may effect, upon 30 days prior
written notice to the Corporation, a Voluntary Termination of his employment
hereunder. A "Voluntary Termination" shall mean a termination of employment by
the Executive on his own initiative other than (a) a termination due to death or
Disability, or (b) a termination for Good Reason. A Voluntary Termination shall
not be a breach of this Agreement. If the Executive's employment hereunder is so
terminated, the Executive shall be entitled to:
(a) his Base Salary at the rate in effect (as provided for by Section 5.1
of this Agreement) at the time of such termination through the Date of
Termination;
(b) any Annual Bonus or LTIP Award earned but not yet paid as of the Date
of Termination;
(c) reimbursement for expenses incurred, but not yet paid prior to the Date
of Termination;
(d) repayment, within thirty business days after the Date of Termination,
of the outstanding principal amount (and any accrued, but unpaid, interest
through the date of repayment) of any loans or other advances made by the
Executive to the Corporation, NFL or any Affiliate of either such entity;
(e) continuation of the health and welfare benefits of the Executive (as
described in Section 5.4 of this Agreement), including, without limitation, life
insurance benefits, at the level in effect (as provided for by Section 5.4 of
this Agreement) on the Date of Termination through the end of the three-year
period following such termination of employment (or the Corporation and/or NFL
shall provide the economic equivalent thereof); and
(f) any other compensation and benefits as may be provided in accordance
with the terms and provisions of any applicable employee benefit plans or
programs maintained by the Corporation and NFL.
6.5 No Mitigation; No Offset. In the event of any termination of employment
under this Section 6, the Executive shall be under no obligation to seek other
employment and there shall be no offset against any amounts due the Executive
under this Agreement on account of any remuneration attributable to any
subsequent employment that the Executive may obtain. Any amounts due under this
Section 6 are in the nature of severance payments, or liquidated damages, or
both, and are not in the nature of a penalty.
6.6 Notice of Termination. Any termination by the Corporation for Cause or
by the Executive for Good Reason shall be communicated by a notice of
termination to the other party hereto given in accordance with Section 13.3 of
this Agreement (the "Notice of Termination"). The Notice of Termination shall be
given, in the case of a termination for Cause, within 90 business days after a
director of the Corporation (excluding the Executive) has actual knowledge of
the events giving rise to such purported termination, and in the case of a
termination by the Executive for Good Reason, within 180 days of the Executive's
having actual knowledge of the events giving rise to such termination. Such
notice shall (a) indicate the specific termination provision in this Agreement
relied upon, (b) set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated, and (c) if the termination date is other than the
date of receipt of such notice, specify the date on which the Executive's
employment is to be terminated (which date shall not be earlier than the date on
which such notice is actually given).
6.7 Certain Other Payments. Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with a Change in Control or the termination of
the Executive's employment, whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Corporation or any of its
subsidiaries (all such payments and benefits being hereinafter called the "Total
Payments") would subject the Executive to the excise tax imposed under Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") or any
successor section thereto (the "Excise Tax"), and if, and only if, such Total
Payments less the Excise Tax is less than the maximum amount of the Total
Payments which could be payable to the Executive without the imposition of the
Excise Tax, then and only then, and only to the extent necessary to eliminate
the imposition of the Excise Tax (and after taking into account any reduction in
the Total Payments provided by reason of Section 280G of the Code in any such
other plan, arrangement or agreement), (A) any cash payments hereunder shall
first be reduced (if necessary, to zero), and (B) all other non-cash payments
hereunder shall next be reduced. For purposes of this limitation (i) no portion
of the Total Payments the receipt or enjoyment of which the Executive shall have
effectively waived in writing prior to the Date of Termination shall be taken
into account, (ii) no portion of the Total Payments shall be taken into account
which in the opinion of tax counsel selected by the Corporation's independent
auditors and reasonably acceptable to the Executive does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the Code,
including by reason of section 280G(b)(4)(A) of the Code, (iii) all payments
shall be reduced only to the extent necessary so that the Total Payments (other
than those referred to in clauses (i) or (ii)) in their entirety constitute
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance
as deductions under Code Section 280G, in the opinion of the tax counsel
referred to in clause (ii); and (iv) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Corporation's independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.
6.8 Payment. Except as otherwise provided in this Agreement, any payments
to which the Executive shall be entitled to under this Section 6, including,
without limitation, any economic equivalent of any benefit, shall be made as
promptly as possible following the Date of Termination. If the amount of any
payment due to the Executive cannot be finally determined with 90 days after the
Date of Termination, such amount shall be estimated on a good faith basis by the
Corporation and/or NFL and the estimated amount shall be paid no later than 90
days after such Date of Termination. As soon as practicable thereafter, the
final determination of the amount due shall be made and any adjustment requiring
a payment to or from the Executive shall be made as promptly as practicable.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided or maintained by the Corporation
and/or NFL and/or any Affiliate and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the Executive
may have under any other existing or future agreements with the Corporation, NFL
and/or any Affiliate of either, including, without limitation, any stock option
agreements or plans. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plans or programs of the Corporation,
NFL and/or any Affiliate of either at or subsequent to the Date of Termination
shall be payable in accordance with such plans or programs.
8. Full Settlement. The Corporation's and NFL's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation and/or NFL may have against the Executive or others.
9. Legal Fees and Other Expenses. In the event that a claim for payment or
benefits under this Agreement is disputed, the Executive shall be reimbursed for
all attorney fees and expenses incurred by the Executive in pursuing such claim,
provided that the Executive is successful as to at least part of the disputed
claim by reason of litigation, arbitration or settlement. In addition, the
Executive shall be paid or reimbursed for all legal fees and expenses incurred
by the Executive in connection with the review, preparation and negotiation of
this Agreement and/or any other agreements or plans referenced herein.
10. Confidential Information and Nonsolicitation.
10.1 Confidential Information. The Executive shall not, during the Term of
Employment and thereafter, without the prior express written consent of the
Corporation, disclose any confidential information, knowledge or data relating
to the Corporation, NFL or any Affiliate of either and their respective
businesses, which (a) was obtained by the Executive in the course of the
Executive's employment with the Corporation and NFL, and (b) which is not
information, knowledge or data otherwise in the public domain (other than by
reason of a breach of this provision by the Executive), unless required to do so
by a court of law or equity or by any governmental agency or other authority. In
no event shall an asserted violation of this Section 10.1 constitute a basis for
delaying or withholding the payment of any amounts otherwise payable to the
Executive under this Agreement.
10.2 No Solicitation. The Executive hereby agrees that, if his employment
hereunder is terminated by the Corporation for Cause or by the Executive under
Section 6.4 of this Agreement, he shall not, for eighteen months after the Date
of Termination, directly or indirectly, divert, solicit or take away the
patronage of (a) any customers or agents of the Corporation, NFL or any
Affiliate of either as of the relevant Date of Termination, or (b) any
prospective customers or agents of the Corporation or any Affiliate whose
business the Corporation and/or NFL was actively soliciting on the relevant Date
of Termination, and with which the Executive had business contact while employed
by the Corporation and NFL. The Executive agrees that, under the circumstances
and conditions described above and for the same period of time, the Executive
shall not, directly or indirectly, induce or solicit any employees or agents of
the Corporation, NFL or any Affiliate of either to leave or terminate their
employment or agency relationship with the Corporation or NFL. The Corporation
and NFL agrees that (i) any announcement made by the Executive, at any press
conference or in any press release or through individual notices, shall not, in
and of itself, constitute an attempt directly or indirectly to induce, divert,
solicit or take away customers or employees, (ii) any such announcement creates
no presumption with respect to any such inducement, diversion, solicitation or
taking, and (iii) in all cases both the burden of production of evidence and the
ultimate burden of persuasion with respect to any allegations or claims that
this Section 10.2 has been breached or violated by the Executive shall be borne
by the Corporation and NFL.
11. Successors.
11.1 The Executive. This Agreement is personal to the Executive and,
without the prior express written consent of the Corporation, shall not be
assignable by the Executive, except that the Executive's rights to receive any
compensation or benefits under this Agreement may be transferred or disposed of
pursuant to testamentary disposition, intestate succession or pursuant to a
domestic relations order. This Agreement shall inure to the benefit of and be
enforceable by the Executive's heirs, beneficiaries and/or legal
representatives.
11.2 The Corporation. This Agreement shall inure to the benefit of and be
binding upon the Corporation, NFL and their respective successors and assigns.
The Corporation shall require any successor to all or substantially all of its
or NFL's business and/or assets, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock, or otherwise, by an agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent as the
Corporation and NFL would be required to perform if no such succession had taken
place.
12. Indemnification. The Corporation agrees that if the Executive is made a
party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director or officer of the Corporation,
NFL and/or any Affiliate of either or is or was serving at the request of the
Corporation, NFL and/or any Affiliate as a director, officer, member, employee
or agent of another corporation or of a partnership, joint venture, trust or
other enterprise, including, without limitation, service with respect to
employee benefit plans, whether or not the basis of such Proceeding is alleged
action in an official capacity as a director, officer, member, employee or agent
while serving as a director, officer, member, employee or agent, he shall be
indemnified and held harmless by the Corporation and NFL to the fullest extent
authorized by applicable law, as the same exists or may hereafter be amended,
against all Expenses incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even if
the Executive has ceased to be an officer, director or agent, or is no longer
employed by the Corporation and/or NFL and shall inure to the benefit of his
heirs, executors and administrators.
13. Miscellaneous.
13.1 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, applied without reference to
principles of conflict of laws.
13.2 Amendments. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
13.3 Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand-delivery to the other parties or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Mr. Martin E. Kantor
28 Shore Cliff Place
Great Neck, New York 11023
If to the Corporation: Westbridge Capital Corp.
777 Main Street
Fort Worth, Texas 76102
Attention: General Counsel
If to NFL: National Foundation Life
Insurance Company
777 Main Street
Fort Worth, Texas 76102
Attention: General Counsel
with a copy, in any case, to: Robert S. Reder, Esq.
Milbank, Tweed, Hadley
& McCloy
1 Chase Manhattan Plaza
New York, NY 10005
or to such other address as any party hereto shall have furnished to the others
in writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
13.4 Withholding. The Corporation and/or NFL may withhold from any amounts
payable under this Agreement such federal, state or local income taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
13.5 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
13.6 Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
13.7 Beneficiaries/References. The Executive shall be entitled to select
(and change) a beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following the Executive's death, and may change such
election, in either case by giving the Corporation or NFL written notice
thereof. In the event of the Executive's death or a judicial determination of
his incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his beneficiary(ies), estate or other legal
representative(s).
13.8 Entire Agreement. This Agreement contains the entire agreement between
the parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect thereto.
13.9 Representations. The Corporation and NFL each represents and warrants
that it is fully authorized and empowered to enter into this Agreement. The
Executive represents and warrants that the performance of the Executive's duties
under this Agreement will not violate any agreement between the Executive and
any other person, firm, partnership, corporation, or organization.
13.10 Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement or the Executive's
Term of employment hereunder for any reason to the extent necessary to the
intended provision of such rights and the intended performance of such
obligations.
13.11 Arbitration of Disputes. In the event that any disputes of any kind
arise under or with respect to this Agreement, the Executive, NFL and the
Corporation agree to submit any such dispute to binding arbitration in the State
of New York in accordance with the rules of the American Arbitration Association
then in effect.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and
the Corporation and NFL have each caused this Agreement to be executed in its
name on its behalf, and attested to by their respective Secretaries, all as of
the day and year first above written.
Westbridge Capital Corp.
Attest: By: ________________________
Name: ________________________
Title: ________________________
- --------------------
National Foundation Life Insurance Company
Attest: By: ________________________
Name: ________________________
Title: ________________________
- --------------------
----------------------------------
Martin E. Kantor
Tax\20632_3
<PAGE>
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Agreement (this "Agreement"), dated as of April 1, 1996, is made by
and among Westbridge Capital Corp., a Delaware corporation, having its principal
offices at 777 Main Street, Fort Worth, Texas 76102 (the "Corporation"),
National Foundation Life Insurance Company, a Delaware corporation, having its
principal offices at 777 Main Street, Fort Worth, Texas 76102 ("NFL"), and Mr.
James W. Thigpen (the "Executive"), residing at 3605 Ridglea
Country Club Drive, Fort Worth, Texas 76116 .
Recitals
1. The Corporation and NFL each desire to retain the Executive as a
director of the Corporation and NFL and to employ him as the President and the
Chief Operating Officer of the Corporation and NFL, and to enter into an
agreement embodying the terms of those relationships.
2. The Executive is willing to serve as a director of the Corporation and
NFL and is willing to serve as the President and the Chief Operating Officer of
the Corporation and NFL on the terms set forth herein.
Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and other good and valuable consideration, the Corporation,
NFL and the Executive hereby agree as follows.
1. Definitions.
1.1 "Affiliate" means any person or entity controlling, controlled by or
under common control with the Corporation.
1.2 "Annual Compensation" means the Executive's highest Base Salary and
Annual Bonus during the Term of Employment.
1.3 "Board" means the Board of Directors of the Corporation.
1.4 "Cause" means (a) the Executive is convicted of a felony involving
actual dishonesty as against the Corporation or NFL, or (b) the Executive, in
carrying out his duties and responsibilities under this Agreement, voluntarily
engages in conduct which is demonstrably and materially injurious to the
Corporation or NFL, monetarily or otherwise, unless such act, or failure to act,
was believed by the Executive in good faith to be in the best interests of the
Corporation or NFL.
<PAGE>
1.5 "Date of Termination" means (a) in the case of a termination for which
a Notice of Termination is required, the date of actual receipt of such Notice
of Termination or, if later, the date specified therein (in no event, however,
shall such date be later than sixty days after the date of actual receipt of
such notice), as the case may be, and (b) in all other cases, the actual date on
which the Executive's employment terminates during the Term of Employment.
1.6 "Disability" means the Executive's inability to render, for a period of
six consecutive months, services hereunder by reason of permanent disability, as
determined by the written medical opinion of an independent medical physician
mutually acceptable to the Executive and the Corporation. If the Executive and
the Corporation cannot agree as to such an independent medical physician, each
shall appoint one medical physician and those two physicians shall appoint a
third physician who shall make such determination.
1.7 "Good Reason" means and shall be deemed to exist if, without the prior
express written consent of the Executive, (a) the Executive is assigned any
duties or responsibilities inconsistent in any material respect with the scope
of the duties or responsibilities associated with the Executive's titles or
positions, as set forth and described in Section 4 of this Agreement; (b) the
Executive suffers a reduction in the duties, responsibilities or effective
authority associated with his titles and positions, as set forth and described
in Section 4 of this Agreement; (c) the Executive is not appointed to, or is
removed from, the offices or positions provided for in Section 4 of this
Agreement; (d) the Executive's compensation is decreased by the Corporation or
NFL, or the Executive's benefits under employee benefit or health or welfare
plans or programs of the Corporation or NFL are in the aggregate materially
decreased (unless such decrease is attributable to or part of a plan or program
implementing a general reduction in such benefits for substantially all of the
Corporation's and NFL's senior executives, or unless there is substituted
reasonably comparable benefits); (e) the Corporation and NFL fail to obtain the
full assumption of this Agreement by a successor entity in accordance with
Section 11.2 of this Agreement; (f) the Corporation and NFL fail to use their
reasonable best efforts to maintain, or cause to be maintained, adequate
directors and officers liability insurance coverage for the Executive; or (g)
the Corporation or NFL purport to terminate the Executive's employment for Cause
and such purported termination of employment is not effected in accordance with
the requirements of this Agreement.
1.8 "Term of Employment" has the meaning ascribed to it in Section 3.
2. Employment. Subject to the terms and provisions set forth in this
Agreement, the Corporation hereby agrees to use its best efforts to cause the
Executive to be a director of the Corporation, and shall appoint or elect the
Executive as a director of NFL, during the Term of Employment and each of the
Corporation and NFL agrees during the Term of Employment to employ the Executive
as the President and Chief Operating Officer of each of the Corporation and NFL,
and the Executive hereby accepts such employment and directorships.
3. Term of Employment. The term of employment under this Agreement shall
commence on April 1, 1996 (the "Commencement Date") and, unless earlier
terminated under Section 6 below or extended pursuant to the next sentence,
shall terminate on the fifth anniversary of the Commencement Date (the "Term of
Employment"). On such fifth and each succeeding anniversary, the Term of
Employment shall automatically be extended for an additional one year period
unless, not later than six months prior to any such anniversary, either party to
this Agreement shall have given notice to the other that the Term of Employment
shall not be extended or further extended beyond its then automatically extended
term, if any.
4. Positions, Responsibilities and Duties.
4.1 Positions. During the Term of Employment, the Executive shall be
employed and serve as the President and Chief Operating Officer of each of the
Corporation and NFL and, if elected by the Corporation's shareholders, he shall
be a director of the Corporation. The Executive, during the Term, shall also be
appointed or elected as, and during such time shall be, a director of NFL. In
such positions, the Executive shall have the duties, responsibilities and
authority normally associated with the office and position of director (if and
when elected in the case of the Corporation), president and chief operating
officer of a publicly-traded corporation. The Executive shall report to the
chief executive officer of the Corporation and NFL, respectively (the "CEOs"),
and to the Board. All other officers and other senior employees of the
Corporation and NFL shall report to the Executive or the Executive's designees
with and subject to the approval of the CEOs and the Board. The Executive shall
perform his duties and responsibilities hereunder at the Corporation's principal
offices. Notwithstanding the above, the Executive shall not be required to
perform any duties and responsibilities which would be likely to result in a
non-compliance with or violation of any applicable law or regulation.
4.2 Duties. During the Term of Employment, the Executive shall use his best
efforts to perform faithfully and efficiently the duties and responsibilities
contemplated by this Agreement, including, without limitation, establishing both
short and long-range strategic growth plans for the Corporation and NFL, and
achieving the Corporation's and NFL's financial targets; provided, however, that
the Executive shall be allowed, to the extent such activities do not
substantially interfere with the performance by the Executive of his duties and
responsibilities hereunder, to (a) manage the Executive's personal, financial
and legal affairs, and (b) serve on corporate, civic or charitable boards or
committees.
5. Compensation and Other Benefits.
5.1 Base Salary. During the Term of Employment, the Executive shall receive
a base salary of no less than US $380,000 per annum ("Base Salary") payable in
equal semi- monthly installments. Such Base Salary shall be reviewed annually
for increase (but, except as provided in the penultimate sentence of this
Section 5.1, not decrease) in the sole discretion of the Board or the Executive
Committee of the Board; provided, however, that such Base Salary shall in any
event be increased as of January 1 of each calendar year at a rate equal to the
percentage increase in the consumer price index as reported by the United States
Department of Labor for the immediately preceding calendar year. The Executive's
Base Salary may only be reduced pursuant to a plan or program implementing a
general proportionate reduction in the base salary rate of substantially all of
the Corporation's and NFL's senior executives. Such increased (or decreased)
Base Salary shall then constitute the "Base Salary" for purposes of this
Agreement.
5.2 Short-term Incentive. For each fiscal year of the Corporation (and in
addition to the Base Salary), the Executive shall be eligible to receive an
annual cash bonus ("Annual Bonus") determined by the Executive Committee of the
Board. Such Annual Bonus shall be payable to the Executive at such time as such
bonuses or similar bonuses are paid to other members of the Corporation's or
NFL's senior management.
5.3 Other Incentive and Savings Plans. During the Term of Employment, the
Executive shall be entitled to participate as of the Commencement Date in all
incentive, pension, retirement, savings, 401(k) and other employee pension
benefit plans and programs maintained by the Corporation and NFL from time to
time for the benefit of senior executives and/or other employees.
5.4 Welfare Benefit Plans. During the Term of Employment, the Executive,
the Executive's spouse, if any, and their eligible dependents, if any, shall be
entitled to participate as of the Commencement Date in and be covered under all
the welfare benefit plans or programs maintained by the Corporation and NFL from
time to time including, without limitation, all medical, hospitalization,
dental, disability, life, accidental death and dismemberment and travel accident
insurance plans and programs.
5.5 Long-Term Incentive Plan. In addition to Section 5.3, the Executive
shall be entitled to participate in a long-term incentive plan or program, which
plan or program shall provide an award opportunity ("LTIP Award") based on the
achievement of reasonable corporate objectives determined in good faith by the
Corporation or NFL. An LTIP Award may be in the form of performance shares,
performance units, stock options, restricted stock, or other types of awards
deemed appropriate by the Board, the Executive Committee or such other
committees of the Board.
5.6 Expense Reimbursement. During the Term of Employment, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in performing his duties and responsibilities
hereunder.
6. Termination.
6.1 Termination Due to Death or Disability. Upon 30 days prior written
notice to the Executive, the Corporation may terminate the Executive's
employment hereunder due to Disability. In the event of the Executive's death or
a termination of the Executive's employment by the Corporation due to
Disability, the Executive, his estate or his legal representative, as the case
may be, shall be entitled to:
(a) (i) in the case of death, (x) Base Salary continuation at the rate in
effect (as provided for by Section 5.1 of this Agreement) on the Date of
Termination for a period of three months after the date of death, plus (y) a
death benefit in an amount equal to three times the Base Salary at the rate in
effect (as provided for by Section 5.1 of this Agreement) on the Date of
Termination less any amounts paid to the Executive's beneficiary(ies) pursuant
to the group and/or other corporate life insurance policies maintained by the
Corporation or NFL, and (ii) in the case of Disability, Base Salary continuation
for 36 months after the Date of Termination;
(b) any Base Salary accrued or any Annual Bonus or LTIP Award earned but
not yet paid as of the Date of Termination;
(c) a pro rata Annual Bonus payment for the calendar year in which death or
Disability occurs;
(d) reimbursement for all expenses incurred, but not yet paid prior to such
death or Disability;
(e) immediate and accelerated vesting of all restricted stock grants
previously awarded to the Executive under any plan or program maintained or
established by the Corporation and/or NFL;
(f) in the case of death, any other compensation and benefits as may be
provided in accordance with the terms and provisions of any applicable plans and
programs of the Corporation; and
(g) in the case of Disability, (i) continuation of the Executive's health
and welfare benefits (as described in Section 5.4 of this Agreement) at the
level in effect (as provided for by Section 5.4) on the Date of Termination
through the end of the three year period following the termination of the
Executive's employment due to Disability (or the Corporation and/or NFL shall
provide the economic equivalent thereof), and (ii) any other compensation and
benefits as may be provided in accordance with the terms and provisions of any
applicable plans and programs of the Corporation and NFL.
6.2 Termination by the Corporation for Cause. The Corporation may terminate
the Executive's employment hereunder for Cause as provided in this Section 6.2.
If the Corporation terminates the Executive's employment hereunder for Cause,
the Executive shall be entitled to:
(a) Base Salary continuation at the rate in effect (as provided for by
Section 5.1 of this Agreement) at the time of such termination through the Date
of Termination;
(b) any Annual Bonus or LTIP Award earned but not yet paid as of the Date
of Termination;
(c) reimbursement for all expenses incurred, but not yet paid prior to such
termination of employment; and
(d) any other compensation and benefits as may be provided in accordance
with the terms and provisions of any applicable plans and programs of the
Corporation and NFL.
In any case described in this Section 6.2, the Executive shall be given
written notice authorized by a vote of at least a majority of the members of the
Board that the Corporation intends to terminate the Executive's employment
hereunder for Cause. Such written notice, given in accordance with Section 6.6
of this Agreement, shall specify the particular act or acts, or failure to act,
which is or are the basis for the decision to so terminate the Executive's
employment for Cause. The Executive shall be given the opportunity within 30
calendar days after the receipt of such notice to meet with the Board to defend
such act or acts, or failure to act, and the Executive shall be given 30
business days after such meeting to correct such act or failure to act. Upon
failure of the Executive, as determined by the Board, within such latter 30 day
period, to correct such act or failure to act, or if the Executive fails to meet
with the Board after being provided an opportunity to do so, the Executive's
employment by the Corporation shall automatically be terminated under this
Section 6.2 for Cause as of the date determined under Section 1.5 of this
Agreement.
6.3 Termination Without Cause or Termination For Good Reason. Upon 30 days
prior written notice to the affected party, the Corporation may terminate the
Executive's employment hereunder without Cause and the Executive may terminate
his employment hereunder for Good Reason. If the Corporation terminates the
Executive's employment hereunder without Cause, other than due to death or
Disability, or if the Executive terminates his employment for Good Reason, the
Executive shall be entitled to:
(a) a lump sum payment equal in amount to three times the sum of (i) the
Executive's Base Salary (as provided for by Section 5.1 of this Agreement), and
(ii) the highest Annual Bonus awarded to the Executive, such lump sum amount to
be paid within fifteen calendar days after the Date of Termination;
(b) any Base Salary accrued or Annual Bonus and/or LTIP Award earned but
not yet paid as of the Date of Termination;
(c) reimbursement for all expenses incurred, but not yet paid prior to such
termination of employment;
(d) continuation of the health and welfare benefits of the Executive (as
described in Section 5.4 of this Agreement), including, without limitation, life
insurance benefits, at the level in effect (as provided for by Section 5.4 of
this Agreement) on the Date of Termination through the end of the three year
period following such termination of employment (or the Corporation and/or NFL
shall provide the economic equivalent thereof);
(e) immediate and accelerated vesting of all restricted stock grants
previously awarded to the Executive under any plan or program maintained or
established by the Corporation and/or NFL; and
(f) any other compensation and benefits as may be provided in accordance
with the terms and provisions of any applicable plans or programs of the
Corporation and NFL.
6.4 Voluntary Termination. The Executive may effect, upon 30 days prior
written notice to the Corporation, a Voluntary Termination of his employment
hereunder. A "Voluntary Termination" shall mean a termination of employment by
the Executive on his own initiative other than (a) a termination due to death or
Disability, or (b) a termination for Good Reason. A Voluntary Termination shall
not be a breach of this Agreement. If the Executive's employment hereunder is so
terminated, the Executive shall be entitled to:
(a) his Base Salary at the rate in effect (as provided for by Section 5.1
of this Agreement) at the time of such termination through the Date of
Termination;
(b) any Annual Bonus or LTIP Award earned but not yet paid as of the Date
of Termination;
(c) reimbursement for expenses incurred, but not yet paid prior to the Date
of Termination;
(d) continuation of the health and welfare benefits of the Executive (as
described in Section 5.4 of this Agreement), including, without limitation, life
insurance benefits, at the level in effect (as provided for by Section 5.4 of
this Agreement) on the Date of Termination through the end of the three-year
period following such termination of employment (or the Corporation and/or NFL
shall provide the economic equivalent thereof); and
(e) any other compensation and benefits as may be provided in accordance
with the terms and provisions of any applicable employee benefit plans or
programs maintained by the Corporation and NFL.
6.5 No Mitigation; No Offset. In the event of any termination of employment
under this Section 6, the Executive shall be under no obligation to seek other
employment and there shall be no offset against any amounts due the Executive
under this Agreement on account of any remuneration attributable to any
subsequent employment that the Executive may obtain. Any amounts due under this
Section 6 are in the nature of severance payments, or liquidated damages, or
both, and are not in the nature of a penalty.
6.6 Notice of Termination. Any termination by the Corporation for Cause or
by the Executive for Good Reason shall be communicated by a notice of
termination to the other party hereto given in accordance with Section 13.3 of
this Agreement (the "Notice of Termination"). The Notice of Termination shall be
given, in the case of a termination for Cause, within 90 business days after a
director of the Corporation (excluding the Executive) has actual knowledge of
the events giving rise to such purported termination, and in the case of a
termination by the Executive for Good Reason, within 180 days of the Executive's
having actual knowledge of the events giving rise to such termination. Such
notice shall (a) indicate the specific termination provision in this Agreement
relied upon, (b) set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated, and (c) if the termination date is other than the
date of receipt of such notice, specify the date on which the Executive's
employment is to be terminated (which date shall not be earlier than the date on
which such notice is actually given).
6.7 Certain Other Payments. Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with the termination of the Executive's
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Corporation or any of its subsidiaries (all
such payments and benefits being hereinafter called the "Total Payments") would
subject the Executive to the excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor section
thereto (the "Excise Tax"), and if, and only if, such Total Payments less the
Excise Tax is less than the maximum amount of the Total Payments which could be
payable to the Executive without the imposition of the Excise Tax, then and only
then, and only to the extent necessary to eliminate the imposition of the Excise
Tax (and after taking into account any reduction in the Total Payments provided
by reason of Section 280G of the Code in any such other plan, arrangement or
agreement), (A) any cash payments hereunder shall first be reduced (if
necessary, to zero), and (B) all other non-cash payments hereunder shall next be
reduced. For purposes of this limitation (i) no portion of the Total Payments
the receipt or enjoyment of which the Executive shall have effectively waived in
writing prior to the Date of Termination shall be taken into account, (ii) no
portion of the Total Payments shall be taken into account which in the opinion
of tax counsel selected by the Corporation's independent auditors and reasonably
acceptable to the Executive does not constitute a "parachute payment" within the
meaning of section 280G(b)(2) of the Code, including by reason of section
280G(b)(4)(A) of the Code, (iii) all payments shall be reduced only to the
extent necessary so that the Total Payments (other than those referred to in
clauses (i) or (ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of section 280G(b)(4)(B) of the
Code or are otherwise not subject to disallowance as deductions under Code
Section 280G, in the opinion of the tax counsel referred to in clause (ii); and
(iv) the value of any non-cash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Corporation's
independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.
6.8 Payment. Except as otherwise provided in this Agreement, any payments
to which the Executive shall be entitled to under this Section 6, including,
without limitation, any economic equivalent of any benefit, shall be made as
promptly as possible following the Date of Termination. If the amount of any
payment due to the Executive cannot be finally determined with 90 days after the
Date of Termination, such amount shall be estimated on a good faith basis by the
Corporation and/or NFL and the estimated amount shall be paid no later than 90
days after such Date of Termination. As soon as practicable thereafter, the
final determination of the amount due shall be made and any adjustment requiring
a payment to or from the Executive shall be made as promptly as practicable.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided or maintained by the Corporation
and/or NFL and/or any Affiliate and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the Executive
may have under any other existing or future agreements with the Corporation, NFL
and/or any Affiliate of either, including, without limitation, any stock option
agreements or plans. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plans or programs of the Corporation,
NFL and/or any Affiliate of either at or subsequent to the Date of Termination
shall be payable in accordance with such plans or programs.
8. Full Settlement. The Corporation's and NFL's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation and/or NFL may have against the Executive or others.
9. Legal Fees and Other Expenses. In the event that a claim for payment or
benefits under this Agreement is disputed, the Executive shall be reimbursed for
all attorney fees and expenses incurred by the Executive in pursuing such claim,
provided that the Executive is successful as to at least part of the disputed
claim by reason of litigation, arbitration or settlement. In addition, the
Executive shall be paid or reimbursed for all legal fees and expenses incurred
by the Executive in connection with the review, preparation and negotiation of
this Agreement and/or any other agreements or plans referenced herein.
10. Confidential Information and Nonsolicitation.
10.1 Confidential Information. The Executive shall not, during the Term of
Employment and thereafter, without the prior express written consent of the
Corporation, disclose any confidential information, knowledge or data relating
to the Corporation, NFL or any Affiliate of either and their respective
businesses, which (a) was obtained by the Executive in the course of the
Executive's employment with the Corporation and NFL, and (b) which is not
information, knowledge or data otherwise in the public domain (other than by
reason of a breach of this provision by the Executive), unless required to do so
by a court of law or equity or by any governmental agency or other authority. In
no event shall an asserted violation of this Section 10.1 constitute a basis for
delaying or withholding the payment of any amounts otherwise payable to the
Executive under this Agreement.
10.2 No Solicitation. The Executive hereby agrees that, if his employment
hereunder is terminated by the Corporation for Cause or by the Executive under
Section 6.4 of this Agreement, he shall not, for eighteen months after the Date
of Termination, directly or indirectly, divert, solicit or take away the
patronage of (a) any customers or agents of the Corporation, NFL or any
Affiliate of either as of the relevant Date of Termination, or (b) any
prospective customers or agents of the Corporation or any Affiliate whose
business the Corporation and/or NFL was actively soliciting on the relevant Date
of Termination, and with which the Executive had business contact while employed
by the Corporation and NFL. The Executive agrees that, under the circumstances
and conditions described above and for the same period of time, the Executive
shall not, directly or indirectly, induce or solicit any employees or agents of
the Corporation, NFL or any Affiliate of either to leave or terminate their
employment or agency relationship with the Corporation or NFL. The Corporation
and NFL agrees that (i) any announcement made by the Executive, at any press
conference or in any press release or through individual notices, shall not, in
and of itself, constitute an attempt directly or indirectly to induce, divert,
solicit or take away customers or employees, (ii) any such announcement creates
no presumption with respect to any such inducement, diversion, solicitation or
taking, and (iii) in all cases both the burden of production of evidence and the
ultimate burden of persuasion with respect to any allegations or claims that
this Section 10.2 has been breached or violated by the Executive shall be borne
by the Corporation and NFL.
11. Successors.
11.1 The Executive. This Agreement is personal to the Executive and,
without the prior express written consent of the Corporation, shall not be
assignable by the Executive, except that the Executive's rights to receive any
compensation or benefits under this Agreement may be transferred or disposed of
pursuant to testamentary disposition, intestate succession or pursuant to a
domestic relations order. This Agreement shall inure to the benefit of and be
enforceable by the Executive's heirs, beneficiaries and/or legal
representatives.
11.2 The Corporation. This Agreement shall inure to the benefit of and be
binding upon the Corporation, NFL and their respective successors and assigns.
The Corporation shall require any successor to all or substantially all of its
or NFL's business and/or assets, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock, or otherwise, by an agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent as the
Corporation and NFL would be required to perform if no such succession had taken
place.
12. Indemnification. The Corporation agrees that if the Executive is made a
party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director or officer of the Corporation,
NFL and/or any Affiliate of either or is or was serving at the request of the
Corporation, NFL and/or any Affiliate as a director, officer, member, employee
or agent of another corporation or of a partnership, joint venture, trust or
other enterprise, including, without limitation, service with respect to
employee benefit plans, whether or not the basis of such Proceeding is alleged
action in an official capacity as a director, officer, member, employee or agent
while serving as a director, officer, member, employee or agent, he shall be
indemnified and held harmless by the Corporation and NFL to the fullest extent
authorized by applicable law, as the same exists or may hereafter be amended,
against all Expenses incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even if
the Executive has ceased to be an officer, director or agent, or is no longer
employed by the Corporation and/or NFL and shall inure to the benefit of his
heirs, executors and administrators.
13. Miscellaneous.
13.1 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, applied without reference to
principles of conflict of laws.
13.2 Amendments. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
13.3 Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand-delivery to the other parties or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Mr. James W. Thigpen
3605 Ridglea Country Club Drive
Fort Worth, Texas 76116
If to the Corporation: Westbridge Capital Corp.
777 Main Street
Fort Worth, Texas 76102
Attention: General Counsel
If to NFL: National Foundation Life
Insurance Company
777 Main Street
Fort Worth, Texas 76102
Attention: General Counsel
with a copy, in any case, to: Robert S. Reder, Esq.
Milbank, Tweed, Hadley
& McCloy
1 Chase Manhattan Plaza
New York, NY 10005
or to such other address as any party hereto shall have furnished to the others
in writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
13.4 Withholding. The Corporation and/or NFL may withhold from any amounts
payable under this Agreement such federal, state or local income taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
13.5 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
13.6 Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
13.7 Beneficiaries/References. The Executive shall be entitled to select
(and change) a beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following the Executive's death, and may change such
election, in either case by giving the Corporation or NFL written notice
thereof. In the event of the Executive's death or a judicial determination of
his incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his beneficiary(ies), estate or other legal
representative(s).
13.8 Entire Agreement. This Agreement contains the entire agreement between
the parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect thereto.
13.9 Representations. The Corporation and NFL each represents and warrants
that it is fully authorized and empowered to enter into this Agreement. The
Executive represents and warrants that the performance of the Executive's duties
under this Agreement will not violate any agreement between the Executive and
any other person, firm, partnership, corporation, or organization.
13.10 Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement or the Executive's
Term of employment hereunder for any reason to the extent necessary to the
intended provision of such rights and the intended performance of such
obligations.
13.11 Arbitration of Disputes. In the event that any disputes of any kind
arise under or with respect to this Agreement, the Executive, NFL and the
Corporation agree to submit any such dispute to binding arbitration in the State
of New York in accordance with the rules of the American Arbitration Association
then in effect.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and
the Corporation and NFL have each caused this Agreement to be executed in its
name on its behalf, and attested to by their respective Secretaries, all as of
the day and year first above written.
Westbridge Capital Corp.
Attest: By: _________________________________
Name: _________________________________
____________________ Title: _________________________________
National Foundation Life Insurance Company
Attest: By: _________________________________
Name: _________________________________
___________________ Title: _________________________________
---------------------------------------
James W. Thigpen
Tax\29352_3
<PAGE>
Exhibit 10.3
EMPLOYMENT CONTRACT
By this Agreement, Westbridge Capital Corp., referred to in this
Agreement as Employer, located at 777 Main Street, Fort Worth, Texas 76102,
employs Stephen D. Davidson, referred to in this Agreement as Employee, of 2420
Stadium Drive, Fort Worth, Texas 76109, who accepts employment of the following
terms and conditions:
ARTICLE 1
TERM OF EMPLOYMENT
1.01 By this Agreement, the Employer employs the Employee, and the Employee
accepts employment with the Employer, for a period of five (5) years beginning
the 1st day of January, 1996; however, this Agreement may be terminated earlier,
as provided in Article 9, below.
ARTICLE 2
COMPENSATION
BASIC COMPENSATION
2.01 As compensation for all services rendered under this Agreement, the
Employee shall be paid by the Employer a minimum salary of $250,000 per year,
payable in equal semi-monthly installments of $10,417 on the first and fifteenth
days of each month during the period of employment. The amount paid is to be
prorated for any partial employment period.
ARTICLE 3
DUTIES OF EMPLOYEE
3.01 The Employee is employed as President of Employer's wholly owned
subsidiary, Westbridge Marketing, Inc., and shall work at the office of Employer
and its subsidiary located at 777 Main Street, Fort Worth, Texas 76102. The
Employee shall perform all duties commonly discharged by company presidents.
Additionally, the Employee is required to perform other duties of a similar
nature as may be required from time to time by the Employer.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 1
<PAGE>
3.02 The Employee shall devote his entire productive time, ability,
attention, and energies to the business of the Employer during the term of this
Agreement. During such time, the Employee shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether or not for compensation, without the prior
written consent of the Employer.
ARTICLE 4
EMPLOYEE'S OBLIGATIONS OTHER THAN TO
PERFORM SERVICES
NON-COMPETITION BY EMPLOYEE
4.01 During the term of this Agreement, the Employee shall not, directly or
indirectly, either as an employee, employer, consultant, insurance agent,
marketer, general agent, principal, partner, stockholder, corporate officer,
director, manager of a limited liability company, or in any other individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the business of Employer, or any of
its subsidiaries. Furthermore, on termination by the Employee of this Agreement,
the Employee expressly agrees not to engage or participate, directly or
indirectly, in the establishment or recruitment of any insurance agents or
marketers of insurance or health maintenance organization products who are
affiliated with Employer, or any of its subsidiaries, or otherwise solicit such
agents or marketers for the purposes of competition with the insurance policies
or health maintenance organization products offered for sale by Employer, or any
of its subsidiaries. Employee further agrees that upon such termination by the
Employee, for a period of one (1) year, he will not engage or participate,
directly or indirectly, in any insurance marketing or health maintenance
organization marketing business located within a radius of ten miles of any city
or town in which Employer, or any of its subsidiaries, have sold or participated
in the sale of any insurance policy or health maintenance organization product
during the term of this Agreement.
ARTICLE 5
EMPLOYEE BENEFITS AND BONUSES
BENEFITS
5.01 The Employer agrees to include the Employee as a participant and/or
recipient of all employment benefits provided to the senior officers of the
Employer.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 2
<PAGE>
BONUSES
5.02 In addition to the Employee's salary provided in paragraph 2.01 of
this Agreement, the Employer may, in its sole discretion choose to pay the
Employee a cash bonus at the end of each calendar year during the term of this
Agreement. Upon termination of employment, the Employee shall not be entitled to
any portion of the bonus for the employment year of termination.
ARTICLE 6
REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE
BUSINESS EXPENSES
6.01 The Employee is authorized to incur reasonable business expenses for
promoting the business of the Employer, including expenditures for
entertainment, gifts, and travel. The Employer will reimburse the Employee for
all such expenses upon the Employee's presentation and itemized account of such
expenditures.
ARTICLE 7
PROPERTY RIGHTS OF PARTIES
TRADE SECRETS
7.01 During the term of employment, the Employee will have access to and
become familiar with various trade secrets, consisting of formulas, devices,
secret inventions, processes, and compilations of information, records,
specifications, actuarial data, marketing strategies, marketing organization
formations, and marketing organization compensation formulas, owned by the
Employer, and/or any of its subsidiaries, and regularly used in the operation of
the business of the Employer, and/or any of its subsidiaries. The Employee shall
not disclose any such trade secrets, directly or indirectly, nor use them in any
way, either during the term of this Agreement or at any time thereafter, except
as required in the course of his employment. All files, records, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Employer, and/or any of its subsidiaries, whether or not prepared by the
Employee, shall remain the exclusive property of the Employer and shall not be
removed from the premises of the Employer, and/or any of its subsidiaries, under
any circumstances without the prior written consent of the Employer.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 3
<PAGE>
RETURN OF EMPLOYER'S PROPERTY
7.02 On the termination of employment or whenever requested by the
Employer, the Employee shall immediately deliver to the Employer all property in
the Employee's possession or under the Employee's control belonging to the
Employer, including, but not limited to all marketing records, agents records,
accounting records, computer terminals and tapes, accounting machines, and all
office furniture and fixtures, supplies, and other personal property placed in
the office of the Employer at 777 Main Street, Fort Worth, Texas 76102, in good
condition, ordinary wear and tear excepted.
ARTICLE 8
OBLIGATIONS OF EMPLOYER
INDEMNIFICATION OF LOSSES OF EMPLOYEE
8.01 The Employer shall indemnify the Employee for all losses sustained by
the Employee as a direct result of the discharge of his duties required by this
Agreement.
WORKING CONDITIONS
8.02 The Employer will provide the Employee with a private office,
secretarial and stenographic services, and any other facilities and services as
are suitable to the Employee's position or required for the performance of his
duties.
ARTICLE 9
TERMINATION
TERMINATION BY EITHER PARTY
9.01 This Agreement may be terminated by either party by giving seven (7)
days' written notice of termination to the other party. Such termination shall
not prejudice any remedy that the terminating party may have at law or in equity
under this Agreement.
EFFECT OF TERMINATION ON COMPENSATION
9.02 In the event of termination of this Agreement by the Employer prior to
the completion of the term of employment specified in Article 1 for any reason
except gross negligence, fraud, theft, or actual and intentional dishonesty
perpetrated by the Employee upon the Employer, the Employee shall be entitled to
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 4
<PAGE>
compensation earned but not paid to the Employee prior to the date of
termination as provided in this Agreement, computed pro rata up to and including
that date. In addition, provided such termination is for any reason except gross
negligence, fraud, theft, or actual and intentional dishonesty perpetrated by
the Employee upon the Employer, the Employee shall be entitled to the following
lump sum severance payment:
(a) A lump sum payment payable on the effective date of such
termination in the amount of the sum of the total
compensation paid in the preceding year (salary and cash
bonuses); and
(b) Provided the difference between the market value on the
date of such termination of the stock of Employer and the
purchase price of any exercised and unexercised stock
options owned by the Employee ("Potential Employee Stock
Profit") plus the lump sum payment payable under paragraph
9.02(a) above is less than $400,000, then, and in that
event, an additional lump sum payment will be paid by the
Employer to the Employee on the effective date of such
termination. The amount of such additional lump sum payment
under this paragraph will be the amount of $400,000 minus
both the Potential Employee Stock Profit and the lump sum
payment payable under paragraph 9.02(a) above.
9.03 In the event of termination of this Agreement by the Employee prior to
the completion of the term of employment specified in Article 1, the Employee
shall be entitled to the compensation earned but not paid to the Employee
(salary and cash bonuses) prior to the date of termination as provided in this
Agreement, computed pro rata up to and including that date. The Employee shall
be entitled to no further compensation after the date of such termination.
Provided, however, if the Employee terminates this Agreement prior to the
completion of the term of employment specified in Article 1 and within six (6)
months after the termination or resignation of either Martin Kantor or James
Thigpen from their current respective corporate offices of Employer, then, and
in that event, Employee shall be entitled to all of the compensation set forth
in paragraph 9.02.
EFFECT OF CONTINUATION OF EMPLOYMENT BEYOND TERM
9.04 In the event the Employee continues in the employ of the Employer
beyond the term of this Agreement as set forth in Article 1, such continuation
of employment shall be deemed an extension of this Agreement for a term of
twelve (12) months only. During the term of this extension, all terms and
conditions of this Agreement shall remain in full force and effect.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 5
<PAGE>
ARTICLE 10
GENERAL PROVISIONS
NOTICES
10.01 All notices or other communications required under this Agreement may
be effected either by personal delivery in writing or by certified mail, return
receipt requested. Notice shall be deemed to have been given when delivered or
mailed to the parties at their respective addresses as set forth above or when
mailed to the last address provided in writing to the other party by the
addressee.
ENTIRETY OF AGREEMENT
10.02 This Agreement supersedes all other agreements, either oral or in
writing, between the parties to this Agreement, with respect to the employment
of the Employee by the Employer. This Agreement contains the entire
understanding of the parties and all of the covenants and agreements between the
parties with respect to such employment.
EXECUTED at Fort Worth, Texas on January _____, 1996.
EMPLOYER
Westbridge Capital Corp.
By: ______________________________
James W. Thigpen, President
EMPLOYEE
-----------------------------------
Stephen D. Davidson
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 6
<PAGE>
Exhibit 10.4
WESTBRIDGE CAPTIAL CORP.
EMPLOYMENT CONTRACT OF MARGIE MEGLESS
By this Agreement, Westbridge Capital Corp., referred to in this Agreement
as Employer, located at 777 Main Street, Fort Worth, Texas 76102, employs Margie
Megless, referred to in this Agreement as Employee, of Fort Worth, Texas, who
accepts employment of the following terms and conditions:
ARTICLE 1
TERM OF EMPLOYMENT
1.01 By this Agreement, the Employer employs the Employee, and the Employee
accepts employment with the Employer, for an indefinite term.
ARTICLE 2
COMPENSATION
BASIC COMPENSATION
2.01 As compensation for all services rendered under this Agreement, the
Employee shall be paid by the Employer a salary to be determined year to year by
the Employer which shall be payable in equal semi-monthly installments on the
first and fifteenth days of each month during the period of employment. The
amount paid is to be prorated for any partial employment period.
ARTICLE 3
DUTIES OF EMPLOYEE
3.01 The Employee is employed as Vice President and shall work at the
office of Employer located at 777 Main Street, Fort Worth, Texas 76102. The
Employee shall perform all duties commonly discharged by company vice
presidents. Additionally, the Employee is required to perform other duties of a
similar nature as may be required from time to time by the Employer.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 1
<PAGE>
3.02 The Employee shall devote her entire productive time, ability,
attention, and energies to the business of the Employer during the term of this
Agreement. During such time, the Employee shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether or not for compensation, without the prior
written consent of the Employer.
ARTICLE 4
EMPLOYEE'S OBLIGATIONS OTHER THAN TO
PERFORM SERVICES
NON-COMPETITION BY EMPLOYEE
4.01 During the term of this Agreement, the Employee shall not, directly or
indirectly, either as an employee, employer, consultant, insurance agent,
marketer, general agent, principal, partner, stockholder, corporate officer,
director, manager of a limited liability company, or in any other individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the business of Employer, or any of
its subsidiaries.
ARTICLE 5
EMPLOYEE BENEFITS AND BONUSES
BENEFITS
5.01 The Employer agrees to include the Employee as a participant and/or
recipient of all employment benefits provided to the senior officers of the
Employer.
BONUSES
5.02 In addition to the Employee's salary provided in paragraph 2.01 of
this Agreement, the Employer may, in its sole discretion choose to pay the
Employee a cash bonus at the end of each calendar year during the term of this
Agreement. Upon termination of employment, the Employee shall not be entitled to
any portion of the bonus for the employment year of termination.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 2
<PAGE>
ARTICLE 6
REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE
BUSINESS EXPENSES
6.01 The Employee is authorized to incur reasonable business expenses for
promoting the business of the Employer, including expenditures for
entertainment, gifts, and travel. The Employer will reimburse the Employee for
all such expenses upon the Employee's presentation and itemized account of such
expenditures.
ARTICLE 7
PROPERTY RIGHTS OF PARTIES
TRADE SECRETS
7.01 During the term of employment, the Employee will have access to and
become familiar with various trade secrets, consisting of formulas, devices,
secret inventions, processes, and compilations of information, records,
specifications, actuarial data, marketing strategies, marketing organization
formations, and marketing organization compensation formulas, owned by the
Employer, and/or any of its subsidiaries, and regularly used in the operation of
the business of the Employer, and/or any of its subsidiaries. The Employee shall
not disclose any such trade secrets, directly or indirectly, nor use them in any
way, either during the term of this Agreement or at any time thereafter, except
as required in the course of her employment. All files, records, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Employer, and/or any of its subsidiaries, whether or not prepared by the
Employee, shall remain the exclusive property of the Employer and shall not be
removed from the premises of the Employer, and/or any of its subsidiaries, under
any circumstances without the prior written consent of the Employer.
RETURN OF EMPLOYER'S PROPERTY
7.02 On the termination of employment or whenever requested by the
Employer, the Employee shall immediately deliver to the Employer all property in
the Employee's possession or under the Employee's control belonging to the
Employer, including, but not limited to all marketing records, agents records,
accounting records, computer terminals and tapes, accounting machines, and all
office furniture and fixtures, supplies, and other personal property placed in
the office of the Employer at 777 Main Street, Fort Worth, Texas 76102, in good
condition, ordinary wear and tear excepted.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 3
<PAGE>
ARTICLE 8
OBLIGATIONS OF EMPLOYER
INDEMNIFICATION OF LOSSES OF EMPLOYEE
8.01 The Employer shall indemnify the Employee for all losses sustained by
the Employee as a direct result of the discharge of her duties required by this
Agreement.
WORKING CONDITIONS
8.02 The Employer will provide the Employee with a private office,
secretarial and stenographic services, and any other facilities and services as
are suitable to the Employee's position or required for the performance of her
duties.
ARTICLE 9
TERMINATION
TERMINATION BY EITHER PARTY
9.01 This Agreement may be terminated, with or without cause, by either
party by giving seven (7) days' written notice of termination to the other
party. Such termination shall not prejudice any remedy that the terminating
party may have at law or in equity under this Agreement.
EFFECT OF TERMINATION ON COMPENSATION
9.02 In the event of termination of this Agreement by the Employer for any
reason except gross negligence, fraud, theft, or actual and intentional
dishonesty perpetrated by the Employee upon the Employer, the Employee shall be
entitled to compensation earned but not paid to the Employee prior to the date
of termination as provided in this Agreement, computed pro rata up to and
including that date. In addition, provided such termination is for any reason
except gross negligence, fraud, theft, or actual and intentional dishonesty
perpetrated by the Employee upon the Employer, the Employee shall be entitled to
the following severance payment:
The sum of the Employee's salary (excluding any bonus paid)
in the preceding calendar year payable in equal semi-monthly
installments on the first and fifteenth days of each month
following the month of such termination.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 4
<PAGE>
9.03 In the event of termination of this Agreement by the Employee, the
Employee shall be entitled to the salary earned but not paid to the Employee
prior to the date of termination as provided in this Agreement, computed pro
rata up to and including that date. The Employee shall be entitled to no further
compensation after the date of such termination.
ARTICLE 10
GENERAL PROVISIONS
NOTICES
10.01 All notices or other communications required under this Agreement may
be effected either by personal delivery in writing or by certified mail, return
receipt requested. Notice shall be deemed to have been given when delivered or
mailed to the parties at their respective addresses as set forth above or when
mailed to the last address provided in writing to the other party by the
addressee.
ENTIRETY OF AGREEMENT
10.02 This Agreement supersedes all other agreements, either oral or in
writing, between the parties to this Agreement, with respect to the employment
of the Employee by the Employer. This Agreement contains the entire
understanding of the parties and all of the covenants and agreements between the
parties with respect to such employment.
EXECUTED at Fort Worth, Texas on ___________________, 1996.
EMPLOYER
Westbridge Capital Corp.
By: ______________________________
James W. Thigpen, President
EMPLOYEE
-----------------------------------
Margie Megless
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 5
<PAGE>
Exhibit 10.5
WESTBRIDGE CAPITAL CORP.
EMPLOYMENT CONTRACT OF MICHAEL NORRIS
By this Agreement, Westbridge Capital Corp., referred to in this Agreement
as Employer, located at 777 Main Street, Fort Worth, Texas 76102, employs
Michael Norris, referred to in this Agreement as Employee, of Fort Worth, Texas,
who accepts employment of the following terms and conditions:
ARTICLE 1
TERM OF EMPLOYMENT
1.01 By this Agreement, the Employer employs the Employee, and the Employee
accepts employment with the Employer, for an indefinite term.
ARTICLE 2
COMPENSATION
BASIC COMPENSATION
2.01 As compensation for all services rendered under this Agreement, the
Employee shall be paid by the Employer a salary to be determined year to year by
the Employer which shall be payable in equal semi-monthly installments on the
first and fifteenth days of each month during the period of employment. The
amount paid is to be prorated for any partial employment period.
ARTICLE 3
DUTIES OF EMPLOYEE
3.01 The Employee is employed as Vice President and shall work at the
office of Employer located at 777 Main Street, Fort Worth, Texas 76102. The
Employee shall perform all duties commonly discharged by company senior vice
presidents. Additionally, the Employee is required to perform other duties of a
similar nature as may be required from time to time by the Employer.
3.02 The Employee shall devote his entire productive time, ability,
attention, and energies to the business of the Employer during the term of this
Agreement. During such time, the Employee shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether or not for compensation, without the prior
written consent of the Employer.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 1
<PAGE>
ARTICLE 4
EMPLOYEE'S OBLIGATIONS OTHER THAN TO
PERFORM SERVICES
NON-COMPETITION BY EMPLOYEE
4.01 During the term of this Agreement, the Employee shall not, directly or
indirectly, either as an employee, employer, consultant, insurance agent,
marketer, general agent, principal, partner, stockholder, corporate officer,
director, manager of a limited liability company, or in any other individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the business of Employer, or any of
its subsidiaries.
ARTICLE 5
EMPLOYEE BENEFITS AND BONUSES
BENEFITS
5.01 The Employer agrees to include the Employee as a participant and/or
recipient of all employment benefits provided to the senior officers of the
Employer.
BONUSES
5.02 In addition to the Employee's salary provided in paragraph 2.01 of
this Agreement, the Employer may, in its sole discretion choose to pay the
Employee a cash bonus at the end of each calendar year during the term of this
Agreement. Upon termination of employment, the Employee shall not be entitled to
any portion of the bonus for the employment year of termination.
ARTICLE 6
REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE
BUSINESS EXPENSES
6.01 The Employee is authorized to incur reasonable business expenses for
promoting the business of the Employer, including expenditures for
entertainment, gifts, and travel. The Employer will reimburse the Employee for
all such expenses upon the Employee's presentation and itemized account of such
expenditures.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 2
<PAGE>
ARTICLE 7
PROPERTY RIGHTS OF PARTIES
TRADE SECRETS
7.01 During the term of employment, the Employee will have access to and
become familiar with various trade secrets, consisting of formulas, devices,
secret inventions, processes, and compilations of information, records,
specifications, actuarial data, marketing strategies, marketing organization
formations, and marketing organization compensation formulas, owned by the
Employer, and/or any of its subsidiaries, and regularly used in the operation of
the business of the Employer, and/or any of its subsidiaries. The Employee shall
not disclose any such trade secrets, directly or indirectly, nor use them in any
way, either during the term of this Agreement or at any time thereafter, except
as required in the course of his employment. All files, records, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Employer, and/or any of its subsidiaries, whether or not prepared by the
Employee, shall remain the exclusive property of the Employer and shall not be
removed from the premises of the Employer, and/or any of its subsidiaries, under
any circumstances without the prior written consent of the Employer.
RETURN OF EMPLOYER'S PROPERTY
7.02 On the termination of employment or whenever requested by the
Employer, the Employee shall immediately deliver to the Employer all property in
the Employee's possession or under the Employee's control belonging to the
Employer, including, but not limited to all marketing records, agents records,
accounting records, computer terminals and tapes, accounting machines, and all
office furniture and fixtures, supplies, and other personal property placed in
the office of the Employer at 777 Main Street, Fort Worth, Texas 76102, in good
condition, ordinary wear and tear excepted.
ARTICLE 8
OBLIGATIONS OF EMPLOYER
INDEMNIFICATION OF LOSSES OF EMPLOYEE
8.01 The Employer shall indemnify the Employee for all losses sustained by
the Employee as a direct result of the discharge of his duties required by this
Agreement.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 3
<PAGE>
WORKING CONDITIONS
8.02 The Employer will provide the Employee with a private office,
secretarial and stenographic services, and any other facilities and services as
are suitable to the Employee's position or required for the performance of his
duties.
ARTICLE 9
TERMINATION
TERMINATION BY EITHER PARTY
9.01 This Agreement may be terminated, with or without cause, by either
party by giving seven (7) days' written notice of termination to the other
party. Such termination shall not prejudice any remedy that the terminating
party may have at law or in equity under this Agreement.
EFFECT OF TERMINATION ON COMPENSATION
9.02 In the event of termination of this Agreement by the Employer for any
reason except gross negligence, fraud, theft, or actual and intentional
dishonesty perpetrated by the Employee upon the Employer, the Employee shall be
entitled to compensation earned but not paid to the Employee prior to the date
of termination as provided in this Agreement, computed pro rata up to and
including that date. In addition, provided such termination is for any reason
except gross negligence, fraud, theft, or actual and intentional dishonesty
perpetrated by the Employee upon the Employer, the Employee shall be entitled to
the following severance payment:
The sum of the Employee's salary (excluding any bonus paid) in
the preceding calendar year payable in equal semi-monthly
installments on the first and fifteenth days of each month
following the month of such termination.
9.03 In the event of termination of this Agreement by the Employee, the
Employee shall be entitled to the salary earned but not paid to the Employee
prior to the date of termination as provided in this Agreement, computed pro
rata up to and including that date. The Employee shall be entitled to no further
compensation after the date of such termination.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 4
<PAGE>
ARTICLE 10
GENERAL PROVISIONS
NOTICES
10.01 All notices or other communications required under this Agreement may
be effected either by personal delivery in writing or by certified mail, return
receipt requested. Notice shall be deemed to have been given when delivered or
mailed to the parties at their respective addresses as set forth above or when
mailed to the last address provided in writing to the other party by the
addressee.
ENTIRETY OF AGREEMENT
10.02 This Agreement supersedes all other agreements, either oral or in
writing, between the parties to this Agreement, with respect to the employment
of the Employee by the Employer. This Agreement contains the entire
understanding of the parties and all of the covenants and agreements between the
parties with respect to such employment.
EXECUTED at Fort Worth, Texas on ____________________, 1996.
EMPLOYER
Westbridge Capital Corp.
By: ______________________________
James W. Thigpen, President
EMPLOYEE
-----------------------------------
Michael Norris
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 5
<PAGE>
Exhibit 10.6
WESTBRIDGE CAPITAL CORP.
EMPLOYMENT CONTRACT OF PATRICK MITCHELL
By this Agreement, Westbridge Capital Corp., referred to in this Agreement
as Employer, located at 777 Main Street, Fort Worth, Texas 76102, employs
Patrick Mitchell, referred to in this Agreement as Employee, of Fort Worth,
Texas, who accepts employment of the following terms and conditions:
ARTICLE 1
TERM OF EMPLOYMENT
1.01 By this Agreement, the Employer employs the Employee, and the Employee
accepts employment with the Employer, for an indefinite term.
ARTICLE 2
COMPENSATION
BASIC COMPENSATION
2.01 As compensation for all services rendered under this Agreement, the
Employee shall be paid by the Employer a salary to be determined year to year by
the Employer which shall be payable in equal semi-monthly installments on the
first and fifteenth days of each month during the period of employment. The
amount paid is to be prorated for any partial employment period.
ARTICLE 3
DUTIES OF EMPLOYEE
3.01 The Employee is employed as Chief Financial Officer, Vice President,
and Treasurer and shall work at the office of Employer located at 777 Main
Street, Fort Worth, Texas 76102. The Employee shall perform all duties commonly
discharged by company chief financial officers, vice presidents, and treasurers.
Additionally, the Employee is required to perform other duties of a similar
nature as may be required from time to time by the Employer.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 1
<PAGE>
3.02 The Employee shall devote his entire productive time, ability,
attention, and energies to the business of the Employer during the term of this
Agreement. During such time, the Employee shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether or not for compensation, without the prior
written consent of the Employer.
ARTICLE 4
EMPLOYEE'S OBLIGATIONS OTHER THAN TO
PERFORM SERVICES
NON-COMPETITION BY EMPLOYEE
4.01 During the term of this Agreement, the Employee shall not, directly or
indirectly, either as an employee, employer, consultant, insurance agent,
marketer, general agent, principal, partner, stockholder, corporate officer,
director, manager of a limited liability company, or in any other individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the business of Employer, or any of
its subsidiaries.
ARTICLE 5
EMPLOYEE BENEFITS AND BONUSES
BENEFITS
5.01 The Employer agrees to include the Employee as a participant and/or
recipient of all employment benefits provided to the senior officers of the
Employer.
BONUSES
5.02 In addition to the Employee's salary provided in paragraph 2.01 of
this Agreement, the Employer may, in its sole discretion choose to pay the
Employee a cash bonus at the end of each calendar year during the term of this
Agreement. Upon termination of employment, the Employee shall not be entitled to
any portion of the bonus for the employment year of termination.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 2
<PAGE>
ARTICLE 6
REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE
BUSINESS EXPENSES
6.01 The Employee is authorized to incur reasonable business expenses for
promoting the business of the Employer, including expenditures for
entertainment, gifts, and travel. The Employer will reimburse the Employee for
all such expenses upon the Employee's presentation and itemized account of such
expenditures.
ARTICLE 7
PROPERTY RIGHTS OF PARTIES
TRADE SECRETS
7.01 During the term of employment, the Employee will have access to and
become familiar with various trade secrets, consisting of formulas, devices,
secret inventions, processes, and compilations of information, records,
specifications, actuarial data, marketing strategies, marketing organization
formations, and marketing organization compensation formulas, owned by the
Employer, and/or any of its subsidiaries, and regularly used in the operation of
the business of the Employer, and/or any of its subsidiaries. The Employee shall
not disclose any such trade secrets, directly or indirectly, nor use them in any
way, either during the term of this Agreement or at any time thereafter, except
as required in the course of his employment. All files, records, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Employer, and/or any of its subsidiaries, whether or not prepared by the
Employee, shall remain the exclusive property of the Employer and shall not be
removed from the premises of the Employer, and/or any of its subsidiaries, under
any circumstances without the prior written consent of the Employer.
RETURN OF EMPLOYER'S PROPERTY
7.02 On the termination of employment or whenever requested by the
Employer, the Employee shall immediately deliver to the Employer all property in
the Employee's possession or under the Employee's control belonging to the
Employer, including, but not limited to all marketing records, agents records,
accounting records, computer terminals and tapes, accounting machines, and all
office furniture and fixtures, supplies, and other personal property placed in
the office of the Employer at 777 Main Street, Fort Worth, Texas 76102, in good
condition, ordinary wear and tear excepted.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 3
<PAGE>
ARTICLE 8
OBLIGATIONS OF EMPLOYER
INDEMNIFICATION OF LOSSES OF EMPLOYEE
8.01 The Employer shall indemnify the Employee for all losses sustained by
the Employee as a direct result of the discharge of his duties required by this
Agreement.
WORKING CONDITIONS
8.02 The Employer will provide the Employee with a private office,
secretarial and stenographic services, and any other facilities and services as
are suitable to the Employee's position or required for the performance of his
duties.
ARTICLE 9
TERMINATION
TERMINATION BY EITHER PARTY
9.01 This Agreement may be terminated, with or without cause, by either
party by giving seven (7) days' written notice of termination to the other
party. Such termination shall not prejudice any remedy that the terminating
party may have at law or in equity under this Agreement.
EFFECT OF TERMINATION ON COMPENSATION
9.02 In the event of termination of this Agreement by the Employer for any
reason except gross negligence, fraud, theft, or actual and intentional
dishonesty perpetrated by the Employee upon the Employer, the Employee shall be
entitled to compensation earned but not paid to the Employee prior to the date
of termination as provided in this Agreement, computed pro rata up to and
including that date. In addition, provided such termination is for any reason
except gross negligence, fraud, theft, or actual and intentional dishonesty
perpetrated by the Employee upon the Employer, the Employee shall be entitled to
the following severance payment:
The sum of the Employee's salary (excluding any bonus paid) in
the preceding calendar year payable in equal semi-monthly
installments on the first and fifteenth days of each month
following the month of such termination.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 4
<PAGE>
9.03 In the event of termination of this Agreement by the Employee, the
Employee shall be entitled to the salary earned but not paid to the Employee
prior to the date of termination as provided in this Agreement, computed pro
rata up to and including that date. The Employee shall be entitled to no further
compensation after the date of such termination.
ARTICLE 10
GENERAL PROVISIONS
NOTICES
10.01 All notices or other communications required under this Agreement may
be effected either by personal delivery in writing or by certified mail, return
receipt requested. Notice shall be deemed to have been given when delivered or
mailed to the parties at their respective addresses as set forth above or when
mailed to the last address provided in writing to the other party by the
addressee.
ENTIRETY OF AGREEMENT
10.02 This Agreement supersedes all other agreements, either oral or in
writing, between the parties to this Agreement, with respect to the employment
of the Employee by the Employer. This Agreement contains the entire
understanding of the parties and all of the covenants and agreements between the
parties with respect to such employment.
EXECUTED at Fort Worth, Texas on _____________________, 1996.
EMPLOYER
Westbridge Capital Corp.
By: ______________________________
James W. Thigpen, President
EMPLOYEE
-----------------------------------
Patrick Mitchell
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 5
<PAGE>
Exhibit 10.7
WESTBRIDGE CAPITAL CORP.
EMPLOYMENT CONTRACT OF DENNIS WEVERKA
By this Agreement, Westbridge Capital Corp., referred to in this Agreement
as Employer, located at 777 Main Street, Fort Worth, Texas 76102, employs Dennis
Weverka, referred to in this Agreement as Employee, of Fort Worth, Texas, who
accepts employment of the following terms and conditions:
ARTICLE 1
TERM OF EMPLOYMENT
1.01 By this Agreement, the Employer employs the Employee, and the Employee
accepts employment with the Employer, for an indefinite term.
ARTICLE 2
COMPENSATION
BASIC COMPENSATION
2.01 As compensation for all services rendered under this Agreement, the
Employee shall be paid by the Employer a salary to be determined year to year by
the Employer which shall be payable in equal semi-monthly installments on the
first and fifteenth days of each month during the period of employment. The
amount paid is to be prorated for any partial employment period.
ARTICLE 3
DUTIES OF EMPLOYEE
3.01 The Employee is employed as Vice President and shall work at the
office of Employer located at 777 Main Street, Fort Worth, Texas 76102. The
Employee shall perform all duties commonly discharged by company vice
presidents. Additionally, the Employee is required to perform other duties of a
similar nature as may be required from time to time by the Employer.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 1
<PAGE>
3.02 The Employee shall devote his entire productive time, ability,
attention, and energies to the business of the Employer during the term of this
Agreement. During such time, the Employee shall not directly or indirectly
render any services of a business, commercial, or professional nature to any
other person or organization, whether or not for compensation, without the prior
written consent of the Employer.
ARTICLE 4
EMPLOYEE'S OBLIGATIONS OTHER THAN TO
PERFORM SERVICES
NON-COMPETITION BY EMPLOYEE
4.01 During the term of this Agreement, the Employee shall not, directly or
indirectly, either as an employee, employer, consultant, insurance agent,
marketer, general agent, principal, partner, stockholder, corporate officer,
director, manager of a limited liability company, or in any other individual or
representative capacity, engage or participate in any business that is in
competition, in any manner whatsoever, with the business of Employer, or any of
its subsidiaries.
ARTICLE 5
EMPLOYEE BENEFITS AND BONUSES
BENEFITS
5.01 The Employer agrees to include the Employee as a participant and/or
recipient of all employment benefits provided to the senior officers of the
Employer.
BONUSES
5.02 In addition to the Employee's salary provided in paragraph 2.01 of
this Agreement, the Employer may, in its sole discretion choose to pay the
Employee a cash bonus at the end of each calendar year during the term of this
Agreement. Upon termination of employment, the Employee shall not be entitled to
any portion of the bonus for the employment year of termination.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 2
<PAGE>
ARTICLE 6
REIMBURSEMENT OF EXPENSES INCURRED BY EMPLOYEE
BUSINESS EXPENSES
6.01 The Employee is authorized to incur reasonable business expenses for
promoting the business of the Employer, including expenditures for
entertainment, gifts, and travel. The Employer will reimburse the Employee for
all such expenses upon the Employee's presentation and itemized account of such
expenditures.
ARTICLE 7
PROPERTY RIGHTS OF PARTIES
TRADE SECRETS
7.01 During the term of employment, the Employee will have access to and
become familiar with various trade secrets, consisting of formulas, devices,
secret inventions, processes, and compilations of information, records,
specifications, actuarial data, marketing strategies, marketing organization
formations, and marketing organization compensation formulas, owned by the
Employer, and/or any of its subsidiaries, and regularly used in the operation of
the business of the Employer, and/or any of its subsidiaries. The Employee shall
not disclose any such trade secrets, directly or indirectly, nor use them in any
way, either during the term of this Agreement or at any time thereafter, except
as required in the course of his employment. All files, records, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Employer, and/or any of its subsidiaries, whether or not prepared by the
Employee, shall remain the exclusive property of the Employer and shall not be
removed from the premises of the Employer, and/or any of its subsidiaries, under
any circumstances without the prior written consent of the Employer.
RETURN OF EMPLOYER'S PROPERTY
7.02 On the termination of employment or whenever requested by the
Employer, the Employee shall immediately deliver to the Employer all property in
the Employee's possession or under the Employee's control belonging to the
Employer, including, but not limited to all marketing records, agents records,
accounting records, computer terminals and tapes, accounting machines, and all
office furniture and fixtures, supplies, and other personal property placed in
the office of the Employer at 777 Main Street, Fort Worth, Texas 76102, in good
condition, ordinary wear and tear excepted.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 3
<PAGE>
ARTICLE 8
OBLIGATIONS OF EMPLOYER
INDEMNIFICATION OF LOSSES OF EMPLOYEE
8.01 The Employer shall indemnify the Employee for all losses sustained by
the Employee as a direct result of the discharge of his duties required by this
Agreement.
WORKING CONDITIONS
8.02 The Employer will provide the Employee with a private office,
secretarial and stenographic services, and any other facilities and services as
are suitable to the Employee's position or required for the performance of his
duties.
ARTICLE 9
TERMINATION
TERMINATION BY EITHER PARTY
9.01 This Agreement may be terminated, with or without cause, by either
party by giving seven (7) days' written notice of termination to the other
party. Such termination shall not prejudice any remedy that the terminating
party may have at law or in equity under this Agreement.
EFFECT OF TERMINATION ON COMPENSATION
9.02 In the event of termination of this Agreement by the Employer for any
reason except gross negligence, fraud, theft, or actual and intentional
dishonesty perpetrated by the Employee upon the Employer, the Employee shall be
entitled to compensation earned but not paid to the Employee prior to the date
of termination as provided in this Agreement, computed pro rata up to and
including that date. In addition, provided such termination is for any reason
except gross negligence, fraud, theft, or actual and intentional dishonesty
perpetrated by the Employee upon the Employer, the Employee shall be entitled to
the following severance payment:
The sum of the Employee's salary (excluding any bonus paid) in
the preceding calendar year payable in equal semi-monthly
installments on the first and fifteenth days of each month
following the month of such termination.
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 4
<PAGE>
9.03 In the event of termination of this Agreement by the Employee, the
Employee shall be entitled to the salary earned but not paid to the Employee
prior to the date of termination as provided in this Agreement, computed pro
rata up to and including that date. The Employee shall be entitled to no further
compensation after the date of such termination.
ARTICLE 10
GENERAL PROVISIONS
NOTICES
10.01 All notices or other communications required under this Agreement may
be effected either by personal delivery in writing or by certified mail, return
receipt requested. Notice shall be deemed to have been given when delivered or
mailed to the parties at their respective addresses as set forth above or when
mailed to the last address provided in writing to the other party by the
addressee.
ENTIRETY OF AGREEMENT
10.02 This Agreement supersedes all other agreements, either oral or in
writing, between the parties to this Agreement, with respect to the employment
of the Employee by the Employer. This Agreement contains the entire
understanding of the parties and all of the covenants and agreements between the
parties with respect to such employment.
EXECUTED at Fort Worth, Texas on ___________________, 1996.
EMPLOYER
Westbridge Capital Corp.
By: ______________________________
James W. Thigpen, President
EMPLOYEE
-----------------------------------
Dennis Weverka
- -----------------------------------------------------------------
EMPLOYMENT CONTRACT - PAGE 5
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<CIK> 0000703701
<NAME> WESTBRIDGE CAPITAL CORP
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<DEBT-HELD-FOR-SALE> 81975
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 506
<MORTGAGE> 625
<REAL-ESTATE> 141
<TOTAL-INVEST> 104466
<CASH> 1534
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 63373
<TOTAL-ASSETS> 207078
<POLICY-LOSSES> 87569
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 380
<NOTES-PAYABLE> 37329
20000
0
<COMMON> 599
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 207078
35410
<INVESTMENT-INCOME> 2116
<INVESTMENT-GAINS> 85
<OTHER-INCOME> 1777
<BENEFITS> 21914
<UNDERWRITING-AMORTIZATION> 4329
<UNDERWRITING-OTHER> 6566
<INCOME-PRETAX> 2348
<INCOME-TAX> 822
<INCOME-CONTINUING> 1573
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1160
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
