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HomeMy WebLinkAbout04-5829 ~, AMERICAN INSURANCE ADMINISTRATORS, INC., Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. : CIVIL ACTION BRUCE CANNON, Defendant : NO. 2004--- 51 J-q ~ NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. COURT ADMINISTRATOR Cumberland County Courthouse 1 Courthouse Square - 4th Floor Carlisle, PA 17013 (717) 240-6200 NOTICIA Le han demand ado a usted en la corte. Si usted qui ere defenderse de estas demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notificacion. Usted debe presentar una apariencia escrita 0 en persona 0 por abogado y archivar en la corte en forma escrita sus defensas 0 sus objeciones alas demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo aviso notificacion y por cualquier queja 0 alivio que es pedido en la peticion de demanda. Usted puede perder dinero 0 sus propiedades 0 otros derechos importantes para usted. LLEVE EST A DEMANDA A UN ABODAGO IMMEDIAT AMENTE. SI NO TIENE ABOGADO 0 SI NO TIENE EL DINERO SOFICIENTE DE P AGAR TAL SERVICIO, V A Y A EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA CUY A DIRECCION SE ENCUENTRA ESCRIT A ABAJO PARA A VERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. COURT ADMINISTRATOR Cumberland County Courthouse 1 Courthouse Square - 4th Floor Carlisle, P A 17013 (717) 240-6200 McNEES WALLACE & NURICK LLC By o.t~!<... (!J trt-r'-~ /t Alan R. Boynton, Jr. Attorney J.D. No. 39850 100 Pine Street Harrisburg, P A 17108-1166 (717) 232-8000 Attorneys for Plaintiff Dated: November 18, 2004 , ' AMERICAN INSURANCE ADMINISTRATORS, INC., Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - UQUITY BRUCE CANNON, Defendant : NO. 2004 _ :)-i.J. q ~ COMPLAINT I. PARTIES 1. Plaintiff American Insurance Administrators, Inc. ("AlA"), is a Pennsylvania corporation having its principal place of business at 4550 Lena Road, Mechanicsburg, Cumberland County, Pennsylvania. 2. Defendant Bruce Cannon is an adult individual currently residing in Lancaster County, Pennsylvania. 3. Until recently, Defendant was employed by Plaintiff and worked out of Plaintiffs principal place of business in Cumberland County. 4. Defendant is currently employed by Waypoint Insurance Group ("Waypoint"), which is a subsidiary or affiliated with Waypoint Bank. 5. Defendant currently works out ofWaypoint's Cumberland County office, which is located within several hundred yards of Plaintiffs principal place of business. 6. Defendant has at all times relevant to this action actively engaged in business within Cumberland County and the conduct giving rise to this action occurred in Cumberland County. II. FACTUAL AVERMENTS 7. Defendant was hired by AlA on September 21, 1999 as Director of Marketing and later promoted to Senior Account Executive and Senior Consultant. 8. Upon being offered employment, Defendant was informed that he would be required to execute an employment agreement, which would include a non-competition provision. 9. Defendant agreed to execute such an agreement. 10. On September 21, 1999, Defendant executed an Employment Agreement ("Agreement"), a true and correct copy of which is attached hereto as Exhibit "A." 11. Pursuant to the terms of the Agreement, Defendant agreed, inter alia, as follows: 5. Proprietary Nature of Business. (a) The Employee acknowledges that the Company has a valuable property interest in all aspects of its business relationships with its clients, insurers, and all other persons who perform services for said clients and said insurers. Further, the Employee acknowledges that in the course of his employment with the Company, he will become aware of and familiar with secret or confidential information of the Company relating to its customers, its internal business operations and the sources with which insurance is placed (including secret and confidential information of the Company's affiliates and subsidiaries), including but not limited to, lists of agents, brokers, policyholders, expiration and renewal dates, inspection and credit reports, other insurance data on various risks written by the Company, (or its affiliates and subsidiaries), the procedures, forms, techniques used in servicing accounts and other documents and information which is required to be maintained in confidence for the continued success of the Company and its business, all of which secret or confidential information is acknowledged by the Employee to be the sole and exclusive property of the Company, its affiliates and subsidiaries. In view of the foregoing, the Employee expressly agrees and acknowledges that the covenants contained in this Paragraph 5 and in Paragraph 6 hereof are reasonable and necessary. * * * (e) The Employee agrees that he will not, without the written consent of the Company, during the term of this agreement or thereafter, 2 disclose or make any use of such confidential information except as may be required in the course of his employment hereunder. (f) On termination of employment, the Employee shall surrender to the Company all records and all copies made of those records that pertain to any aspect of the business ofthe Company, with its clients and their respective insurers, including but not limited to active clients coverage, expiration of coverage, premiums and compilations of same. (g) The Employee agrees that he will not entice or induce, directly or indirectly, any other employee ofthe Company to leave the employ of the Company either during his Period of Employment or during the period of his covenant not to compete set forth in Section 6 hereof. 6. Agreement Not to Compete. (a) Upon termination of his employment for any reason, the Employee agrees that for a period ofthree (3) years following such termination, he will not, directly or indirectly, solicit, sell or accept insurance business from any person, partnership, or corporation or other entity who is then a client ofthe Company or who was a client of the Company during the Period of Employment (including any renewal term). If, during the said three (3) year period, any commission or any insurance business becomes payable to the Employee or to any person, firm, or corporation by whom the Employee is then employed or affiliated as a result of the Employee's violation of the first sentence of this paragraph, the Employee agrees to pay promptly to the Company an amount equal to 150% of such commission. (b) If, following termination of the Employee's employment hereunder, the Employee accepts other employment or enters into a business relationship with any person, partnership, corporation or other entity doing business ofthe kind then being performed by the Company, the Employee shall notify his new employer, person, partnership, corporation, or other entity he is now doing business with; of the conditions outlined in paragraphs 5 and 6 of this agreement. (c) It is expressly agreed upon that money damages will not be an adequate remedy for any breach ofthe covenants of the Employer set forth in Paragraphs 5 and 6 hereof; and in the event of any such breach, or threatened breach, the Company shall be entitled to secure an injunction requiring the Employee to abide by the commitments under such provisions of this agreement. 3 12. During his employment with Plaintiff, Defendant was given substantial management and client relationship responsibilities. 13. During his employment with Plaintiff, Defendant was considered a top management employee of Plaintiff and was part of the three-person management team. 14. Defendant had extensive access to substantially all of Plaintiffs trade secrets and confidential business information. 15. In carrying out his job responsibilities, Defendant obtained extensive knowledge and understanding of Plaintiffs proprietary analytical models, strategies, plans, proprietary procedures and processes, and know-how. This information is not generally available to Plaintiffs competitors. 16. As a reflection of his role in the company, Defendant's salary increased by 50% between his date of hire and his resignation from the company five years later. 17. On or about September 25, Defendant tendered his resignation, effective in thirty days. 18. Defendant's resignation came as a surprise as he was in good standing with the company and was considered a valuable member of the management team. 19. In tendering his resignation, Defendant informed Plaintiffs management and other employees that he would be taking a vice-president's position with Sovereign Bank in Lancaster and that he would be working there for accounts in Southeastern Pennsylvania. 20. Defendant informed Plaintiffthat he desired to work in Lancaster because of its proximity to his home. 21. Plaintiffs management accepted the representations of Defendant and requested that he remain through the thirty day notice period to better enable transition of his work. 4 DEFENDANT'S SOLICITATION OF PLAINTIFF'S EMPLOYEES 22. During the thirty day notice period, Defendant, unbeknownst to Plaintiff, solicited several employees ofPlaintiffto terminate their employment with Plaintiff and to seek employment with Waypoint. 23. In soliciting the employees to terminate their employment, Defendant stated to them that he was leaving because Plaintiff was in poor financial condition. 24. Defendant further informed several of Plaintiffs employees that his exodus would have a "domino effect," and would trigger mass departures. He urged the targeted employees to move quickly to depart. 25. Defendant further stated to the employees that: "I am aware of information that I cannot share with you that will cause the company to fold," that Plaintiff was having substantial financial problems, was failing and would be sold to another entity in the near future, and that Plaintiff was withholding information about the condition of the company from its employees. 26. Defendant's statements were false and knowingly false. Solicitation of Kathleen Witt 27. Defendant further told Kathleen Witt, a key employee of Plaintiff, that she was not treated well, that she deserved better and that she should seek employment with Defendant's new employer. 28. Defendant urged Ms. Witt to submit her resume to a particular employee at Waypoint, who would hire her. 29. On October 20,2004, Defendant specifically stated to Ms. Witt that he had "just gotten off the phone with [the Waypoint employee], and she is waiting for your resume." 5 30. As a result of the representations from Defendant about the dire financial condition of Plaintiff and its bleak outlook, Ms. Witt submitted a resume to Waypoint on October 29,2004. On the same day, she received a telephone call inviting her to an interview. 31. Ms. Witt interviewed with Waypoint at its Cumberland County office on November 1,2004. 32. During the course of her interview, Ms. Witt saw and spoke with Defendant. This was a surprise as Ms. Witt had been led by Defendant to believe that Defendant would be working in Lancaster, not Cumberland County. 33. Immediately following the interview on November 1,2004, Ms. Witt was offered a position with Waypoint. She was called that evening by Defendant to be congratulated and was advised by both Defendant and by the person interviewing her not to disclose to Plaintiff the identity of her new employer. 34. Ms. Witt initially accepted the position with Waypoint and on November 2,2004, tendered her resignation from Plaintiff. 35. Ms. Witt subsequently reconsidered and, on November 5,2004, withdrew her resignation. 36. That weekend, Defendant attempted on over a dozen instances (eight times at home and five on her cellular phone) to contact Ms. Witt to ensure her change of employment. 37. On November 7, 2004, Ms. Witt confirmed to Defendant that she would not be taking employment with Waypoint. Solicitation of Chervl Kemper 38. Cheryl Kemper was Defendant's Client Service Manager. 39. Ms. Kemper was hired by Plaintiff in 2001. 6 40. Prior to tendering his resignation to Plaintiff, Defendant informed Ms. Kemper that he would be working as a vice-president for Sovereign Bank in Lancaster. 41. On September 25, 2004, Defendant met with Ms. Kemper and informed her that he was leaving because Plaintiff had "reached its pinnacle" and would be declining in the future. 42. Defendant further informed Ms. Kemper that his departure would trigger a domino effect and that many other employees would follow. 43. Defendant further informed Ms. Kemper that he had knowledge of serious financial problems at AlA, but that he was not at liberty to disclose the information to her. This statement was false as Plaintiff was not suffering any financial problems and is quite profitable. 44. Defendant advised Ms. Kemper to look for employment elsewhere. 45. Subsequently, but before his departure from Plaintiff, Defendant informed Ms. Kemper that Ms. Witt had sought employment with Waypoint and urged her to do so as well. 46. Defendant further informed Ms. Kemper that Ms. Witt had been hired by Waypoint and that two other employees of Plaintiff had applied for positions at Waypoint. 47. Although Ms. Kemper did not desire employment elsewhere, the statements made by Defendant, who was a top executive at Plaintiff, caused her to seriously consider the necessity of seeking other employment. 48. Ms. Kemper submitted a resume to Waypoint and was interviewed twice by Waypoint. 49. Following the second interview, Defendant contacted Ms. Kemper and told her to expect an offer. 50. Shortly thereafter, Defendant contacted Ms. Kemper and informed her that Waypoint had a hiring freeze and that they could not hire her then. 7 51. Defendant stated to Ms. Kemper that, in spite of Waypoint's inability to hire her, "If! were you, I would look for ajob elsewhere." Solicitation of Tracv Clayton 52. Tracy Clayton is an account executive for Plaintiff. 53. Ms. Clayton is responsible for a substantial volume of Plaintiffs accounts. 54. Prior to tendering his resignation to Plaintiff, Defendant informed Ms. Clayton that AlA was in decline and that the business would eventually be sold. During his employment with Plaintiff, Defendant also expressed to Ms. Clayton that AlA made numerous poor business judgments and poor management decisions. Specifically, he expressed AlA should not be hiring new employees and that it should change its method of management of client relationships. 55. After resigning his employment with Plaintiff, Defendant actively solicited Ms. Clayton for employment with Waypoint. Defendant arranged for Ms. Clayton to interview with Waypoint and specifically told her that she would be offered ajob at Waypoint and that he had shared with Waypoint information regarding the salary and other compensation that she received from AlA and her career expectations. 56. Ms. Clayton chose not to take further efforts to pursue employment with Waypoint and she informed Defendant that she would not attend the interview. 57. After Ms. Clayton expressed to Defendant that she was not interested in employment with Waypoint, Defendant persistently continued to attempt to contact Ms. Clayton to discuss the matter. Defendant's Other Conduct 58. On his last day of employment with Plaintiff, Defendant deleted all of the files and information on his computer. 8 59. Defendant has informed employees of Plain tifft hat he was aware ofthe non- competition restrictions in the Agreement, but that he would direct other Waypoint employees to contact and solicit Plaintiffs accounts. 60. Upon information and belief, Defendant has provided Waypoint with a list of Plaintiffs clients and/or prospective clients and has otherwise assisted Waypoint personnel in developing proposals to solicit such accounts. COUNT I BREACH OF NON-SOLICITATION OF EMPLOYEES PROVISION OF AGREEMENT 61. The averments set forth in Paragraphs 1 through 60 of the Complaint are incorporated herein as if set forth in full. 62. Defendant is currently employed by Waypoint, a competitor of Plaintiff. 63. Defendant has directly and materially breached the terms of Section 5(g) ofthe Agreement by enticing and inducing employees of Plaintiff to terminate their employment with Plaintiff. 64. Defendant's breaches of the Agreement have been knowing, voluntary and willful. 65. Upon information and belief, unless enjoined, Defendant will continue to willfully violate the terms of Section 5(g) of the Agreement. 66. Defendant's conduct was and is in furtherance of a scheme to destroy Plaintiff's business. 67. As a result of Defendant's actions, Plaintiff reasonably anticipates the loss of substantial, yet largely incalculable, revenues. WHEREFORE, Plaintiff requests that judgment be entered in its favor and against Defendant on Count I of the Complaint and that (1) an injunction be issued barring Defendant 9 from contacting any employee of Plaintiff for any purpose without prior approval ofthe Court; (2) compensatory damages be awarded to Plaintiff for all calculable harms arising out of Defendant's breach ofthe Agreement; and (3) costs be awarded to Plaintiff. COUNT II BREACH OF FIDUCIARY DUTY 68. Plaintiff incorporates Paragraphs 1 through 67 of its Complaint as if set forth in full. 69. Defendant has violated the common law fiduciary duty and duty ofloyalty arising under his employment relationship with Plaintiff in that, while employed by Plaintiff, Defendant secretly encouraged and induced employees ofPlaintiffto leave the employ of Plaintiff and to join a direct competitor. 70. Defendant has violated the common law fiduciary duty and duty ofloyalty arising under his employment relationship with Plaintiff in that, while employed by Plaintiff, Defendant secretly made statements to fellow employees, and possibly others, disparaging the financial condition and future of Plaintiff. 71. Defendant has violated the common law fiduciary duty and duty ofloyalty arising under his employment relationship with Plaintiff in that, while employed by Plaintiff, Defendant secretly deleted all company files on the AlA computer used by him. 72. The conduct of Defendant was specifically intended to harm Plaintiff. 73. As a consequence ofthe foregoing, Plaintiffhas suffered and will continue to suffer significant harm and irreparable loss. 10 WHEREFORE, Plaintiff requests that judgment be entered in its favor and against Defendant on Count II of the Complaint, and that Defendant be ordered to pay compensatory and punitive damages to Plaintiff, as well as costs and interest. COUNT III BUSINESS DISPARAGEMENT 74. Plaintiff incorporates Paragraphs I through 73 of its Complaint as if set forth in full. 75. Defendant has orally published false statements with the purpose of harming Plaintiff. 76. Defendant knew that the statements made by him were false or acted in reckless disregard for their truth or falsity. 77. The statements of Defendant were not privileged. 78. The statements of Defendant were understood by their recipients as casting doubt upon the financial condition and integrity of Plaintiff. 79. The statements of Defendant were understood by their recipients as casting doubt upon the honesty and credibility of Plaintiff. 80. The statements of Defendants are per se slanderous. 81. Plaintiffhas suffered, and will continue to suffer, direct and substantial financial harm arising out of Defendant's false statements. WHEREFORE, Plaintiff requests that judgment be entered in its favor and against Defendant on Count III of the Complaint, and that Defendant be ordered to pay compensatory and punitive damages to Plaintiff, as well as costs and interest. 11 COUNT IV BREACH OF CONTRACT: DISCLOSURE OF CONFIDENTIAL BUSINESS INFORMATION 82. Plaintiff incorporates Paragraphs 1 through 81 of its Complaint as if set forth in full. 83. Defendant has disclosed to Waypoint confidential business information of Plaintiff including, but not limited to, information regarding salaries and compensation of Plaintiffs employees. 84. Upon information and belief, Defendant has further disclosed to Waypoint confidential business information of Plaintiff relating to Plaintiffs clients and prospective clients, and Plaintiffs proprietary processes. 85. Defendant's conduct is in direct violation of Paragraph 5 of the Agreement. 86. Plaintiff has suffered, and will continue to suffer, direct and substantial financial harm arising out of Defendant's breach. WHEREFORE, Plaintiff requests that judgment be entered in its favor and against Defendant on Count IV of the Complaint, and that Defendant (1) be enjoined from further disclosure of confidential business information of Plaintiff, (2) be ordered to return all confidential information to Plaintiff, and (3) be ordered to pay compensatory damages to Plaintiff, as well as costs and interest. COUNT V COMMON LAW CLAIM FOR MISAPPROPRIATION OF CONFIDENTIAL BUSINESS INFORMATION 87. Plaintiff incorporates Paragraphs 1 through 86 of its Complaint as if set forth in full. 12 88. Defendant has disclosed to Waypoint confidential business information of Plaintiff including, but not limited to, information regarding salaries and compensation of Plaintiffs employees. 89. Upon information and belief, Defendant has further disclosed to Waypoint confidential business information of Plaintiff relating to Plaintiffs clients and prospective clients, and Plaintiffs proprietary processes. 90. Defendant's conduct is in direct violation of his common law duty to Plaintiff to maintain the confidentiality of the confidential business information of his employer. 91. Plaintiff has suffered, and will continue to suffer, direct and substantial financial harm arising out of Defendant's conduct. WHEREFORE, Plaintiff requests that judgment be entered in its favor and against Defendant on Count IV of the Complaint, and that Defendant (1) be enjoined from further disclosure of confidential business information of Plaintiff, (2) ordered to return all confidential information to Plaintiff, and (3) be ordered to pay compensatory and punitive damages to Plaintiff, as well as costs and interest. McNEES, WALLACE & NURICK -- ------- Ian R. Boynton, Jr. L D. No. 39850 Andrew L. Levy LD. No. 76123 100 Pine Street P. O. Box 1166 Harrisburg, P A 17108 (717) 232-8000 Attorneys for Plaintiff Dated: November 18, 2004 13 11/11/2004 16:20 NO. 509 [;1003 ~MPT~~NT_AGBF.RMF.NT THIS EMPLOYMENT AGREEMENT is made and entered into as of the -Z1Z:- day of .sEn.N'\~ , ,1999, by and between AMERICAN INSURANCE ADMINISTRATORS, INC., a Pennsylvania corporation, hereinafter called the "Company", and Bruce G. Cannon, an individual, hereinafter called the "Employee." WHEREAS, the Company is engaged in the conduct of a general insurance agency and brokerage business in all lines of insurance. WHEREAS, in view of the employment experiences and abilities of the Employee, the Company is desirous of employing the Employee and the Employee is desirous of obtaining such employment; NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legally bound hereby, the parties agree to the following 1. F.TT\Ployment ;:md Term (a) Subject to the terms and conditions of the Agreement, the Company agrees to and does hereby employ the Employee and the Employee agrees to and does hereby accept employment with the Company for a period of one (1) year commencing on the 'date hereof (hereinafter called the lIPeriod of Employmentll), unless such employment is terminated pursuant to the Agreement prior to expiration of such Period of Employment. -1- 11/11/2004 16:20 NO. 509 [;1004 (b) The Period of Employment shall be automatically renewed on a year-to-year basis following expiration of the initial Period of Employment, unless either party shall, on or before thirty (30) days prior to the expiration of the Period of Employment or any applicable anniversary thereof, notify the other party, in writing, of termination. 2. Dllties (a) The Employee'S duties shall consist of performing and ca~ying out such duties as are described on the Employee Job Description attached hereto and marked as Exhibit A, as well as such other appropriate quties as may be assigned to him from time to time by the Company. l'he Employee shall perform the foregoing duties at the Company's New Cumberland, Pennsylvania office. (b) During the Period of Employment, the Employee agrees to give the Company the full benefit of his business time, energy, and ability, to comply with the orders and conform to the instructions given to him from time to time by the Company in accordance with Paragraph 2(a) hereof, and to endeavor, in all cases and to the best of his ability to promote the Company's best interests. 3. Remuneration (a) In consideration for the solicitation, production, development, maintenance, surveying and servicing of accounts assigned to him by the Gompany as well as such other duties aa may be assigned to him pursuant to this Agreement, the Employee -2- 11/11/2004 16:20 NO. 509 ~005 shall be compensated based on the Company's validation schedule which is attached hereto and marked Exhibit B. Compensation policies can be adjusted by the Company at its discretion. (b) The Employee shall also be eligible to participate in any Health, Accident or other insurance plans, Vacation, Sick Leave and Fringe Benefit Programs, (including bonus, pension and profit-sharing programs, if any) presently existing or which may hereafter by established by the Company during the Period of Employment, provided that he is otherwise qualified to participate in such plans and programs. The Company shall be entitled to modify its employee benefit program from time to time at its sole discretion. (c) Remuneration is payable bi-weekly on Thursday. When Thursday falls on an observed holiday, payment will be made on the preceding regular working day. Advances or loans on any type of remuneration will not be permitted. (d) The Employee will receive a $250.00 monthly automobile allowance, and a maximum of $125.00 per month for approved entertainment and other business expenses incurred in promoting, fostering, furthering, and perpetuating business of the Company. The Employee shall not commit the CompanYt financially or otherwise, unless prior approval is granted. -3- 11/11/2004 16:20 NO. 509 ~006 4. Termination (a) The Employee's employment hereunder shall automatically terminate following expiration of the Period of Employment or any applicable renewal anniversary thereof, provided that written notice of termination is given by either party to the other on or before thirty (30) days prior to said termination date. Further, the Company shall be entitled to terminate the Employee's employment hereunder at any time (i) because of the Employee's fraud, misappropriation, embezzlement, or the like, or (ii) if the Employee willfully breaches or habitually neglects the duties which he is required to perform pursuant to this Agreement (iii) if the Employee shall violate any provision of this Agreement, or (iv) if the Company shall permanently cease to do business in its present or successor form or structure or commence its voluntary dissolution or complete liquidation or be placed in voluntary or involuntary bankruptcy or (v) if the Employee for any reason becomes unable to perform his duties hereunder, or (vi) upon the disability or death or the Employee, or (vii) upon loss of the Employee'S insurance license. The Employee may terminate his employment hereunder at any time following thirty (30) days' written notice to the Company. In addition, the Company shall have the right to terminate the Employee'S employment hereunder at any time following thirty (30) days written notice to the Employee. -4- 11/11/2004 16:20 NO. 509 ~007 Termination of the employee's employment hereunder by either party shall not be construed to nullify or terminate any covenant or obligation of the Employee which is intended to survive the Period of Employment pursuant to the terms of this agreement. (b) In the event of termination of the Period of Employment or any renewal term thereof, the Employee shall be entitled to receive full remuneration up to and including the da~e of termination. The Company shall have no further obligation to the Employee for remuneration for any period thereafcer. 5. prqprietary Nature, of Business (a) The Employee acknowledges that the Company has a valuable property interest in all aspects of its business relationships with its clients, insurers, and all other persons who perform services for said clients and said insurers. Further, the Employee acknowledges that in the course of his employment with the Company, he will become aware of and familiar with secret or confidential information of the Company relating to its customers, its internal business operations and the sources with which insurance is placed (including secret and confidential information of the Company's affiliates and subsidiaries}, including but not limited to, lists of agents, brokers, policyholders, expiration and renewal dates, inspection and credit reports, other insurance data on various risks written by the Company, (or its affiliates and subsidiaries), the procedures, forms, techniques used in servicing accounts and other -5- 11/11/2004 16:20 NO. 509 ~008 documents and information which is required to be maintained in confidence for the continued success of the Company and its business, all of which secret or confidential information is acknowledged by the Employee to be the sole and exclusive property of the company, its affiliates and subsidiaries. In view of the foregoing, the Employee expressly agrees and acknowledges that the covenants oontained in this Paragraph 5 and in Paragraph 6 hereof are reasonable and n~eessary. (b) All insurance business transacted through the effort of the employee shall be the sole property of the Company, and the Employee shall have no right to share in any commission resulting from the conduc~ of such business, except as otherwise provided for herein. (c) Premiums on all insuran~e business transacted through the efforts of the Employee shall be invoiced to the assured or purchaser by the Company or any insurance company it represents. All checks or bank drafts received by the Employee from any assured or purchaser shall be made payable to the Company or any insurance company it represents; and all premiums shall be collected by the Employee in the name of and on behalf of the Company. -6- 11/11/2004 16:20 NO. 509 ~009 (d) It is the Employee's responsibility to ensure that he complies with the Companies' policy on accounts receivable. (e) The Employee agrees that he will not, without the written consent of the Company, during the term of this agreement or thereafter, disclose or make any use of such confidential information except as may be required in the couree of his employment hereunder. (f) On termination of employment, the Employee shall surrender to the Company all records and all copies made of those records that pertain to any aspect of the business of the Company, with its clients and their respective insurers, including but not limited to active clients coverage, expirations of coverage, premiums and compilations or same. (g) The Employee agrees that he will not entice or induce, directly or indirectly, any other employee of the Company to leave the employ of the Company either during his Period of Employment or during the period of his covenant not to compete set forth in Section 6 hereof. -7- 11/11/2004 16:20 NO. 509 [;)010 6. Agr~ement Not t,o Comp~te (a) Upon termination of his employment for any reason, the Employee agrees that for a period of three (3) years following such termination, he wi11 not, directly or indirectly, solicit, sell or accept insurance business from any person, partnership, or corporation or other entity who is then a client of the Company or who was a client of the Company during the Period of Employment (including any renewal term). If, during the said three (3) year period, any commission or any insurance business becomes payable to the Employee or to any person, firm, or corporation by whom the Employee is then employed or affiliated as a result of the Employee's violation of the first sentence of this paragraph, the Employee agrees to pay promptly to the Company an amount equal to 150% of such commission. (b) If, following termination of the Employee1s employment hereunder, the Employee accepts other employment or enters into a business relationship with any person, partnership, corporation or i I \ ! I \ I 1 I \ ! I I ! i other entity doing business of the kind then being performed by the Company, the Employee shall notify his new employer} person} partnership, corporation, or other entity he is now doing business with; of the conditions outlined in paragraphs 5 and 6 of this agreement. -8- 11/11/2004 15:20 NO. 509 ~011 (c) It is expressly agreed upon that money damages will not be an adequate remedy for any breach of the covenants of the Employer set forth in Paragraphs 5 and 6 hereof; and in the event of any such breach, or threatened breach, the Company shall be entitled to secure an injunction requiring the Employee to abide by his commitments under such provisions of this agreement. 7. Miscel 1 aneollF=l. (a) The Employee may not assign this Agreement or any of his rights or obligations hereunder to any person, firm or entity. The Company shall be entitled to assign or transfer its rights pursuant to this Agreement in connection with any merger/ sale or other disposition of all or any part of its insurance businessi provided, however, that the Company's obligations hereunder are expressly assumed, in writing, by a solvent assignee or successor. (b) Any notice required or permitted to be given pursuant to the Agreement, or in connection therewith, shall in lieu of personal services, be deemed to be duly given when transmitted by first class United States Certified Mail, to the Company and the Employee at the fOllowing addresses, or at such other place as either of the parties may for themselves designate in writing from time to time for the purpose of receiving notices pursuant hereof: (i) Baron S. Keefer, Chief Operating'Officer American Insurance Aamininstrators, Inc. 368 Lewisberry Road New Cumberland, PA (ii) Bruce G. Cannon 833 Stonebridge Drive . Lancaster, PA 17601 -9- 11/11/2004 16:20 NO. 509 ~012 (c) Neither party will be deemed to have waived any right, power, or privilege under this agreement or any provision thereof unless such waiver shall have been duly e~ecuted in writing and acknowledged by the party to be charged with such waiver. The failure of either party hereto at any time to enforce any of the provisions of this Agreement will not be construed to be a waiver of such proYisions, nor in any way affect the validity of this Agreement of any part thereof, or the right to any part to there- after enforce each and every such provision. No waiver or any breach of this Agreement will be held to be a waiver of any other or subsequent breach. (d) This Agreement sets forth the entire Agreement and understanding between the parties as to the subject matter of this Agreement and merges and shall supersede all prior Agreements, commitments, representations, writings and discussions between the parties with respect thereto. This Agreement shall not be subject to changes, alteration or modification, other that by an instrument in writing duly executed by the parties hereto. (e) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. (f) This Agreement shall be construed, interpreted, and enforceable in accordance with the laws of the Commonwealth of Pennsylvania. -10- 11/11/2004 16:20 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day and year first above ~ritten. NO. 509 ~013 AMERICAN INSURANCE ADMINISTRATORS, INC. ~. -jJC~ B .J r :L~ s.~ By: Witness Witness: -ll- 1.0:20 _ ~ 2'J _______________ NO. 509 [;1014 ExJ1ibit ~ Bruce G. Cannon Employee Job Description U~~~Pqe~ Position title:~..r...i_...-t ~~t'utro~':" E"'mployee Benefits Reports To: Baron Keefer, Chief Operations Officer Ken Krall, Director, Benefits Division Basic Functions: · Prospecting. soliciting, quoting and selling new employee benefits accounts. · Renew and provide continuing service to these accounts. A. Specific Duties (New Business): · Develop and maintain a prospect list, records and files. · Contact pl'Ospects. . Obtain necessary and accurate infonnauon for com.plete proposals. · Prepare proposals and submit to selected carriers. · Negotiate premiums with carriers. . Prepare proposals. . Install account. . . . . · R. Specific Duties (Renewal Business): · Maintain. and update account information file. · Review and analyze existing accounts to determine unprotected or inadequately insured exposures. . Review ~ewa1 proposal and market the account as necessary to other carriers. . Contact accounts at renewal time and recommend changes in coverage that appear necesse or desirable. . Provide all necessary client services in support of the account's benefit program. J-' J -._- '- NO.509 11/11/2004 lS~20 Exhibit B Bruce G. Cannon Compensation and C .. . omnusslon Schedule Year 1, Base Salary $50,000 Draw ~ount $35,000 N~ BusIness Commission 50% . Miirimum. required New Business Revenue is $70,000 a1\1\m~llzed Re--evaluatioll with targets of: ~ Base SalarY $40,000 DraW Amount $27 :>000 New Business eonunission 45% Renewal Coronllssion 350/0 }JiDim111n requited New BusineSS ~ is $70,000 annualized Base Salary $35,000." Draw Atn()1.n:tt S20,OOC! . New -ausiJli:SS Co1Jl1IISSlon 35% Ren~ ~si0ll35% ~ r.:qoired ~w BusineSS Revenue is $70,000 annualizJld \ t' ~j ()\\11l. is paid jan!icipalion of adeqUlrte future conunissions }iote: 1'be drl\\'I \l1Il' <l1li 1f, at t\l'Qd'of any eII1ployDlent year, the full draW is \D ~ the {u\1 amo .' sjon& ~ commissions will be held \D cover the not co'leret1 'oY ~ t~,lIllW business revenue level is not acJrieVed. aefi.cit- :If tbt ent and c~n l~l will be (\eternIined by AlA _ ~ ~ . __-"',..... tivity petformedlplanned and service value ~. -=-_~on oJ. ~~"\.W; frolll ~ e"i:I-L- - ~ -,., 1101.5 , \ ~ ~. ~. . .- \ VERI FICA TION Subject to the penalties of 18 Pa. C.S. 94904, relating to unsworn falsification to authorities, I hereby certify that I am Managing Principal of American Insurance Administrators, Inc. As such, I have read the foregoing document and the facts set forth are true and correct to the best of my knowledge, information and belief. .~JQ.O~v ~ Dan G. Dorsheimer Dated: November 17, 2004 ..(7;') ~ ~ ---- ~, J'\ -- :tcF -J '-": J\ \ V0 ~ .-J -S\ eN - J. <'" p ,...~~ c"';) 9 1:.'" > .1:- I I -.~ =1+~ - r: ~" i 11 " _:.:.: r= n , ; ,', C) ( ,'j' f -, 'C) ; -. <,1 ' ' ;. 'j (':,1 ~ I 1"1 ! - 1', -I ,) ., ell ,) co < p AMERICAN INSURANCE ADMINISTRATORS, INC., PENNSYLVANIA Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, v. CIVIL ACTION - EQUITY BRUCE CANNON, Defendant NO. 2004-5829 STIPULATED REQUEST FOR ENTRY OF ORDER AND NOW COME both the Plaintiff, American Insurance Administrators, Inc., and the Defendant, Bruce Cannon, and request that this Honorable Court enter the attached Order in the above-referenced matter. Respectfully submitted, McNEES W ALLAC~NURICK LLC By ~f!L,r~ Andrew L. Levy 100 Pine Street P.O. Box 1166 Harrisburg, P A 17108-1166 Michael A. Firr' , sq. Penn National I su ce Plaza 2 North Second t et, 7th Floor Harrisburg, Pennsylvania 1710 I By Attorneys for Plaintiff Attorneys for Defendant Dated: March~, 2005 - JC:J <5' "3 +- ~ '9 ~ ~ .c a> SHER~FF'S RETURN - REGULAR CASE NO: 2004-05829 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND AMERICAN INSURANCE ADM INC VS CANNON BRUCE RONALD HOOVER , Sheriff or Deputy Sheriff of Cumberland County, Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT & NOTICE was served upon CANNON BRUCE the DEFENDANT , at 1351:00 HOURS, on the 2nd day of December, 2004 at WAYPOINT BENEFITS CONSULTING 1215 MANOR DRIVE 2ND FLOOR MECHANICSBURG, PA 17055 by handing to LAWRENCE M COONEY, PRESIDENT a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge 18.00 8.14 .00 10.00 .00 36.14 So Answers: _ #' ~'/A! ./,i.''f~r;, ~ ~ ~......~(:,:';;:. ~~,,-(~c;., .......~ 't:"~"'-riiC. ,- L~ .-AI' d .;,/' ~":,,,,::;:'4~-"'-. ....~-- ~~ R. Thomas Kline 12/06/2004 MCNEES WALLACE NURICK Sworn and Subscribed to before me this ~ day of J065' A.D. By: } ~ ...~. C~t<<::;/->/?/f Deputy Sheriff ~icr , AMERICAN INSURANCE ADMINISTRATORS, INC., PENNSYLVANIA Plaintiff MAR 1 7 2005"'" '" IN THE COURT OF COMMO PLEAS CUMBERLAND COUNTY, v. CIVIL ACTION - EQUITY BRUCE CANNON, Defendant NO. 2004-5829 ORDER AND NOW this ~ day of f\'la-<.A.. , 2005, it is hereby ORD consent of both parties, that the following relief is ordered in this case: D upon 1. Defendant will comply with Sections 5 and 6 of the Employment Ag ement, dated September 21, 1999, between Plaintiff and Defendant ("Agreement") attached ereto as Exhibit A and incorporated herein. 2. This action will be dismissed with prejudice with each party bearing s own fees and costs. The Court will retain jurisdiction to enforce this Order. BY THE COURT: . ~ ~O~ D~~ J.