Exhibit 10.6
EMPLOYMENT AGREEMENT
This Agreement dated as of the 1st day of December, 1996, by and between
National Research Corporation, a Nebraska corporation (hereinafter
referred to as the "Company") qualified to do business in the State of
Nebraska, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (hereinafter referred to as the "Employee").
In consideration of the mutual agreements herein contained, the parties
hereto hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs Employee, and Employee hereby
accepts employment, effective December 1, 1996, upon and subject to
the terms and conditions hereinafter set forth.
2. TERM. Subject to the provisions for termination hereinafter
provided, this Agreement shall be effective on and from the date
first mentioned above and shall terminate on November 30, 1999, and
on each one-year anniversary of that date, the Agreement shall be
extended for a period of an additional twelve months, and if not
terminated thereafter, shall be extended for an additional year,
unless this Agreement has been terminated in accordance with the
provisions of Paragraph 10, on or before that date.
3. JOB EXPECTATIONS AND REQUIREMENTS. Employee shall have a direct
responsibility for the Company's sales, marketing and client services
and such other duties as assigned by the Chief Executive Officer of
the Company. Direct responsibility is defined as the creation,
implementation and continual refinement of programs and policies to
achieve short and long-term goals of the Company. Employee shall
serve as a member of the Company's Advisory Board. In addition to
stated areas of functional responsibility, Employee will contribute
to the overall management and direction of the Company. Expectations
in this area of general management will include, but not be limited
to:
a. Lead an effort to create and implement a strategic plan for the
Company.
b. Broaden relationships between the Company and health care
regulatory and policy makers.
c. Help the Company transition from an entrepreneurial to a
professional-based management model.
4. PERFORMANCE MEASURES. Employee shall, in general, be measured by
Employee's performance in helping the Company achieve its' strategic
goals set forth in the Company's strategic plan and achieve
functional goals in the areas of revenue, profit, market share and
client satisfaction and retention.
5. EXTENT OF SERVICE. Employee shall devote her entire business time,
attention and energies, as well as her best talents and abilities, to
the business of the Company in accordance with the Company's
instructions and directions and shall not during the term of this
Agreement be engaged in any other business activity, whether or not
such business activity is pursued for gain, profit or other pecuniary
advantage, except to the extent an exception hereto may be permitted
by the express written authorization of the Company.
6. COMPENSATION. For all services rendered by Employee under this
Agreement, including any expenses incurred therewith except as
provided in paragraph 7 hereof and in Appendix A attached, the
Company hereby agrees to pay Employee:
a. An annual base salary in the amount of $140,000, which shall be
payable to Employee in such installments, but not less than
monthly, as are consistent with the Company's practice for its
other executives.
b. An annual incentive based on increases in rate of revenue
growth, in revenue level and in profitability. Currently, NRC's
annual incentive plan is generally structured as follows:
incentive will be paid if the Company meets its minimum
performance targets; the amount of such annual incentive shall
be a target equal to 1% of profits, 1.5% of increase in gross
revenue over previous year and .1875% of total gross revenue;
such target annual incentive is estimated at $140,000. It is
anticipated that for 1997 and for subsequent years, a revised
annual incentive plan will be implemented. This plan will be
implemented in accordance with Paragraph 6(d). Any amounts
payable under the annual incentive plan shall be paid to
Employee within 75 days following the end of the Company's
fiscal year.
c. A long-term incentive determined and paid in accordance with the
terms of a plan to be established by January 1, 1997, and first
effective for calendar year 1997; Employee shall participate in
such plan on essentially the same terms as the other senior
officers of the Company.
d. During the term of this Agreement, the Company has the right to
change the amount of and procedures for determining the annual
base salary, annual incentive and long-term incentive; provided,
however, that any such change will not reduce the total
compensation opportunity available to the Employee at the time
such change is made.
7. EMPLOYEE BENEFITS. Employee shall be entitled to participate in any
life insurance, accident, medical, hospital, pension or profit
sharing or other group program as may from time to time uniformly be
maintained by the Company for all of its salaried employees during
the term of employment hereunder. Cost of the group plan will be
shared at the same ratio as it is for all of the Company's other
salaried employees. The current cost is shared 50/50 between
employees and Company. The Company will maintain in effect during
the term of employment hereunder a life insurance policy(ies) on the
life of the Employee in the face amount of $600,000 and the proceeds
of such policies upon the death of the Employee shall be payable to a
beneficiary or beneficiaries designated in writing from time to time
by the Employee. The Employee shall be responsible for any income
taxes attributable to imputed income from such contracts. In the
event the Company is unable to obtain insurance coverage on the life
of the Employee at standard rates, the Company may at its discretion
reduce the amount of such coverage to be provided to the Employee
such that the premiums payable by the Company on such reduced
coverage would be equal to the premiums payable at standard rates, on
a policy(ies) having a face amount of $600,000. The Company shall
endeavor to maintain in effect life insurance policy(ies) that extend
to the Employee the right to assume the life insurance policies or
convert the policies to individual coverage.
8. EXPENSES. The Company will reimburse Employee for all reasonable and
ordinary business expenses; including pre-approved job-related
education expenses, business entertainment and travel expenses
incurred by her in the performance of her duties hereunder, but only
upon the presentation by Employee to the Company, from time to time,
of an itemized account of such expenditures.
9. VACATIONS. Employee shall be entitled to 15 days of vacation time
per calendar year during her employment with the Company. Vacation
shall be administered in accordance with the procedures established
by the Company from time to time.
10. TERMINATION. In the event this Agreement is terminated by Employee's
death, by Employee's own action, or by the Company, each party's
obligations under this Agreement shall thereupon cease and terminate
except for obligations accrued but undischarged to and including the
date of such event and except as otherwise provided in Paragraphs 10,
13, and 14. The Company may terminate the Employee "for cause" only
if Employee is convicted of a felonious act of moral turpitude, is
consistently, flagrantly and grossly negligent in the performance of
her duties hereunder, or knowingly engages in wrongful misconduct
resulting in substantial damage to the Company. The Company may
terminate the Employee for any reason other than cause, as described
above, but in that event, the Employee shall be entitled to
outplacement assistance as described below, and severance in an
amount equal to $200,000 annually over the remaining term of the
initial agreement, or twelve months during any extended term, in
either event, such amount shall be paid as salary continuation
payments monthly over the period following the Employee's
termination. During the period of such salary continuation, Employee
shall be covered by the medical and group term life insurance
programs made available by the Company to its employees to the extent
Employee had such coverage immediately prior to the period of such
salary continuation at the same cost as described in Paragraph 7.
During the period of salary continuation, the separated Employee may
not participate in the retirement program sponsored by the Company.
The Company will reimburse the Employee for outplacement service
expenses incurred by the Employee upon presentation of itemized
expenditures not to exceed $3,500.
11. DISABILITY. Company shall reimburse Employee for premiums paid by
Employee for disability insurance coverage in excess of Company's
group policy. Such coverage, including the group policy, shall
provide a benefit not to exceed 60% of the annual base salary of the
Employee and shall be payable by reason of illness, disability,
incapacity or other inability, which said disability lasts for a
period of more than one hundred eighty (180) consecutive days, to
provide the services contemplated by Paragraphs 4 and 5. Company
shall be discharged of all of its obligations under this Agreement
and all further obligations or liabilities of the Company shall
immediately cease and terminate upon the Employee's qualifying for
benefits under such coverage. Reimbursement shall be made upon
timely submission of evidence of the premiums paid. Such premium
reimbursement shall be taxable income to the Employee. If Employee
maintains such policy above the group policy, the Company shall be
responsible only for the cost of a policy with similar features and
options as the Company's group policy.
12. RELOCATION COSTS. Company shall reimburse Employee for relocation
costs in connection with the move of Employee's principal residence
from Dallas, Texas, to a location convenient to the Employer's
principal place of business in Lincoln, Nebraska. Such relocation
shall take place as soon as reasonably practicable. In the event
Employee, by her own action terminates her employment with the
Company within one year of Employee being reimbursed for her
relocation expenses, Employee shall be obligated to repay such
reimbursements to the Company. Relocation costs eligible for
reimbursement are set forth in Appendix A attached.
13. NONDISCLOSURE BY EMPLOYEE. Employee acknowledges and agrees that
information the Employee will obtain while employed by the Company is
highly confidential, proprietary or a trade secret which is important
to the Company and to the effective operation of the Company's
business. Employee therefore agrees that while employed by the
Company, and at any time thereafter, she will make no disclosure of
any kind, directly or indirectly, concerning any confidential matters
relating to the Company or any of its activities.
14. NONCOMPETITION BY EMPLOYEE. Upon termination of Employee's
employment, then Employee agrees not to compete with the Company in
the United States, except Hawaii and Alaska, for a period equal to
the remaining term or twelve months during the extended term,
following such termination. The intent of the noncompetition
provision is for it to coincide with the time period of salary
continuation as described in Paragraph 10. Employee agrees that
during the period in which she must not compete, she will not work
for, advise, consult with, serve or assist in any way, directly or
indirectly, any party whose business is directly competitive with the
activities or businesses of the Company, and Employee agrees further
that she will herself not compete in any way, directly or indirectly,
with the Company, and that she will not purchase or otherwise acquire
any interest of any kind in any business which is directly
competitive with the Company, except that a 10% or less ownership
interest in public traded company shall not be subject to this
acquisition prohibition. The foregoing restrictions on competition
by Employee shall be operative for the benefit of the Company and of
any business owned or controlled by the Company, or any successor or
assign of any of the foregoing. Notwithstanding the foregoing, if
the Employee informs the Company that Employee is to be employed by a
consulting firm that is generally viewed as not competing with the
Company, and the Company does not within 15 days of such notice
advise the Employee that such employment will be viewed by the
Company as a violation of this Paragraph 14, Employee will not be
viewed as in violation of this Paragraph 14.
The parties hereto, recognizing that irreparable injury will result
to the Company, its' business and property in the event of Employee's
breach of her Agreement not to compete, and that employment is based
primarily upon this Agreement, agree that in the event of Employee's
breach of her agreement not to compete, the Company shall be
entitled, in addition to any other remedies and damages available, to
an injunction to restrain the violation thereof by Employee, her
partners, agents, servants, employers, employees and all persons
acting for or with her and/or to stop the payment of the severance
described in Paragraph 10. Employee represents and admits that in
the event of the termination of her employment for any cause
whatever, her experience and capabilities are such that she can
obtain employment in a business engaged in other lines and/or of a
different nature than the Company, and that the enforcement of a
remedy by way of injunction will not prevent her from earning a
livelihood.
15. TAXES. Employee shall be liable for all of Employee income and
employment taxes, that may be payable upon the compensation and
benefits made available to the Employee by the Company. Company may
withhold taxes in accordance with applicable law.
16. NOTICES. Any notice given under this Agreement to either party shall
be made in writing. Any such notice shall be deemed to be given when
mailed to any such party by registered or certified mail, postage
prepaid, addressed to such party at their respective addresses set
forth below, or at such other address as such party may hereafter
designate (by written notice given to the other party) as their
respective address for purposes of notice hereunder:
Employee: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Company: National Research Corporation
▇▇▇▇▇▇▇ ▇▇▇▇, President
1033 "O" Street, ▇▇▇ ▇▇▇▇▇
▇▇▇▇'▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
17. WAIVER OF BREACH. The waiver of either party of a breach of any
provisions of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
18. ASSIGNMENT. The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company, but the Company shall not
assign this Agreement without Employee's prior written consent, which
consent shall not be unreasonably withheld. Employee may not assign
her rights and obligations under the Agreement.
19. HEADINGS. The headings of this Agreement are inserted for
convenience only and are not to be considered in construction of the
provisions thereof.
20. INTERPRETATION. All questions of validity and interpretation of this
agreement shall be governed by, and construed and enforced in all
respects in accordance with, the laws of the State of Nebraska. All
decisions and consents which shall or may be made and given by the
Company hereunder are required to be made or given, if at all, by the
Advisory Board of the Company, but Employee shall be entitled to rely
on any writing purporting to be signed by an executive officer of the
company (other than Employee).
21. ENTIRE AGREEMENT. This instrument contains the entire Agreement of
the parties and no previous representations, inducements, promises or
agreements, oral or otherwise, shall be of any force or effect. No
change or modification of this Agreement shall be valid unless the
same be in writing and signed by the party against whom such change
or modification is sought to be enforced.
In witness whereof, the parties have executed this Agreement as of the
date first mentioned above.
Attest: National Research Corporation
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/▇▇▇▇▇▇ ▇▇▇▇▇ Its: CEO
Witness
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
APPENDIX A
RELOCATION EXPENSES
The Company shall reimburse Employee for the following expenses up to the
not-to-exceed amounts.
STANDARD CLOSING COST - SALE OF DALLAS HOME - Not to exceed $45,000.
- Real estate commissions
- Title insurance
- Tax certificate
- Attorney fee warranty and deed
- Release
- Closing escrow fee
- File release
STANDARD MOVING EXPENSES - MOVE OF HOUSEHOLD ITEMS FROM DALLAS TO LINCOLN
- Not to exceed $10,000.
- Storage
- Delivery
- Insurance
INTEREST FREE LOAN FOR 18 MONTHS - Not to exceed $250,000.
- Employee will execute promissory note
- Made upon the purchase of a home in Lincoln
- Employee pays income tax on imputed interest income
- Promissory note is due upon earlier of sale of Dallas home or
May 31, 1998
- If not repaid by May 31, 1998, then Company has the right to
offset against incentive monies due to the employee.
STANDARD CLOSING COST - PURCHASE OF LINCOLN HOME - Not to exceed $6,000.
- Appraisal
- Tax Service Fee
- Credit Report
- Investors Underwriting
- Recording Fee
- Surveyor Fee
- Termite Inspection
- Flood Plain Certificate
- Loan Origination Fee 1% of Mortgage Amount
LIVING AND TRAVEL EXPENSES - Not to exceed $15,000
- Temporary living expenses in Lincoln prior to closing on Lincoln
home
- Travel expenses between Lincoln and Dallas prior to closing on
Lincoln home
Expenses will be subject to reimbursement only upon presentation of
appropriate receipts.