Exhibit 10.8

 

Heritage Insurance Holdings, Inc.

A DELAWARE CORPORATION

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of November
4, 2015 by and between HERITAGE INSURANCE HOLDINGS, INC., and its subsidiary
companies (collectively, the "Company"), and Ernie Garateix (the "Executive").

 

RECITALS

 

1.

The Company is engaged in the insurance and financial services industry;

 

2.

The Executive will serve as the Chief Operating Officer of the Company;

 

 

3.

The Company and the Executive are parties to an employment agreement. as amended
from time to time (the "Prior Agreement"). and now desire to amend and restate
the terms of the Prior Agreement to provide for the continued employment of the
Executive;

 

4.The Board of Directors (the "Board") approved the employment of the Executive
upon the terms and conditions set forth herein.

NOW. therefore, in consideration of the mutual promises contained herein, and
for other good and valuable consideration, the Company and Executive agree as
follows:

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties hereby agree as follows:

Section I. Employment

1.Employment. The Company shall employ Executive as its Chief Operating Officer
and Executive accepts such employment and agrees to perform the services and
duties specified herein or as assigned to Executive from time to time by the
Board.

 

2.Term of Employment. The Company shall continue to employ the Executive and the
Executive shall continue to serve the Company and its Subsidiaries, on the terms
and conditions set forth herein, until December 31, 2020, unless terminated as
hereinafter set forth, or as mutually agreed to by the parties (the "Term").

 

 

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Section II. Compensation and Benefits

 

1.Base Salary. During the Employment Term, the Executive shall receive a base
salary at the annual rate of $750,000 for 2016, which shall be increased as
necessary to reflect reasonable cost of living and inflation-based adjustments
on January 1st of each calendar year during the Term. The base salary shall be
payable in substantially equal installments consistent with the Company's normal
payroll schedule, subject to applicable withholding and other taxes, and may be
increased by the Board in its discretion.

2.Bonus. The Executive shall receive an annual cash bonus of up to $100,000 by
December 31st of each calendar year during the Term based on and subject to
available funds in the Company's EBITDA bonus pool as approved by the Board.

 

3.Award of Restricted Stock. Executive shall receive a grant of 125,000
restricted shares granted on November 4, 2015 and vesting in equal installments
of 25,000 shares on November 4th of each calendar year beginning on the first
anniversary of the grant date.

No grant shall occur unless Executive has remained in the continuous full-time
employ of the Company through the applicable grant date unless otherwise
provided herein. The grant shall be subject to the terms and conditions of the
applicable restricted stock award and shall be governed by the Heritage
Insurance Holdings, Inc. Omnibus Incentive Plan.

 

4.Options and Warrants. From time to time, the Company may grant to Executive
options or warrants to purchase the Company's common stock. The Company shall
enter into an option or warrant agreement for the issuance of such options or
warrants in such event.

 

5.Expense Reimbursement. During the Employment Term, the Company, upon the
submission of supporting documentation by the Executive, and in accordance with
Company policies for its executives, shall reimburse the Executive for all
expenses actually paid or incurred by the Executive in the course of and
pursuant to the business of the Company and the Subsidiaries, including
reimbursement of moving expenses and a reasonable car allowance and expenses for
travel and entertainment, for which the Executive shall have an expense
allowance as set by the Board from time to time.

 

6.Insurance. During the Employment Term, the Company shall obtain comprehensive
major medical, hospitalization and disability insurance coverage, either group
or individual, for the Executive and his dependents, and may obtain or may
continue in force life ("key man") insurance on the Executive for the benefit of
the Company/Executive (collectively, the "Policies"), which Policies the Company
shall keep in effect at its sole expense throughout the Term. The Policies to be
provided by the Company shall be on tem1s as determined by the Board. Within 30
days following any termination of this Agreement, at the Executive's option, the
Company shall assign to the Executive all insurance policies on the life of the
Executive then owned by the Company in consideration of the payment by the
Executive of the premiums accruing after the date of such termination.

7.Working Facilities. During the Employment Term, the Company shall furnish the
Executive with an office, and such other facilities and services suitable to his
position and adequate for the performance of his duties hereunder.

 

 

8.

Vacation. Executive shall receive up to thirty paid vacation days every calendar
year. Any portion of the unused annual vacation days shall be accrued and will
accumulate, and may be used by the Executive at any time during its employment.

 

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Section III. Termination.

 

 

1.

At Will Employee. Notwithstanding anything contained in this Agreement to the
contrary, Executive is an at will employee and may be terminated for any reason
as determined by the Company in its sole discretion.

 

2.

Voluntary. Notwithstanding anything contained in this Agreement to the contrary,
this Agreement may be terminated by the Executive for any reason by giving no
less than 90 days’ notice. The Company shall not be responsible for any further
compensation of any kind to the Executive beyond 90 days from the date the
Executive provides notice of his intent to terminate his employment.

 

Section IV. Restrictive Covenants

 

 

1.

Confidentiality/Non-Disclosure. "Confidential Information" shall mean any
intellectual property, information, or trade secrets (whether or not
specifically labeled or identified as "confidential" or "private"), in any forn1
or medium, that is disclosed to, or developed or learned by, the Executive, and
that relates to the business plan, underwriting, products, services, research,
or development of or by the Company or its Subsidiaries, suppliers,
distributors, customers, investors, partners, and/or other business associates,
and that has not become publicly known. Confidential Information includes, but
is not limited to, the following:

 

a.

Internal business information (including but not limited to information relating
to strategy, staffing, financial data, training, marketing, promotional and
sales plans and practices, costs, bidding activities and strategies, rate and
pricing structures, and accounting and business methods);

 

b.Identities of, negotiations with, individual requirements of, specific
contractual arrangements with, and information about, the Company's or its
Subsidiaries' suppliers, distributors, customers, investors, partner and/or
other business associates, their contact information, and their confidential
information;

 

c.Compilations of data and analyses, underwriting process and parameters,
material processes, technical data, specific program information, trade or
industrial practices, computer programs, formulae, systems, research, records,
reports, manuals, documentation, customer and supplier lists, data and databases
relating thereto, and technology and methodology regarding specific projects;
and;

 

d.Intellectual Property not generally available to the public, or published by
the Company or its Subsidiaries. "Intellectual Prope1iy,11  or "IP," shall mean
(1) inventions or devices, whether patentable or not; (2) original works of
authorship produced by or on behalf of the Company or its Subsidiaries; (3)
trade secrets; (4) know-how; (5) customer lists and confidential information;
and (6) any other intangible property protectable under federal, state or
foreign law. Other examples of Intellectual Property include, but are not
limited to, patent applications, patents, copyrighted works, technical data,
computer software, knowledge of suppliers or business partnerships,
documentation, processes, and methods and results of research.

 

 

a.

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2.

Acknowledgements.

 

a.The Executive acknowledges and agrees with the representations of the Company
that Confidential Information and IP is proprietary and valuable to the Company,
and that any disclosure or unauthorized use thereof may cause irreparable harm
and loss to the Company. It is further acknowledged by the Executive that if the
general public or competitors (now existing or to be created in the future)
learn of these ongoing discussions and negotiations with potential investors and
of the formation of the Company, the Insurance Entity and other Subsidiaries as
a result of the Executive's failure to comply hereunder, irreparable harm and
substantial financial loss may occur to the Company's, the Insurance Entity or
other Subsidiary's viability and future revenues. The Executive acknowledges and
agrees that the knowledge and experience the Executive shall acquire by virtue
of assisting with the formation of the Insurance Entity and application to the
FOIR for approval of the Insurance Entity to write homeowner's insurance
coverage in the State of Florida during the Employment Term and by virtue of
employment by the Company during the Employment Te1m is of a special, unique and
extraordinary character and that such position allows the Executive access to
Confidential Information and Intellectual Property.

 

b.The Executive acknowledges and agrees that (a) the nature and periods of
restrictions imposed by the covenants contained in this Agreement are fair,
reasonable and necessary to protect and preserve for the Company and its
Subsidiaries their viability and future revenues; (b) the Company or its
Subsidiaries would sustain great and irreparable loss and damage if the
Executive were to breach any of such covenants set forth herein; (c) the Company
and its Subsidiaries intend to conduct business actively in the entire territory
that is the subject of this Agreement (as defined below) and beyond; and (d) the
covenants herein set forth are made as an inducement to and have been relied
upon by the Company in entering into this Agreement. The Executive acknowledges
and agrees this Agreement is binding on the Executive's heirs, executors,
successors, administrators, representatives and agents.

 

c.The Executive agrees to receive and to treat Confidential Information and the
knowledge of IP on a confidential and restricted basis and to undertake the
Following additional obligation with respect thereto:

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i.

To use the Confidential Information for the singular purpose of benefiting the
Company and its Subsidiaries, and specifically not use the Company's and its
Subsidiaries' customer or prospective customer data to conduct marketing, or
otherwise undertake personal contacts, to solicit, divert or appropriate
customers or prospective customers of the Company or its Subsidiaries, whether
for the benefit of the Executive or any Person;

 

 

 

ii.

Not to disclose Confidential Information, except to the extent the Executive is
required to disclose or use such Confidential Information in the performance of
the Executive's assigned duties for the Company or its Subsidiaries, to any
Person without the prior express written consent of the Member-Managers of the
Company, or their successors, including Manager(s), as an action permitted under
the operating agreement of the Company;

 

 

 

iii.

To tender all Confidential Information to the Company, and destroy any of the
Executive's additional notes or records made from such Confidential Infom1ation,
immediately upon request by the Company or upon termination of this Agreement
either during the Initial Term or Employment Term;

 

 

 

iv.

To promptly disclose and assign any right, title and interest to the Company all
IP authored, made, conceived or actually reduced to practice, alone or jointly
with others, (a) while performing duties for the Company or its Subsidiaries, or
(b) during the Initial Term or Employment Term of this Agreement, or ( c) which
results or is suggested by any work done for or at the request of the Company or
its Subsidiaries, or (d) which was aided by the use of trade secret information,
whether or not during working hours and regardless of location;

 

 

 

v.

To use best efforts to safeguard the Confidential Information and protect it
against disclosure, misuse, espionage, loss, misappropriation and theft;

 

 

 

vi.

Immediately notify the Members and Manager(s) of the Company of any breach of
this Agreement; and

 

 

 

vii.

Assist the Company or its Subsidiaries, both during and after the termination of
this Agreement, in obtaining and enforcing any legal rights in IP of the Company
or its Subsidiaries or assigned or to be assigned by the Executive to the
Company or its Subsidiaries.

 

 

3.Non-Solicitation. For a period of five years after the Executive leaves the
employment of the Company, the Executive covenants and agrees with the Company
that the Executive will not, directly or indirectly, attempt to employ, divert
away an employee, or enter into any contractual arrangement with any employee or
former employee, of the Company or its Subsidiaries, unless such employee or
former employee has not been employed by the Company or its Subsidiaries for a
period in excess of one (1) year.

 

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4.Non-Compete. For a period of two years after the Executive leaves the
employment of the Company, the Executive covenants and agrees with the Company
that the Executive will not, directly or indirectly, work for or consult with
any competing insurance companies that do write the same insurance products in
the states in which the Company does business. The non-compete covenant will not
apply to the Executive if the Company terminates the Executive without "Cause."
As used in this Agreement "Cause" shall only mean (i) any action or omission of
the Executive which constitutes a breach of this Agreement, or (ii) fraud,
breach of fiduciary duty, gross negligence, embezzlement or misappropriation as
against the Company.

 

Section V. Miscellaneous

 

 

1.

Severability. In the event that the provisions of this Agreement should ever be
deemed to exceed the time or geographic limitations permitted by applicable law,
then the provisions will be reformed to the maximum time or geographic
limitations permitted by applicable law. Every provision of this Agreement is
intended to be severable, and, if any term or provision is determined to be
illegal, invalid or unenforceable for any reason whatsoever, and cannot be
reformed, such illegal, invalid or unenforceable provision shall be deemed
severed here from and shall not affect the validity, legality or enforceability
of the remainder of this Agreement.

 

 

2.

Books and Records. All books, records, accounts and similar repositories of
Confidential Information of the Company and its Subsidiaries, whether prepared
by the Executive or otherwise coming into the Executive's possession, shall be
the exclusive property of the Company and shall be returned immediately to the
Company and its Subsidiaries on termination of this Agreement or on the Board's
request at any time.

 

 

3.

Survival. The restrictions and obligations of this Section IV shall survive any
expiration, termination, or cancellation of either the Initial Term or
Employment Term of this Agreement and shall continue to bind the Executive and
the Executive's respective heirs, executors, successors, administrators,
representatives and agents.

 

 

4.

Consolidation. Merger or Sale of Assets. Nothing in this Agreement shall
preclude the Company from consolidating or merging into or with, or transferring
all or substantially all of its assets to, another corporation which assumes
this Agreement, and all obligations of the Company hereunder, in writing. Upon
such consolidation, merger, or transfer of assets and assumption, the term "the
Company" as used herein, shall mean such other corporation and this Agreement
shall continue in full force and effect, subject to the provisions of Paragraph
6 hereof.

 

 

5.

Binding Effect. Except as herein otherwise provided, this Agreement shall inure
to the benefit of and shall be binding upon the parties hereto, their personal
representatives, successors, heirs and assigns. The obligations of Company and
the Subsidiaries to Executive are joint and several. All provisions of this
Agreement are specifically enforceable by the Subsidiaries in addition to
Company. Each of the Subsidiaries shall be considered a third party beneficiary
under the provisions of this Agreement.

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6.

Terminology. All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural and vice versa. Titles of Paragraphs are for
convenience only, and neither limit nor amplify the provisions of the Agreement
itself.

 

7.

Further Assurances. At any time, and from time to time, each party will take
such action as may be reasonably requested by the other party to carry out the
intent and purposes of this Agreement.

 

8.

Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. It supersedes all
prior negotiations, letters and understandings relating to the subject matter
hereof.

 

9.

Amendment. This Agreement may not be amended, supplemented or modified in whole
or in part except by an instrument in writing signed by the party or parties
against whom enforcement of any such amendment, supplement or modification is
sought.

 

10.

Assignment. This Agreement may not be assigned by the Executive and may not be
assigned by the Company except as described in above.

 

 

11.

Choice of Law. This Agreement will be interpreted, construed and enforced in
accordance with the laws of the State of Delaware, without giving effect to the
application of the principles pertaining to conflicts of laws. The Company shall
have the right to seek both equitable and monetary damages from the Executive
for any violation of this agreement.

 

12.

Effect of Waiver. The failure of any party at any time or times to require
performance of any provision of this Agreement will  in no manner  affect  the
right to enforce the same. The waiver by any  party of any breach of any
provision  of this Agreement  will not  be construed to be a waiver by any such
party of any succeeding breach of that provision  or a waiver by such party of
any breach of any other provision.

 

13.

Construction. The parties hereto and their respective legal counsel participated
in the preparation of this Agreement; therefore, this Agreement shall be
construed neither against nor in favor of any of the parties hereto, but rather
in accordance with the fair meaning thereof.

 

14.

Arbitration. The parties agree that all disputes related to this Agreement,
other than disputes seeking equitable remedies. shall be submitted to
arbitration in Pinellas County, Florida pursuant to the rules of the American
Arbitration Association.

 

15.

Equitable Remedy. The parties hereto acknowledge and agree that any party's
remedy at law for a breach or threatened breach of any of the provisions of this
Agreement would be inadequate and such breach or threatened breach shall be per
se deemed as causing i1Teparable harm to such party. Therefore, in the event of
such breach or threatened breach, the parties hereto agree that, in addition to
any available remedy at law, including but not limited to monetary damages, an
aggrieved party, without posting any bond, shall be entitled to obtain, and the
offending party agrees to oppose the aggrieved party's request for, equitable
relief in the form of specific enforcement, temporary restraining order,
temporary or permanent injunction, or any other equitable remedy that may then
be available to the aggrieved party.

 

16.

Binding Nature. This Agreement will be binding upon and will inure to the
benefit of any successor or successors of the parties hereto.

 

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17.

Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed an original.

 

 

18.

Notice. Any notice required or pe1mitted to be delivered hereunder shall be
deemed to be delivered when sent by facsimile with receipt confirmed or when
deposited in the United States mail, postage prepaid, registered or certified
mail, return receipt requested, or by overnight courier, addressed to the
parties at the address first stated herein, or to such other address as either
party hereto shall from time to time designate.

 

Agreed to by:

Heritage Insurance Holdings, Inc.

 

By: /s/ BRUCE LUCAS              By: /s/ ERNIE GARATEIX                  

Bruce Lucas, CEOErnie Garateix, Chief Operating Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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