Document:

exv10w8

 

Exhibit 10.8

SERVICING AGREEMENT

BETWEEN

BROOKE CORPORATION

AND

FIRST AMERICAN CAPITAL CORPORATION

This Servicing Agreement (this “Agreement”) is made and entered into as of December 8,
2006, by and between First American Capital Corporation, a Kansas corporation (“FACC”), and Brooke
Corporation, a Kansas corporation (“BROOKE”).

WHEREAS, FACC desires to engage BROOKE to provide the Services (as defined below) to FACC
according to the terms and subject to the conditions set forth herein.

NOW THEREFORE, in consideration of the premises and the agreements, covenants and
representations herein contained, the parties hereto agree as follows:

	 	1.	 	The Services.

	 
	 	a.	 	BROOKE shall provide to FACC the services described in Exhibit A, Schedule of
Services, attached hereto (which services are hereinafter referred to as the “Services”).
BROOKE shall have no obligation to perform any services or have any obligations pursuant
to this Agreement, except as specifically set forth on Exhibit A, or otherwise
specifically set forth in this Agreement. BROOKE shall perform the Services in accordance
with all laws and its customary standards, policies and procedures in performing similar
obligations with respect to similarly situated third parties. BROOKE shall not be
required to expand its facilities, incur capital expenses, maintain the employment of any
specific personnel or employ additional personnel in order to provide the Services to
FACC. In providing the Services, BROOKE, as it deems necessary or appropriate in its
reasonable discretion, may use its personnel and/or employ the services of third parties
for the efficient performance of any of the Services. BROOKE shall notify FACC of any
event involving a disruption in the performance of the Services or any possible breach of
security potentially affecting information of FACC or its customers or the facilities of
FACC.

	 
	 	b.	 	FACC shall, in a timely manner, take all actions as may be reasonably necessary or
desirable to enable or assist BROOKE in the provision of the Services, including, but not
limited to, providing necessary information and specific written authorizations, consents
and signatures, and Brooke shall be relieved of its obligations hereunder to the extent
that FACC’s failure to take any such action renders performance by Brooke of such
obligations unlawful or impracticable.

2. Term. The term of this Agreement shall begin the date of this Agreement and
terminate on December 31, 2007, subject to the terms and provisions of Section 6 below.

 

 

 

	 	3.	 	Contract Sum.

	 
	 	a.	 	Fees. In consideration of the performance of the Services by BROOKE, FACC
shall pay to BROOKE the fees set forth in the Schedule of Fees attached hereto as
Exhibit B (the “Contract Sum”) at the times and in accordance with Exhibit
B. The Contract Sum shall be the sole compensation due BROOKE in connection with its
performance of the Services.

	 
	 	b.	 	Expenses. Unless otherwise agreed in writing, BROOKE shall be entitled to
reimbursement from FACC for out-of-pocket expenses incurred in the performance of the
Services unless BROOKE is specifically responsible for such amounts as set forth on the
Schedule of Brooke-Paid Expenses attached hereto as Exhibit C. BROOKE shall
provide to FACC an invoice setting forth any expenses to which it is entitled to
reimbursement under this Subsection 3b and payment of the invoice amount due shall be due
on or before the 20th calendar day after the date of the invoice.

	 
	 	c.	 	Third Party Fees and Expenses. Unless otherwise agreed in writing, FACC shall
be responsible for fees incurred in connection with retaining any additional independent
contractors, subcontractors, outside counsel, external accountant or auditors, internal
audit consultants, tax consultants and tax preparers, or other third parties in connection
with performing the Services. Such reasonable fees and expenses of such persons shall be
paid directly by FACC or, at BROOKE’s option, paid by BROOKE and reimbursed by FACC after
invoice in accordance with the reimbursement of expense provisions contained in Subsection
3b of this Agreement.

4. Events of Default by BROOKE. The following shall constitute “BROOKE Events of
Default” hereunder by BROOKE:

	 	a.	 	failure on the part of BROOKE duly to observe or perform in any material respect any
of the covenants or agreements on the part of BROOKE set forth in this Agreement which
continues unremedied for a period of ten (10) days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to BROOKE by
FACC (unless such failure is the result of FACC’s failure to observe or perform any of its
obligations hereunder, in which case BROOKE’s failure shall not constitute an event of
default); or

	 
	 	b.	 	a decree or order of a court or agency or supervisory authority having jurisdiction
in the premises in an involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law or appointing a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against BROOKE and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days; or

	 
	 	c.	 	BROOKE shall consent to the appointment of a trustee, conservator or receiver or
liquidator in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to BROOKE or of or relating to all or
substantially all of the property of BROOKE; or

 

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	 	d.	 	BROOKE shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations or take any action in furtherance of the
foregoing.

	 
	 	5.	 	Events of Default by FACC. The following shall constitute “FACC Events of
Default” hereunder by FACC:

	 
	 	a.	 	any failure by FACC to make any payment required to be made by FACC to BROOKE in
accordance with Section 3 of this Agreement; or

	 
	 	b.	 	any failure on the part of FACC duly to observe or perform in any material respect
any other of the covenants or agreements on the part of FACC set forth in this Agreement
or any governing document by and between FACC and BROOKE for the transactions being
serviced which continues unremedied for a period of ten (10) days after the date on which
written notice of such failure, requiring the same to be remedied, shall have been given
to FACC by BROOKE; or

	 
	 	c.	 	a decree or order of a court or agency or supervisory authority having jurisdiction
in the premises in an involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law or appointing a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against FACC and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days; or

	 
	 	d.	 	FACC shall consent to the appointment of a trustee, conservator or receiver or
liquidator in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to FACC or of or relating to all or
substantially all of the property of FACC; or

	 
	 	e.	 	FACC shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations or take any action in furtherance of the
foregoing.

	 
	 	6.	 	Remedies.

	 
	 	a.	 	Remedies of FACC. If a BROOKE Event of Default shall occur, FACC (i) may
terminate this Agreement by giving not less than ten (10) days prior written notice to
BROOKE, and (ii) shall be entitled to any and all other rights and remedies under law or
in equity.

	 
	 	b.	 	Remedies of BROOKE. If a FACC Event of Default shall occur, BROOKE (i) may
terminate this Agreement and any further obligations hereunder by giving not less than ten
(10) days prior written notice to FACC, and (ii) shall be entitled to any and all other
rights and remedies under law or in equity.

	 
	 	c.	 	Payment of Fees Upon Termination. Whether this Agreement is terminated
through Section 2 or Section 6, BROOKE shall be entitled to be paid any and all
fees and reimbursements which remain accrued and unpaid through the final date of the
rendering

 

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	 	 	 	of the Services. In addition, within five (5) business days after any termination, BROOKE
will return any of FACC’s materials used in performing the Services at FACC’s expense. The
terms and provisions of this Section 6(c) shall survive any termination of this Agreement.

	 	d.	 	Limitation of Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR
PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES. Additionally, FACC acknowledges
that BROOKE is merely providing a service for a fee under this Agreement. Accordingly,
BROOKE shall not be liable to FACC under this Agreement under any circumstances for any
amounts in excess of any fees paid to BROOKE hereunder. BROOKE MAKES NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER WITH RESPECT TO THE SERVICES AND FACC SPECIFICALLY DISCLAIMS ALL
IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. The terms and provisions of this Section 6(d) shall
survive any termination of this Agreement.

	 
	 	e.	 	Indemnification by FACC. FACC hereby agrees to indemnify and hold BROOKE and
its affiliates, officers, directors, agents and employees (collectively, the “BROOKE
Indemnitees”) harmless from and against any and all liabilities, losses, damages,
expenses, fines and penalties of any kind, including reasonable attorneys’ fees and
disbursements, incurred by the Brooke Indemnities as a result of any claim made against
any of the Brooke Indemnitees by any third party arising out of provision of the Services
(except to the extent, and only to the extent, of BROOKE’s liability to FACC provided in
Subsection 6(d) above).

7. Notices. No notice or other communication (other than invoices from BROOKE to FACC
pursuant to Subsection 3b of this Agreement) shall be deemed given unless sent in any of the
manners, and to the persons, specified in this Section. All notices and other communications
hereunder shall be in writing and shall be deemed given (a) upon receipt if delivered
personally (unless subject to clause (b)) or if mailed by registered or certified mail, (b) at
noon on the date after dispatch if sent by overnight courier or (c) upon the completion of
transmission (which is confirmed by telephone or by a statement generated by the transmitting
machine) if transmitted by telecopy or other means of facsimile which provides immediate or
near immediate transmission to compatible equipment in the possession of the recipient, in any
case to the parties at the following addresses or telecopy numbers (or at such other address or
telecopy number for a party as will be specified by like notice):

	 	 	 	 	 
	 

	 	If to FACC:
	 	First American Capital Corporation
	 

	 	 	 	1303 W. First American Place
	 

	 	 	 	Topeka, KS 66604
	 

	 	 	 	Attn: President
	 

	 	 	 	FAX: (785) 267-7079
	 
	 	 	 	 
	 

	 	If to BROOKE:
	 	Brooke Corporation
	 

	 	 	 	10950 Grandview Drive
	 

	 	 	 	Suite 600
	 

	 	 	 	Overland Park, Kansas 66210
	 

	 	 	 	Attn: President
	 

	 	 	 	Fax: (913) 339-6328

 

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Invoices issued by BROOKE pursuant to Subsection 3b of this Agreement shall be delivered by
hand delivery, regular mail, overnight courier, facsimile transmission or email transmission.

8. Independent Contractor. In its performance and completion of the Services and any
of its other duties and obligations under this Agreement, BROOKE shall at all times be deemed
to be an independent contractor and nothing in this Agreement shall at any time be construed so
as to create the relationship of employer and employee, principal and agent, partnership or
joint venture as between BROOKE and FACC. BROOKE shall have the entire charge, control and
supervision of its performance of the Services and any of its other duties and obligations
under this Agreement, subject to the terms and provisions of this Agreement and Exhibit
A hereto. Both parties acknowledge that they shall have no authority to bind the other
party to any contractual or other obligation whatsoever. The performance of the Services by
BROOKE or any of its affiliates shall not in any manner impair the absolute control of the
business operations of FACC by the board of directors of FACC.

9. Non-Exclusivity. Nothing contained in this Agreement shall be construed to provide
either party with exclusive rights. Without limitation, this Agreement shall not be construed
to preclude FACC from contracting with persons or entities other than BROOKE and its affiliates
to perform any of the services that constitute the Services.

10. Confidentiality. Each party (the “Receiving Party”) agrees and acknowledges that,
except to the extent permitted herein, all information and data supplied by the other party
(the “Disclosing Party”) regarding its matters, systems, procedures, assets, customers or
operations shall be held in strict confidence at all times and the Receiving Party will not
disclose or otherwise divulge any of such information to any party without the prior written
consent of the Disclosing Party, provided, however, that the Receiving Party shall be
authorized to disclose such information (i) to any of its directors, members, officers,
employees, representatives, accountants, auditors, attorneys and agents and to any of its
affiliates, subsidiaries and parents and any of their respective directors, members, officers,
employees, representatives, accountants, auditors, attorneys and agents to the extent any of
them have a need to know such information to perform services hereunder and only for such
purpose and agree in writing to keep such information confidential (collectively referred to
herein as “Receiving Party’s Representatives”); (ii) to any government agency with jurisdiction
over the Receiving Party or the Receiving Party’s Representatives or the transaction
contemplated herein; (iii) as may be required by law or regulation, judicial or administrative
order, ruling or judgment or legal obligation to disclose (which may include, by way of example
and not by way of limitation, any discovery or disclosure demands or requirements issued or
arising in any judicial or administrative investigation or proceeding); (iv) if it is advised
in writing by its counsel that its failure to do so would be unlawful, or (v) if
failure to do so would expose the Receiving Party to loss, liability, claim or damage for which
it has not been adequately indemnified to its satisfaction. The terms and provisions of this
Section 10 shall survive any termination of this Agreement.

11. Governing Law. This Agreement and the respective rights and obligations of the
parties hereto shall be governed by and construed in accordance with the laws of the State of
Kansas, without regard to its conflicts of laws provisions.

12. Successors and Assigns. This Agreement and the terms, covenants, provisions and
conditions hereof shall be binding upon, and shall inure to the benefit of, the respective
heirs, successors and assigns of the parties hereto; provided, however, that neither party
shall assign

 

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this Agreement, or otherwise dispose of all or any portion of its rights, interests or
obligations hereunder, to any person or entity without the prior written consent of the other
party. There shall be no third party beneficiaries to this Agreement. This Agreement is not
intended to confer on any person other than the parties hereto and their successors and
permitted assigns any rights, obligations, remedies or liabilities.

13. Severability. If any provision of this Agreement is held to be invalid or
unenforceable, then, to the extent that such invalidity or unenforceability shall not deprive
either party of any material benefit intended to be provided by this Agreement, the remaining
provisions of this Agreement shall remain in full force and effect and shall be binding upon
the parties hereto.

14. Entire Agreement; Modification. This Agreement and the exhibits and schedules
attached hereto embody the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersede all prior and contemporaneous agreements and
understandings, oral or written, relating to said subject matter. Any exhibits to this
Agreement are hereby incorporated into this Agreement in their entirety by this reference. This
Agreement and the exhibits hereto may be amended, modified and/or supplemented only by the
written and executed agreement of BROOKE and FACC.

15. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original and all of which shall
together constitute one and the same agreement.

16. Headings. The headings of the Sections contained in this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this Agreement or
any provision hereof.

17. Waiver. All remedies available to either party for one or more breaches by the
other party are and shall be deemed cumulative and may be exercised separately or concurrently
without waiver of any other remedies. No party hereto shall be deemed to have waived any
right, power or privilege under this Agreement unless such waiver shall have been expressed in
a written instrument signed by the waiving party. The failure of any party hereto to enforce
any provision of this Agreement shall in no way be construed as a waiver of such provision or a
right of such party to thereafter enforce such provision or any other provision of this
Agreement.

18. Construction. Unless the context of this Agreement otherwise clearly requires, (i)
references in this Agreement to the plural include the singular, the singular the plural, the
masculine the feminine, the feminine the masculine and the part the whole and (ii) the word
“or” will not be construed as exclusive and the word “include,” “including” or similar terms
shall be construed as if followed by the phrase “without being limited to.”

19. Mediation. Any issue, claim, dispute or controversy that may arise out of or in
connection with, or relating to this Agreement (including exhibits and addenda) and/or the
relationship of the parties, and which the parties are not able to resolve themselves by
negotiation, shall be submitted to mediation in a manner agreed to by the parties. The parties
agree to use mediation to attempt to resolve such issue, claim or dispute prior to filing any
arbitration action, lawsuits, complaints, charges or claims. The parties will select an
independent mediator agreeable to both parties. The mediator will communicate with the parties
to arrange and convene the mediation process that will be most efficient, convenient and
effective for both parties. The costs of the mediation and fees of the mediator will be

 

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borne equally by the parties. The parties will cooperate with the mediator in coming to a
reasonable agreement on the mediation arrangements which will include the time and place for
conducting the mediation, who will attend or participate in the mediation and what information
and written material will be exchanged before the mediation. The mediation will be conducted
in Kansas.

20. Arbitration. Any issue, claim, dispute or controversy that may arise out of, in
connection with or relating to this Agreement (including exhibits and addenda) and/or the
relationship of the parties, and which the parties are not able to resolve through mediation,
shall be settled by arbitration administered by the American Arbitration Association under its
Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be
entered in a court having jurisdiction thereof. The parties agree to use arbitration to
resolve any such issue, claim, dispute or controversy prior to and in lieu of filing any
lawsuits, complaints, charges or claims. The costs of the arbitration and fees of the
arbitrator(s) will be borne equally by the parties.

(signature page follows)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first above written.

	 	 	 	 	 
	 	 	FIRST AMERICAN CAPITAL CORPORATION (“FACC”)
	 
	 	 	 	 
	 	 	/s/ John F. Van Engelen
	 	 	 
	 

	 	By:
	 	John F. Van Engelen
	 

	 	Title:
	 	President and Chief Executive Officer

	 	 	 	 	 
	 	 	BROOKE CORPORATION (“BROOKE”)
	 
	 	 	 	 
	 	 	/s/ Anita Larson
	 	 	 
	 

	 	By:
	 	Anita Larson
	 

	 	Title:
	 	President and Chief Operating Officer

 

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EXHIBIT A

Schedule of Services

BROOKE shall perform the following services:

Human resources services

	•	 	Coordinate employee recruiting activities

	 
	•	 	Develop and maintain relationship with Internet recruiting services

	 
	•	 	Assist in employee relations and retention

	 
	•	 	Provide manager counseling and advisory services

	 
	•	 	Conduct employee investigations

	 
	•	 	Maintain personnel files

	 
	•	 	Assist in the design and implementation of human resources policies and procedures

	 
	•	 	Monitor changes in employment practices laws

	 
	•	 	Implement practices to reduce employment practice liability exposures

	 
	•	 	Investigate and work to resolve employee relation issues and complaints

	 
	•	 	Consult with managers regarding personnel issues

	 
	•	 	Design and conduct management training with respect to employment practices issues

	 
	•	 	Assist in evaluation and discipline process

	 
	•	 	Assist in termination process (e.g. exit interviews, pre and post termination consultations with
management);

	 
	•	 	Manage and assist in preparation of job descriptions

	 
	•	 	Assist in compliance with applicable laws

	 
	•	 	Coordinate third-party training

	 
	•	 	Assist in preparation of employment agreements and forms

	 
	•	 	Provide benefit administration and communication

	 
	•	 	Assist in the design and selection of benefit packages and providers

	 
	•	 	Conduct salary surveys

	 
	•	 	Manage performance evaluation process

	 
	•	 	Manage FMLA and leave of absence policies and procedures

	 
	•	 	Provide workers compensation administration and OSHA reporting

Payroll Accounting

	•	 	Payroll processing

	 
	•	 	Solve problems concerning payroll and enforce payroll policies.

	 
	•	 	Compile payroll data such as garnishments, vacation time, insurance and retirement plan deductions.

	 
	•	 	Administer time and attendance system for accuracy and completeness

	 
	•	 	Process weekly transfer of payroll data to ADP or other third-party payroll service provider

	 
	•	 	Provide applicable state and federal wage and hour compliance services

	 
	•	 	Prepare reports for management (gross payroll, hours worked, vacation accrual, tax deductions, benefit deductions,
etc.)

	 
	•	 	Provide access to payroll service provider

	 
	•	 	Respond to employee questions

	 
	•	 	Process payroll deductions

	 
	•	 	Determine if vendor charges for benefits are accurate

 

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Legal Services

	•	 	Assist with dispute resolution and litigation relating to employment and general corporate matters

	 
	•	 	Assist in the development and maintenance of FACC policies

	 
	•	 	Assist with problem resolution

	 
	•	 	Negotiate, draft, review, revise, interpret, enforce and terminate contracts

	 
	•	 	Coordinate responses to consumer and regulatory complaints and investigations

	 
	•	 	Assist with corporate governance

	 	•	 	FACC and subsidiary corporate secretary services

	 
	 	•	 	Coordinate distribution of information to Board of Directors and Board Committees

	 
	 	•	 	Schedule Board and Committee meetings

	 
	 	•	 	Coordinate Board and Board Committee education

	 
	 	•	 	Maintain FACC governance books and records

	•	 	Intellectual property assistance

	 	•	 	Seek and maintain service marks and trademark registrations

	 
	 	•	 	Seek and maintain patents

	•	 	Securities compliance

	 	•	 	Coordinate and compile reports and other filings required to be filed by FACC pursuant
to federal or state securities laws

	 
	 	•	 	Coordinate and prepare stock exchange listing applications and prepare reports,
certifications, notices and other filings required by applicable stock exchange rules

	 
	 	•	 	Coordinate and assist directors and officers with Section 16 and other insider trading
compliance

Accounting, Tax and Auditing Services

	•	 	Consolidate subsidiary accounting information into FACC’s financial statements

	 
	•	 	Work with FACC’s operations personnel to get information required for accounting purposes

	 
	•	 	Coordinate FACC’s internal audit activities

	 
	•	 	Facilitate and collaborate work of consultants and others hired to assist with FACC internal audit process

	 
	•	 	Coordinate audit activities with external auditors

	 
	•	 	Facilitate and collaborate work for external auditors

	 
	•	 	Coordinate budget preparation

	 
	•	 	Coordinate preparation of income tax returns, property tax returns and other tax reports and returns by
external tax professionals

	 
	•	 	Track fixed assets

	 
	•	 	Coordinate preparation of financial information for state statutory filings and SEC and any stock exchange
reports and filings

	 
	•	 	Assist with the establishment or enhancement of processes, controls, procedures and methods pertaining to
financial reporting

Risk Management Services

	•	 	Provide or assist in procuring insurance

	 
	•	 	Provide information about insurance policies

Corporate Marketing Services

	•	 	Develop, coordinate, track and release press releases

	 
	•	 	Develop, design and coordinate corporate identity, FACC message and public relations

	 
	•	 	Coordinate trademark protection, trade name protection and logo usage

 

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EXHIBIT B

Schedule of Fees

FACC shall pay the following fees to BROOKE:

A fee of $5,000 for each calendar month during the term of this Agreement, with each payment for a
calendar month due on or before the last day of such calendar month. If the Servicing Agreement
becomes effective on a day other than the first day of a calendar month, or if the Servicing
Agreement terminates on a day other than the last day of a calendar month, the fee for such month
shall be prorated based on the number of days in the month during which the Agreement is effective.
Monthly payments shall be due and payable by FACC in accordance with this Schedule of Fees without
invoice or advance notice of payment obligation from BROOKE.

 

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EXHIBIT C

Schedule of Brooke-Paid Expenses

BROOKE shall be responsible for the following expenses:

Recruitment expenses (e.g. Career Builders, Monster.com, etc.)

Third-party administrator expenses for any employee benefit plans in which BROOKE and FACC are both employer participants

Third-party payroll processing service expenses

 

12exv10w9

 

Exhibit 10.9

EMPLOYMENT AGREEMENT

THIS AGREEMENT MADE AND ENTERED INTO THIS 8th day of December, 2006, by and between First American
Capital Corporation, a Kansas corporation (“Employer”), and John F. Van Engelen (“Employee”), is as
follows:

SUBJECT MATTER OF EMPLOYMENT

Employer has and does, hereby employ Employee under this Employment Agreement, effective on the
date of this Agreement, notwithstanding the date such Agreement is signed by either Employer or
Employee, to carry out the duties and responsibilities of the office of President of First Life
America Corporation, a direct wholly owned subsidiary of Employer (“FLAC”), to serve as FLAC’s
principal executive officer, to implement the policies and strategic goals established by FLAC’s
Board of Directors and to perform such other duties and responsibilities as assigned by FLAC’s
Board of Directors. Employee hereby accepts employment by Employer and agrees to serve as
President of FLAC, subject to the terms of this Employment Agreement.

Employer and Employee agree that, in connection with Employee’s services hereunder, Employee may
from time to time provide a limited number of services designed to benefit FLAC to Employer or to
an affiliate of Employer (“Affiliate”) that directly, or indirectly through one on more
intermediaries, controls, or is controlled by, or is under common control with Employer and that
any performance of services for an Affiliate shall be considered the performance of services under
this Agreement and subject to the terms of this Agreement. Employee shall report to the Board of
Directors of FLAC.

The Employee’s title, duties, responsibilities, job description and reporting relationship may not
be revised by Employer or Employee unless agreed in a writing executed by Employer and Employee,
such written and executed writing to constitute an amendment to this Agreement.

COMPENSATION, BENEFITS AND EXPENSE REIMBURSEMENT

Employer agrees to pay to Employee base salary at the annual rate of One Hundred Forty Four
Thousand and Eight Hundred Dollars ($144,800). The reference to base salary at an annual rate in
this Agreement shall not entitle Employee to payment of salary beyond any salary earned through
Employee’s performance of services under this Agreement through the date of any termination of
Employee’s employment and/or this Agreement. The base salary will be reviewed periodically for
adjustment by Employer, and, if adjusted, such adjusted amount will become the base salary for
purposes of this Agreement.

Employee shall continue to be eligible to receive payment of the performance bonus (the
“Performance Bonus”) described in Section 5(a) of his Employment Agreement dated July 1, 2006 (the
“July Agreement”) with Employer, solely with respect to the employment term stated in such July
Agreement and in accordance with the provisions of

 

 

 

such Section 5(a). Upon any termination of Employee’s employment under this Agreement, Employer
shall, within, 30 days after such termination, pay to Employee any such Performance Bonus accrued
but yet not paid as of the date of employment termination plus the amounts due under Section 4(a)
of the July Agreement. If, (a) on or after the date of this Agreement (which Employer and
Employee agree is the closing date with respect to the Stock Purchase and Sale Agreement between
Employer and Brooke Corporation (“Brooke”) relating to FACC’s sale, and Brooke’s purchase, of FACC
common stock), but before June 30, 2007, Employer terminates Employee’s employment under this
Agreement without “Cause” or (b) on or after January 1, 2007, but before June 30, 2007, Employee
resigns, then, on the effective date of such termination by Employer without “Cause” or resignation
by Employee, Employer shall pay to Employee a lump sum payment equal to One Hundred Forty Four
Thousand and Eight Hundred Dollars ($144,800), subject to all applicable withholdings and payroll
taxes. For purposes of this paragraph, “Cause” means (i) Employee is convicted of a felony
involving actual dishonesty as against Employer or (ii) Employee, in carrying out his duties and
responsibilities under this Agreement, voluntarily engages in conduct which is demonstrably and
materially injurious to Employer, unless such act, or failure to act, was believed by Employee in
good faith to be in the best interests of Employer. After June 30, 2007, in the event Employer
shall terminate Employee’s employment for any reason, Employer shall pay to Employee within thirty
(30) days after such termination an amount equal to three (3) months of base salary at the annual
rate specified in this Agreement, subject to all applicable withholdings and payroll taxes. The
provisions of this paragraph shall not in any manner (w) constitute an extension or amendment to
the July Agreement, (x) affect the supersedure of such July Agreement by this Agreement, (y)
restrict Employer’s ability to terminate Employee’s employment hereunder with or without cause, or
(z) otherwise affect the at will employment of Employee under this Agreement.

Employee shall be eligible to participate in any other short-term or long-term bonus or incentive
compensation plans, programs or arrangements as are designated by the Employer at its sole
discretion for participation by Employee. Employee will be advised of any terms and performance
criteria relating to any such plans, programs or arrangements and any participation by Employee in
any such plans, programs or arrangements shall not require a written amendment to this Agreement.

During Employee’s employment under this Agreement, Employer shall provide to Employee at Employer’s
expense, a $2,000 annual educational reimbursement fund, use of a laptop computer and a cellular
telephone.

Employer further agrees to grant Employee certain other benefits as specified in the personnel
policies established from time to time by Employer and subject to the discretionary authority given
to any applicable benefit plan administrators. Employer’s personnel policies may be changed from
time to time by Employer without requiring a written amendment to this Agreement.

 

2

 

Employer further agrees to reimburse Employee for reasonable expenses incurred while carrying out
the duties assigned by Employer to Employee. Employee agrees to comply with Employer’s expense
reimbursement policies. At Employer’s option, Employee may be provided with a corporate credit card
for use in connection with the payment of travel and other employment-related expenses incurred in
the performance of Employee’s duties under this Agreement. Employee agrees to comply with any
policies of Employer applicable to corporate credit card use. Employer, at its sole discretion,
shall have the right to terminate the credit card program or revoke Employee’s corporate credit
card privileges at any time for any reason. Upon any such termination of the program, revocation of
privileges, or termination of Employee’s employment, Employee agrees to promptly return the
corporate credit card to Employer.

ADDITIONAL OBLIGATIONS OF EMPLOYEE

Employee agrees to be bound by and comply with the rules and policies (including Employer’s
interpretations and clarifications thereof) set forth in the First American Capital Corporation And
Subsidiaries Employee Manual or otherwise established or amended from time to time by Employer.

During and subsequent to Employee’s employment under this Agreement, Employee shall respect the
confidentiality of trade secrets, confidential information, know-how, designs, business plans,
marketing plans, strategies, budgets, projections, financial results, acquisition and divestiture
plans and considerations, software, databases, insurance brokerage file information, loan brokerage
file information, client or customer file information, customer lists, customer leads, contacts,
referrals, customer insurance policies, insurance policy quotes, applications and expiration dates,
customer and potential customer credit and/or background reports, insurance company contracts,
pricing and commission information, information regarding products, services, processes, personnel
changes, directors, employees, agents, brokers, producers, franchisees of Affiliates, annuities,
investors in annuities, plan sponsors and participants, insurance companies, suppliers, managing
general agents, consulting services, borrowers, lenders, collateral, collateral preservation, loan
sales, and purchasers of loans, and employment file information owned, controlled by, or pertaining
to Employer, Affiliates, the franchise agents of any Affiliates, the agents, brokers or producers
through whom or which Employer sells insurance and annuity products and services to customers, and
independent agents of Employer or any Affiliates (collectively such Employer, Affiliates, franchise
agents, brokers, producers and independent agents shall be referred to as “Protected Parties” and
all such information shall be referred to as the “Protected Information”). Protected Information
shall not include any information regarding annuity products developed or possessed by Employee
prior to his employment by Employer in February 2004 which does not specifically include, and is
separable from, information about Employer or any of its Affiliates, and provided that the
exclusion of any such information regarding annuity products from Protected Information shall not
(a) preclude or restrict any use of such information by any of the Protected Parties at any time or
the generation of good will from such information in the respective businesses of any of the
Protected Parties, nor (b) require at any time any of the Protected Businesses to pay to

 

3

 

Employee any license fee or other compensation for such use by the Protected Parties. Except in
furtherance of Employee’s duties and responsibilities under this Agreement in the normal course of
FLAC’s business, Employee shall not remove any lists or reports containing any Protected
Information from premises or electronic databases owned, rented or used by Employer or any of the
other Protected Parties without the express written consent of Employer. Employee shall not sell or
trade any Protected Information or information pertaining to any Protected Information obtained as
a result of (1) access to Employer’s or any of the other Protected Parties’ files, records,
manuals, handbooks, documentation, data, directors, officers, employees, agents, premises,
computers, or electronic databases, or (2) business conducted by Employee for Employer or any of
the other Protected Parties. Employee agrees that all Protected Information and all good will
associated with, or generated by, such Protected Information remain the exclusive property of
Employer or one or more of the Protected Parties, as the case may be.

Except as Employer otherwise consents in advance in writing, Employee shall not disclose or make
any use of, except for the benefit of FLAC or Employer, at any time either during or subsequent to
Employee’s employment, any Protected Information of Employer or any other Protected Party, or any
matter pertaining to any business of Employer or any of the other Protected Parties or any of their
customers, which Employee produces, obtains or otherwise acquires during the course of Employee’s
employment, except as herein provided. Except (a) in furtherance of Employee’s duties and
responsibilities under this Agreement in the ordinary course of FLAC’s business, and provided that
the third party agrees in writing to keep the applicable Protected Information confidential, or (b)
as is required to be disclosed (but only to the extent of such requirement) in a judicial or
administrative proceeding after all reasonable legal remedies for maintaining such Protected
Information in confidence have been exhausted, including, but not limited to, Employee giving
Employer as much advance notice as possible of the possibility of such disclosure or Employer
obtaining a protective order concerning such disclosure, Employee agrees not to deliver, reproduce
or in any way allow any Protected Information, or any documentation relating thereto, to be
delivered or used by any third parties without specific direction and consent of Employer.

In the event of Employee’s termination of employment with Employer for any reason whatsoever,
Employee agrees to promptly surrender and deliver to Employer all records, manuals, materials,
equipment, documents and data of any nature, and stored or possessed in any form or manner,
pertaining to any program or Protected Information of Employer or any of the other Protected
Parties, or any of their customers, which Employee produces or obtains during the course of his
employment or otherwise.

TERMINATION OF EMPLOYMENT

The relationship between Employer and Employee is an employment at will and nothing in this
Agreement shall eliminate, reduce or impair the right of either party to terminate the employment
relationship at any time for any reason. Termination of employment shall constitute termination of
this Agreement unless the parties mutually agree in writing otherwise.

 

4

 

Except with respect to any obligation of Employer to pay any accrued but not yet paid Performance
Bonus or amounts described in Section 4(a) of the July Agreement, as defined above, after any
termination of employment hereunder, any obligation by Employer to pay to Employee performance
bonuses or other bonus or incentive compensation, if any, shall cease upon termination of this
Agreement.

Obligations and provisions of this Agreement that, by their express terms or otherwise, require
performance or compliance by one or both parties hereto after termination of this Agreement,
including, but not limited to, obligations to return property, confidentiality of information,
covenants not to solicit, the covenant not to compete, waiver, the binding nature of this Agreement
upon the parties, successors, assigns, heirs, executors and administrators, the government and
construction of this Agreement, and the invalidity or non-enforceability of Agreement provisions,
shall survive termination of the Agreement.

COVENANTS NOT TO SOLICIT OR COMPETE

During the term of Employee’s employment by Employer and for two (2) years after termination of
such employment, Employee agrees that Employee will not, without the prior written consent of
Employer, directly or indirectly, whether as an employee, officer, director, independent
contractor, consultant, stockholder, partner or otherwise, engage in or assist others to engage in
or have any interest in any business which directly competes with FLAC in any geographic area in
which FLAC markets its products during the year preceding termination, subject to the following
exceptions: This provision shall not be binding upon Employee (i) in those geographic areas in
which FLAC’s annual direct premium income as measured in the calendar year preceding termination
constitutes less than 25 percent of FLAC’s total annual direct premium income during that year; and
(ii) in respect to the business of annuities, health and disability insurance, and pension
products, either individual or group.

Employee agrees that during the term of Employee’s employment and for two (2) years after the
termination of such employment, Employee will not induce or attempt to induce any person who is an
employee of Employer to leave the employ of Employer and engage in any business which competes with
Employer. This provision shall not apply to those employees with whom Employee had a business
relationship prior to February of 2004.

The parties agree and acknowledge that the time, scope and geographic area and other provisions of
this agreement have been specifically negotiated by the parties, and Employee specifically agrees
that such time, scope and geographic areas, and other provisions are reasonable under these
circumstances. Employee further agrees that if, despite the express agreement of the parties to
this agreement, a court should hold any portion of this agreement unenforceable for any reason, the
maximum restrictions of time, scope and geographic area reasonable under the circumstances, as
determined by the court, will be substituted for the restrictions held unenforceable.

 

5

 

MISCELLANEOUS

This Agreement supersedes and takes precedence over the July 1, 2006 Agreement and any and all
prior agreements, arrangements or understandings between Employer or any one or more Affiliates and
the Employee relating to employment of Employee and any other subject matter hereof.

No oral understanding, oral statement, or oral promises or oral inducements exist between the
parties.

The waiver by Employer of any breach of any provision of this Agreement by Employee shall not
operate or be construed as a waiver of any subsequent breach by the Employee.

Any notice required or permitted to be given under this Agreement shall be sufficient if in
writing, and if hand delivered or sent by regular mail to Employee’s residence (in the case of
notice to Employee) or to Employer’s principal office (in the case of notice to the Employer).

The rights and obligations of Employer under this Agreement shall inure to the benefit of and shall
be binding upon the successors and assigns of Employer. This Agreement shall inure to the benefit
of and shall be binding upon Employee and, where applicable, the heirs, executors, assigns and
administrators of Employee or Employee’s estate and property.

Employer may assign this Agreement by providing Employee notice of Employer’s decision to do so.
Employee may not assign or transfer to others the obligation to perform Employee’s duties
hereunder.

This Agreement may not be modified, revised, altered, added to, extended in any manner, or
superseded other than by an instrument in writing signed by both of the parties hereto.

THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF KANSAS.

Therefore, for good and valuable consideration, the receipt and sufficiency of which is
acknowledged by the parties, Employer, Employee and FLAC have duly executed this Employment
Agreement on the date(s) set forth below their respective signatures.

 

6

 

	 	 	 	 	 	 	 
	 	 	 	 	FIRST AMERICAN CAPITAL
	 	 	 	 	CORPORATION (“EMPLOYER”):
	 
	 	 	 	 	 	 
	/s/ Leah E. Kraft

	 	 	 	By:
	 	/s/ Harland E. Priddle
	 

	 	 	 	 	 	 
	Witness
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	12/08/2006
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	EMPLOYEE:
	 
	 	 	 	 	 	 
	/s/ Amy Cline	 	 	 	/s/ John Van Engelen
	 	 	 	 	 
	Witness	 	 	 	John F. Van Engelen
	 
	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	12-8-2006
	 

	 	 	 	 	 	 

 

7

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