Document:

Exhibit
10.2

 

AGREEMENT

 

This
AGREEMENT (the “Agreement”), dated as of August 4, 2017, by and between One Horizon Group, Inc., a Delaware corporation,
with an office at 34 South Molton Street, London W1K 5RG, UK (the “Company”), and Mark White (“White”).

 

R
E C I T A L S:

 

White
is the record and beneficial owner of one hundred seventy thousand, nine hundred forty (170,940) shares of Series A Preferred
Stock (the “Preferred Shares”) of the Company.

 

The
Company desires to acquire the Preferred Shares, and in furtherance thereof, has offered to issue to White 4,000,000 shares of
common stock of the Company (the “Common Shares”) and a promissory note of the Company in the initial principal amount
of $500,000 (the “Company Note”) bearing interest at the rate of 7% per annum and payable in full on August 31, 2019,
in exchange for the Preferred Shares, and White is willing to exchange the Preferred Shares for the Common Shares and the Company
Note on the terms and subject to the conditions set forth herein (the “Exchange”).

 

NOW,
THEREFORE, the Company and White hereby agree as follows:

 

1.           Exchange; Closing. On the terms and subject to the conditions of this Agreement:

 

1.1         White
agrees to assign, transfer and deliver the Preferred Shares to the Company, free and clear of all liens, pledges, encumbrances,
charges, restrictions or known claims of any kind, nature, or description, and the Company hereby agrees to issue to White the
Common Shares, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature,
or description, and the Company Note in the form agreed upon.

 

1.2         The
closing of the exchange contemplated hereby shall take place at the offices of counsel to the Company no later than five (5) days
after the receipt of such approval from the shareholders of the Company, if any is required by the rules of NASDAQ, or within
five (5) days of a determination by the Company that such approval is not required or at such other place and time mutually agreed
to by White and the Company (the “Closing Date” or “Closing”), but in no event later than December 30,
2017 (the “Final Date”).

 

1.3         The issuance of the Common Shares is subject to the Rules and Regulations of the NASDQ OMX Market which limit the number of shares
the Company may issue to no more than an aggregate of 19.99% of the number of shares outstanding on the Closing Date (the “Exchange
Cap”) unless the Company obtains the approval of its stockholders or otherwise determines that such approval is not required.
Promptly after the date hereof the Company shall take such actions as are available to it to cause the issuance of Common Shares
pursuant to the terms hereof to be exempt from or otherwise not subject to the Exchange Cap, including, without limitation, (i)
calling a meeting of its stockholders at which they consider a proposal to approve the issuance provided for herein and in anticipation
of which the Company solicits proxies to enable it to vote in favor of such issuance on behalf of its stockholders; (ii) if the
same can be accomplished without violation of the applicable securities laws and the rules and regulations of the NASDAQ OMX Market,
arranging for the execution of written consents by the holders of a sufficient number of its outstanding shares of Common Stock
to permit the issuance of Common Stock in excess of the Exchange Cap upon exercise of the rights granted herein and (iii) file
a proxy statement or information statement, as appropriate, with the U. S. Securities and Exchange Commission (the “SEC”)
and use all reasonable efforts to have such proxy statement or information statement cleared by the SEC. Prior to a determination
by the Company that the Exchange Cap is not applicable or receipt of the consent of the Company’s shareholders, at the request
of White, the Company will issue to White (i) such number of Common Shares up to 19.5% of the number of shares of common stock
then outstanding against delivery of the number of Preferred Shares equal to the product obtained by multiplying 170,940 by a
fraction, the numerator of which is the number of Common Shares to be issued to White and the denominator of which is 4,000,000
and (ii) such principal amount of the Company Note as is obtained by multiplying $500,000 by a fraction, the numerator of which
is the number of Common Shares to be issued to White and the denominator of which is 4,000,000. The balance of the exchange shall
take place no later than five (5) days after receipt of shareholder approval or a determination that such approval is not necessary.

 

     

     

    

 

1.4         At the Closing, and as a condition thereto, White will deliver a certificate for the Preferred Shares together with a stock power
duly executed for transfer to the Company and the Company shall deliver to White a certificate representing the Common Shares
and the Company Note in the name of White or such other name as he shall direct.

 

2.           White’s Representations and Warranties. White represents and warrants that as of the date hereof and as of the Closing
Date:

 

(a)       He is the beneficial owner of the entirety of the Preferred Shares;

 

(b)       He is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D;

 

(c)       He understands that the issuance of the Common Shares is being made in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and
White’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of White set forth
herein in order to determine the availability of such exemptions and the eligibility of White to acquire the Common Stock absent
registration under the Securities Act of 1933, as amended;

 

(d)       He has the legal capacity to enter into and perform his obligations under this Agreement. This Agreement shall constitute the
legal, valid and binding obligations of White enforceable against him in accordance with its terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

    2 

     

    

 

3.            Representations and Warranties of the Company. The Company represents and warrants to White that as of the date hereof:

 

(a)        The Company is duly organized and validly existing and in good standing under the laws of the jurisdiction in it was formed, and
has the requisite power and authorization to own properties and carry on its business as now being conducted and as presently
proposed to be conducted. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and to issue the Common Shares and the Company Note in accordance with the terms hereof and thereof. Upon issuance,
the Common Shares shall be duly issued and non-assessable. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby, have been duly authorized by the Company’s Board of Directors
and no further filing, consent, or authorization is required by the Company, its Board of Directors or its shareholders. This
Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies.

 

(b)        The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of the Articles of Incorporation or Bylaws of the Company, any memorandum
of association, certificate of incorporation, certificate of formation, bylaws, any certificate of designations or other constituent
documents of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company is a party, or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree, including federal and state securities laws and regulations, and the rules and regulations of NASDAQ.

 

4.            Miscellaneous.

 

(a)        The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

(b)        All notices, requests, demands and other communications which are required to be or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered in person or after dispatch by recognized overnight courier
to the party to whom the same is so given or made:

 

If
to White, to White c/o: Eaton & Van Winkle LLP, 3 Park Avenue, 16th floor, New York, NY 10016, Attn: Vincent J.
McGill, Esq. Phone: (212) 561-3604 (Direct);

 

If
to the Company, to its address set forth on the signature page hereto.

 

    3 

     

    

 

(c)        If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

(d)        This Agreement, and the rights and obligations of the parties hereto under this Agreement, shall be governed by, construed and
enforced in accordance with the laws of the State of New York, without giving effect to the choice of law principles thereof.
Any action arising out of the breach or threatened breach of this Agreement shall be commenced in a proper New York State court
and each of the parties hereby submits to the jurisdiction of such courts for the purpose of enforcing this Agreement.

 

(e)        This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

 

IN
WITNESS WHEREOF, White and the Company have executed this Agreement as of the date first written above.

 

	 	One Horizon Group, Inc.	 	 	 
	 	 	 	 	 	 
	 	By:	/s/Martin
    Ward	 	/s/
    Mark White	 
	 	 	An Authorized
    Party	 	Mark White	 

 

    4ex10-26.htm

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT 

 

This Amended and Restated Employment Agreement (this "Agreement") is entered into this date, by and between FIRST TRINITY FINANCIAL CORPORATION, an Oklahoma corporation ("Company") and Gregg Zahn ("Employee") 

 

Whereas, Company desires to continue to employ Employee as its President and Chief Executive Officer of the Company and its subsidiaries; and 

 

Whereas, Employee desires to continue in such positions; 

 

The parties agree to the following:

 

Definitions

 

          In this Agreement, unless something in the subject matter or context is inconsistent therewith:

“Affiliate” includes each direct and indirect subsidiary of the Company and any other entities controlled by, controlling or under common control with the Company.

 

“Agreement” means this agreement, including its recitals and schedules, as amended from time to time. 

 

“Base Salary” has the meaning attributed to such term in Section 3-a.

 

“Board” means the board of directors of the Company in office from time to time.

 

“Bonus” has the meaning attributed to such term in Section 3-b.

 

“Business” means all the business and activities from time to time carried on by the Company and its Affiliates.

 

“Cause” The Board may terminate the Employee's employment for Cause following the Employee’s (i) intentional neglect that jeopardizes the life or property of another, (ii) intentional wrongdoing or malfeasance, (iii) intentional violation of a business related law; or (iv) failure to perform his duties under this Agreement after the Board has delivered to the Employee written notice which specifically identifies the manner in which the Board believes he is not performing his duties. No such action or inaction by the Employee shall be treated as Cause unless, in the case of clauses (i), (ii) or (iii) it has a material adverse effect on and is demonstrably injurious to the Company and, in the case of clauses (i) through (iv), it is not cured by the Employee, or cannot be cured, within sixty (60) days after written notice from the Board to the Employee thereof. The Employee may only be terminated for Cause upon a resolution of a majority of the Board (and, following a Change in Control, greater than 3/4 of the Board) after the Employee has been given the reasonable opportunity to be heard before the Board with counsel present. 

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

“Change in Control” shall be deemed to occur on:

 

	
 
	
(a)
	
the date of the acquisition of securities of the Company (including securities convertible into shares of common stock of the Company (“Common Shares”) and/or other securities of the Company ("Convertible Securities")) as a result of which a person or group (an "Acquirer") owns beneficially Common Shares or other securities of the Company and/or Convertible Securities such that, assuming the conversion of Convertible Securities owned beneficially by the Acquirer but not by any other holder of Convertible Securities, the Acquirer would own beneficially (i) not less than 50% of the Common Shares or (ii) shares which would entitle the holders thereof to cast not less than 50% of the votes attaching to all shares in the capital of the Company which may be cast to elect directors of the Company; or

 

	
 
	
(b)
	
the date upon which the following two conditions shall have been satisfied:

 

	
 
	
(i)
	
the acquisition ("Acquisition of Control") of securities of the Company (including Convertible Securities) as a result of which an Acquirer owns beneficially Common Shares or other securities of the Company and/or Convertible Securities such that, assuming the conversion of Convertible Securities owned beneficially by the Acquirer but not by any other holder of Convertible Securities, the Acquirer would own beneficially (A) not less than 25% of the Common Shares or (B) shares which would entitle the holders thereof to cast not less than 25% of the votes attaching to all shares in the capital of the Company which may be cast to elect directors of the Company; and

 

	
 
	
(ii)
	
within two years after the Acquisition of Control, a majority of the Board consists of individuals who were not directors of the Company before the Acquisition of Control; or

 

	
 
	
(c)
	
the date upon which the following two conditions shall have been satisfied:

 

	
 
	
(i)
	
the occurrence of (A) an amalgamation or merger of the Company with any other corporation (other than an Affiliate), (B) any other business combination or consolidation, (C) a plan for the liquidation of the Company, or (D) the sale or disposition of all or substantially all of the assets of the Company (a "Corporate Reorganization"); and

 

	
 
	
(ii)
	
within two years following a Corporate Reorganization, a majority of the board of directors of the amalgamated or merged entity or successor entity into which the Company was liquidated or which acquired substantially all of the assets of the Company consists of individuals who were not directors of the Company immediately before the Corporate Reorganization;

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

“Company” means First Trinity Financial Corporation and any successor to its business or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

“Effective Date” of this Agreement means upon execution by the Chairman of the Company’s Compensation Committee and Gregg E. Zahn on August 10, 2017.

 

“Executive” means Gregg E. Zahn.

 

“Good Reason” The Employee may terminate his employment with “Good Reason” following: 

 

(i) a change in job responsibilities of the Employee resulting in the demotion of the Employee from the position of President, CEO or Chairman of the Board of Directors, which demotion is caused by something other than the Employee’s actions or inactions which would constitute Cause, (ii) the removal of the Employee from the Board of Directors of the Company or its majority owned subsidiaries or the failure of the Employee to be re-elected to the Board of Directors or as Chairman of the Board of Directors, as the case may be, (iii) the relocation of the Employee’s employment location by more than [25] miles, (iv) a reduction in the Employee’s Base Salary or bonus opportunity, (v) any material breach of this Agreement by the Company [(including a failure to comply with Section 10 of this Agreement)] or (vi) the Employee’s voluntary termination of employment for any reason during the 12-month period commencing upon a Change in Control of the Company. The Employee may terminate his employment with Good Reason pursuant to clauses (i) through (v) above by providing written notice to the Company within 60 days following his knowledge of the occurrence of the event constituting Good Reason and, if the Company fails to cure such event during the 30-day period following such notice, by terminating his employment within 120 days following his knowledge of the occurrence of the event constituting Good Reason. [The Employee may terminate his employment for Good Reason pursuant to clause (vi) above by providing [5] days written notice of his termination.] 

 

“Termination Date” means the later of three years from the effective date of the employment Agreement or three years from the date of the last automatic extension of the Employment Agreement.

 

	
1.
	
TERMS AND DUTIES

 

For valuable consideration, the receipt of which is hereby acknowledged, Employee is hereby employed and shall continue to work for the Company and its subsidiaries as [Chairman of the Board,] President and Chief Executive Officer for a term commencing on [May 1, 2017 and continuing for a period of thirty-six months (36) ending April 30, 2020], or the termination of this Agreement as described in Section 6 hereof, whichever shall occur first. The Employee's duties shall be to manage Company's interests in its Business and subsidiaries [as mutually agreed and set forth in an agreed job description] The Employee’s office location shall be at the Company’s headquarters in Tulsa, Oklahoma. 

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

Automatic Extension

Each month [beginning September 1, 2017] the Employment agreement shall be automatically extended for successive three-year terms unless this Agreement is terminated as described In Section 6 hereof.

 

	
2.
	
TIME

 

Employee shall faithfully perform for the Company the duties incident to the office of Chairman of the Board, President and Chief Executive Officer and shall perform such other duties of an executive, managerial or administrative nature as shall be specified and designated from time to time by the Board. The Employee shall devote substantially all of the Employee's business time and effort to the performance of the Employee’ s duties hereunder. Employee may serve on the board of directors of, and hold any other offices or positions in any company in which the Company or its subsidiaries have a financial interest and/or any company that does not compete with the Company in the life or accident and health insurance. The Employee will notify the Board of any board positions held either before or after accepting such position. Employee may participate in, invest in and acquire interests in other entities including insurance companies and provide advice and consulting services for a fee to any company in which the Company or its subsidiaries have a financial interest; provided, however, that nothing shall prohibit Employee from retaining any non-controlling interests acquired in a company that begins to compete with the Company after the interest is acquired by the Employee. The Employee may also participate in charitable and community activities, serve on not-for-profit boards and manage his personal investments so long as such activities do not materially interfere with his duties to the Company.

 

	
3.
	
COMPENSATION.

 

	 	
(a)
	
Base Salary. As compensation for all services rendered by the Employee under this agreement, Company will pay Employee an annual base salary of $378,742 for 2016 payable periodically, in substantially equal amounts, but no less often than semi-monthly in accordance with company's payroll practices from time to time in effect. In addition to the monthly compensation above, Employee shall receive an $1,100.00 per month vehicle allowance on the first day of each month during the term of this agreement. The Employee's base salary will increase annually on January 1st of each year by 6% as follows: 2017 - $401,466; 2018 - $425,553; 2019 – $451,087. The Employee’s base salary will be revisited for increase (but not decrease) when the Company's assets reach $500,000,000.

	 	 	 

	 	
(b)
	
Asset Growth Bonus. In addition to the Employee's base salary, the Company will pay Employee an asset growth bonus (with assets measured using the U.S. GAAP basis of accounting) as follows: $200,000 bonus when the Company's assets reach $200,000,000; $250,000 bonus when the Company's assets reach $250,000,000; $300,000 bonus when the Company's assets reach $300,000,000; $350,000 bonus when the Company's assets reach $350,000,000; $400,000 bonus when the Company's assets reach $400,000,000; $450,000 bonus when the Company's assets reach $450,000,000 and $500,000 bonus when the Company's assets reach $500,000,000. More than one asset growth bonus can be reached in any given year and, for avoidance of doubt, the payments shall be cumulative if more than one asset growth bonus is reached in any year. The Employee's asset growth bonus will be revisited (for potential additional payments) when the Company's assets reach $500,000,000. Asset growth bonuses shall be paid in a lump sum in cash within fifteen (15) days following the end of the Company’s fiscal quarter in which the asset gross bonus is achieved. 

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

	 	
(c)
	
Net Profit Bonus. In addition to the Employee's base salary and asset growth bonus, the Company shall pay Employee a net profit bonus of 5% of the net income (with operating results measured using the U.S. GAAP basis of accounting) of the Company each year after completion of the audit and the filing of the Company's Form 10-K. The net profit bonus will be capped at 200% of the Employee's base salary for the year the net profit bonus was calculated. The net profit bonus shall be paid in a lump sum in cash within fifteen (15) days following the filing of the Company’s Form 10-K.

 

	
4.
	
EMPLOYEE BENEFITS.

 

The Employee will be entitled to participate in all incentive, retirement, profit-sharing, life, medical, disability and other benefit plans and programs (collectively, “Benefit Plans”) as are from time to time generally available to other executives of the Company with comparable responsibilities, subject to the provisions of those programs. Without limiting the generality of the foregoing, the Company will provide the Employee with basic health and medical benefits on the terms that such benefits are provided to other executives of the Company with comparable responsibilities. The Employee will also be entitled to holidays, sick leave and vacation in accordance with the Company's policies as they may change from time to time, but in no event shall the Employee be entitled to less than three (3) weeks paid vacation. The Employee shall be provided with indemnification and advancement of expenses to the fullest extent permitted by applicable state law and shall be covered by the Company’s directors’ and officers’ liability insurance policy at its highest levels.

 

	
5.
	
EXPENSES.

 

	 	
(a)
	
Reimbursement for Expenses. The Company will promptly reimburse the Employee, in accordance with the Company's policies and practices in effect from time to time, for all expenses reasonably incurred by the Employee in performance of the Employee's duties under this Agreement, excluding reimbursement for miles driven by the Employee in furtherance of the Company's business "Business Mileage").

 

	 	
(i)
	
The vehicle allowance of $1,100.00 per month is being paid in lieu of reimbursement for Business Mileage.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

	 	
(ii)
	
Employee acknowledges that the payment to him of a monthly vehicle allowance may result in taxable income if the business portion of actual automobile expenses is less than the vehicle allowance of $1,100.00 per month paid to employee under this subsection, or if employee does not maintain the records required by the Internal Revenue Code of 1986, as amended (the “Code”) and the Regulations thereunder. Employee has been advised to consult a tax advisor to determine the taxability of payments under this subsection, and the record keeping requirements associated with the travel and expenses associated with such payments.

 

	
6.
	
TERMINATION.

 

The Employee's employment by the Company: (a) shall terminate upon the Employee's death or disability (as defined below); (b) may be terminated by the Company for any reason other than Cause; (c) may be terminated by the Company for Cause (as defined above) at any time; (d) may be terminated by the Employee, without Good Reason at any time upon sixty (60) days' prior written notice delivered by the Employee to the Company; and (e) may be terminated by the Employee for Good Reason pursuant to the procedures set forth in the Good Reason definition. This Agreement will automatically terminate if the Employee shall be prevented from performing Employee's usual duties for a period of six (6) consecutive months, or for shorter periods aggregating more than six (6) months in any twelve (12) month period by reason of physical or mental disability, total or partial, (herein referred to as "disability"), the Company shall nevertheless continue to pay full salary up to and including the last day of the fifth consecutive month of disability, or the day on which the shorter periods of disability shall have equaled a total of six (6) months. Any salary payments to the Employee shall be reduced by the amount of any benefits paid for the same period of time under any disability insurance program provided by the Company.

 

	
7.
	
CONSEQUENCES OF TERMINATION.

 

	 	
(a)
	
CONSEQUENCES OF TERMINATION ON EMPLOYEE'S DEATH OR DISABILITY. 

 

	 	
(i)
	
If the Employee's employment is terminated prior to the Termination Date, because of the Employee's death or disability, (i) subject to Section 7(d) hereof, this Agreement terminates immediately; (ii) the Company will pay the Employee, or his legal representative or estate, as the case may be, within thirty (30) days following such termination of employment, (x) all accrued vacation amounts and unreimbursed business expenses and (y) in full satisfaction of all of its compensation (base salary and bonus) obligations under this Agreement, an amount equal to the sum of any base salary due to the Employee through the last day of employment, plus any accrued bonus to which the Employee may have been entitled on the last day of employment, but had not yet been received; and (ii) the Employee's benefits and rights under any Benefit Plan shall be paid, retained or forfeited in accordance with the terms of such plan; provided, however, that Employer shall have no obligation to make any payments toward these benefits for Employee from and after termination.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial  Corporation and Gregg E. Zahn, dated September 5, 2017

 

	 	
(b)
	
CONSEQUENCES OF TERMINATION BY THE COMPANY FOR ANY REASON OTHER THAN FOR CAUSE.

 

	 	
(i)
	
If the Employee’s employment is terminated by the Company prior to the Termination Date, for any reason other than for Cause or if the Employee terminates his employment for Good Reason prior to the Termination Date; (i) subject to Section 7(d) hereof, this Agreement terminates immediately; (ii) the Company will pay the Employee, within thirty (30) days following such termination of employment, (x) all accrued vacation amounts and unreimbursed business expenses and (y) in full satisfaction of all of its compensation (base salary and bonus) obligations under this Agreement, an amount equal to the sum of any base salary due to the Employee through the last day of employment, plus any accrued bonus to which the Employee may have been entitled on the last day of employment, but had not yet been received; (iii) the Company will pay the Employee, within sixty (60) days of such termination, a lump sum severance payment equal to 2.99 times the Employee's W-2 compensation averaged over the previous three completed years; (iv) for a period of three (3) years following the Employee’s termination of employment, the Employee shall be treated as if he had continued to be an employee for all purposes under the Company’s health and medical plans; or if the Employee is prohibited from participating in such plan, the Company shall, at its sole cost and expense, provide health and dental insurance coverage for Employee which is equivalent to the coverage provided to Employee as of the Employee’s termination of employment . Such benefits shall not have any waiting period for coverage and shall provide coverage for any pre-existing condition. Following this continuation period, the Employee shall be entitled to receive continuation coverage under Part 6 of Title I of ERISA treating the end of this period as a termination of the Employee’s employment if allowed by law; (v) for a period of three (3) years following the Employee’s termination of employment, the Company shall maintain in force, at its expense, all life insurance being provided or required to be provided to the Employee by the Company as of the Employee’s termination of employment and shall thereafter enable Employee to assume such life insurance at the Employee’s expense; (vi) the Company will pay the Employee any asset growth bonus and/or net profit bonus which is earned following the Employee’s termination of employment and during the calendar quarter in which the Employee’s employment terminates; and (vii) except as otherwise provided in this paragraph, the Employee's benefits and rights under any Benefit Plan, other than any basic health and medical benefit plan, shall be paid, retained or forfeited in accordance with the terms of such plan; provided, however, that Employer shall have no obligation to make any payments toward these benefits for Employee from and after termination other than as required by applicable law.

 

	 	
(ii)
	
Any payment pursuant to clause (b) (1) (iii) above:

 

	 	
(1)
	
will be subject to offset for any advances, amounts receivable, and loans, including accrued interest, outstanding on the date of the employment termination; but

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

	 	
(2)
	
will not be subject to offset on account of any remuneration paid or payable to the Employee for any subsequent employment the Employee may obtain, whether during or after the period during which the payment is made, and the Employee shall have no obligation whatever to seek any subsequent employment.

 

	 	
(3)
	
CONSEQUENCES OF TERMINATION FOR CAUSE BY THE COMPANY OR BY EMPLOYEE OTHER THAN FOR GOOD REASON, DEATH OR DISABILITY. 

 

If the Employee's employment is terminated by the Company prior to the Termination Date for Cause or by the Employee other than for Good Reason, or the Employee’s death or disability , (i) subject to Section 7(d) hereof, this Agreement terminates immediately; (ii) the Company will pay the Employee, in full satisfaction of all of its compensation (base salary and bonus) obligations under this Agreement, an amount equal to the sum of any base salary due to the Employee through the last day of employment, plus any accrued bonus to which the Employee may have been entitled on the last day of employment, but had not yet been received; and (iii) the Employee's benefits and rights under any Benefit Plan shall be paid, retained or forfeited in accordance with the terms of such plan; provided, however, that Employer shall have no obligation to make any payments toward these benefits for Employee from and after termination other than as required by applicable law.

 

	 	
(d)
	
PRESERVATION OF CERTAIN PROVISIONS.

 

	 	
(i)
	
Notwithstanding any provisions of this Agreement to the contrary, the provisions of Sections 8 through 12 hereof shall survive the expiration or termination of this Agreement as necessary to give full effect to all of the provisions of this Agreement.

 

	
8.
	
ARBITRATION

 

	 	
(a)
	
Any disputes arising under or in connection with this agreement shall be resolved by arbitration, to be held in Tulsa, Oklahoma in accordance with the rules and procedures of the American Arbitration Association and the State of Oklahoma.

 

	 	
(b)
	
all costs, fees and expenses of any arbitration in connection with this agreement which result in any decision or settlement requiring Company to make a payment to Employee, including, without limitation, attorneys’ fees of both Employee and Company, shall be borne by, and be the obligation of, Company. In no event shall Employee be required to reimburse Company for any of the costs and expenses incurred by Company relating to such arbitration. The obligation of Company under this section shall survive the termination of this agreement (whether such termination is by Company, by Employee, upon the expiration of this agreement or otherwise).

 

	 	
(c)
	
Pending the outcome or resolution of any arbitration, Company shall continue payment of all amounts to Employee without regard to any dispute.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

	
9.
	
NON-COMPTETE

 

Employee agrees that for a period of one year following the termination of this Agreement he will not (1) solicit any Company shareholder, policyholder, to become a shareholder, policyholder, of any competitor or anticipated competitor of the Company; and (2) solicit any employee, agent, or independent contractor of Company to become an employee, agent or independent contractor of any competitor or anticipated competitor of the Company.

 

EXCEPTIONS TO NON-COMPETITION COVENANTS. 

 

Notwithstanding anything herein to the contrary or apparently to the contrary, the following shall not be a violation or breach of the non-competition covenants contained in this Agreement. The Employee may (i) engage in business with anyone or any companies that the Employee had an existing relationship with prior to becoming associated with the Company, (ii) engage in any business, including the insurance business as an agent, employee, shareholder or owner, in any location, (iii) conduct business with any Company shareholder, policyholder to become a shareholder, policyholder of any competitor or anticipated competitor of Company if the person solicits the Employee, (iv) hire any employee, agent or independent contractor of the Company to become an employee, agent or independent contractor of any competitor or anticipated competitor of Company if the person solicits Employee, (v) providing references for employees of the Company and (vi) soliciting employees of the Company through general advertisements not specifically targeted at employees of the Company. 

 

To deliver promptly to Company on termination of the Employee's employment by the Company, or at any time Company may so request, all memoranda, notes, records, reports, and other documents (and all copies thereof) relating to Company's and its affiliates' businesses which the Employee may then possess or have under his control. Notwithstanding the foregoing, the Employee may retain his contacts, calendar, personal correspondence and any compensation information or other information necessary for tax return purposes.

 

	
10.
	
SUCCESSORS; BINDING AGREEMENT; ASSIGNMENT.

 

The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree in writing to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place, provided that the Employee must be given the position as the Chief Executive Officer ("CEO") and President with the same authority, powers and responsibilities set forth in Section 1 hereof with respect to the subsidiary or subdivision which operates the business of the Company as it exists on the date of such business combination. [Failure of the Company to obtain such express assumption and agreement at or prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to compensation and benefits from the Company in the same amount and on the same terms to which the Employee would be entitled hereunder if the Company terminated the Employee's employment without Cause. For purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of termination of Employee’s employment.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial  Corporation and Gregg E. Zahn, dated September 5, 2017

 

 

As used in this Agreement, the Company may not assign this Agreement, (i) except in connection with, and to the acquirer of, all or substantially all of the business or assets of the Company, provided such acquirer expressly assumes and agrees in writing to perform this Agreement as provided in this Section. The Employee may not assign his rights or delegate his duties or obligations under this Agreement. 

 

	
11.
	
CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

 

	 	
(a)
	
Gross-Up Payment. If it shall be determined that any Payment (as defined below) would be subject to the Excise Tax (as defined below), then the Employee shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amount such that, after payment by the Employee of all taxes (and any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes and penalties imposed pursuant to Section 409A of the Code, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. The Company’s obligation to make Gross-Up Payments under this Section 11 shall not be conditioned upon the Employee’s termination of employment.

 

	 	
(b)
	
Determinations. Subject to the provisions of Section 11(c), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized certified public accounting firm as may be designated by the Employee (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Employee within 15 business days of the receipt of notice from the Employee that there has been a Payment or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity, or group effecting the change of control, the Employee may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm shall be binding upon the Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company should have been made (the “Underpayment”), consistent with the calculations required to be made hereunder. In the event the Company exhausts its remedies pursuant to Section 11(c) and the Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

	 	
(c)
	
Claims by the IRS. The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than 10 business days after the Employee is informed in writing of such claim. The Employee shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the 30-day period following the date on which the Employee gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Employee in writing prior to the expiration of such period that the Company desires to contest such claim, the Employee shall:

 

	 	
(i)
	
give the Company any information reasonably requested by the Company relating to such claim;

 

	 	
(ii)
	
take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

 

	 	
(iii)
	
cooperate with the Company in good faith in order effectively to contest such claim; and

 

	 	
(iv)
	
permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 11(c), the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on behalf of the Employee and direct the Employee to sue for a refund or to contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction, and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company pays such claim and directs the Employee to sue for a refund, the Company shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

 

	 	
(d)
	
Refunds. If, after the receipt by the Employee of a Gross-Up Payment or payment by the Company of an amount on the Employee’s behalf pursuant to Section 11(c), the Employee becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Employee shall (subject to the Company’s complying with the requirements of Section 11(c), if applicable) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Employee’s behalf pursuant to Section 11(c), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 

 

	 	
(e)
	
Payment of the Gross-Up Payment. Any Gross-Up Payment, as determined pursuant to this Section 11, shall be paid by the Company to the Employee within five days of the receipt of the Accounting Firm’s determination; provided that the Gross-Up Payment shall in all events be paid no later than the end of the Employee’s taxable year next following the Employee’s taxable year in which the Excise Tax (and any income or other related taxes or interest or penalties thereon) on a Payment are remitted to the Internal Revenue Service or any other applicable taxing authority or, in the case of amounts relating to a claim described in Section 11(c) that does not result in the remittance of any federal, state, local, and foreign income, excise, social security, and other taxes, the calendar year in which the claim is finally settled or otherwise resolved. Notwithstanding any other provision of this Section 11, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Employee, all or any portion of any Gross-Up Payment, and the Employee hereby consents to such withholding.

 

	 	
(f)
	
Certain Definitions. The following terms shall have the following meanings for purposes of this Agreement:

 

	 	
(i)
	
“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

 

	 	
(ii)
	
The “Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

	 	
(iii)
	
A “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Employee, whether paid or payable pursuant to this Agreement or otherwise.

 

	
12.
	
SECTION 409A.

The parties intend for the payments and benefits under this Agreement to be exempt from Section 409A of the Code or, if not so exempt, to be paid or provided in a manner which complies with the requirements of such section, and intend that this Agreement shall be construed and administered in accordance with such intention. In the event the Company determines that a payment or benefit under this Agreement may not be in compliance with Section 409A of the Code, the Company shall reasonably confer with the Employee in order to modify or amend this Agreement to comply with Section 409A of the Code and to do so in a manner to best preserve the economic benefit of this Agreement.  Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, (i) no amounts shall be paid to the Employee under Section 7 of this Agreement until the Employee would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code, (ii) amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Employee’s separation from service shall instead be paid on the first business day after the date that is six (6) months following the Employee’s separation from service (or death, if earlier), with interest for any cash payments so delayed, from the date such cash amounts would otherwise have been paid at the short-term applicable federal rate, compounded semi-annually, as determined under Section 1274 of the Code for the month in which the payment would have been made but for the delay in payment required to avoid the imposition of an additional rate of tax on the Employee, (iii) each amount to be paid or benefit to be provided under this Agreement shall be construed as a separately identified payment for purposes of Section 409A of the Code, (iv) any payments that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise and (v) amounts reimbursable to the Employee  under this Agreement shall be paid to the Employee  on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to the Employee)  during any one (1) year may not effect amounts reimbursable or provided in any subsequent year.

 

	
13.
	
MISCELLANEOUS.

 

	 	
(a)
	
This Agreement constitutes the entire understanding between the parties regarding the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications and agreements. Nothing herein contained shall be construed so as to require the commission of any act contrary to law and wherever there is any conflict between any provision of this Agreement and any present or future statute, law, ordinance or regulation, the latter shall prevail, but in such event the provision of this Agreement affected shall be curtailed and limited only to the extent necessary to bring it within legal requirements.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

No representation, promise, or inducement has been made by either party that is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged representation, promise, or inducement not so set forth. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

 

This agreement shall not be modified, amended or in any way altered except by an instrument in writing approved by the Board and signed by an officer designated by the Board to execute such waiver, modification or discharge and signed by Employee.

 

	 	
(b)
	
If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect.

 

	 	
(c)
	
Should any portion of this Agreement be adjudged or held to be invalid, unenforceable or void, such holding shall not have the effect of invalidating or voiding the remainder of this Agreement and the parties hereby agree that the portion so held invalid, unenforceable or void shall, if possible, be deemed amended or reduced in scope, or otherwise be stricken from this Agreement to the extent required for the purposes of validity and enforcement thereof.

 

	 	
(d)
	
The provisions of this Agreement shall inure to the benefit of the parties hereto, their heirs, legal representatives, successors, and assigns.

 

	 	
(e)
	
This Agreement shall be construed and enforced in accordance with the laws of the State of Oklahoma that are applicable to contracts made and to be performed in the State of Oklahoma, regardless of the actual place of making or performance. 

 

	 	
(f)
	
This Agreement shall become effective upon the signature of Employee and the Company's representative upon authorization by the Board.

 

	 	
(g)
	
The Employee represents that he has had the right and opportunity to consult with independent counsel of his own choosing and that he has read and understands the foregoing and he has signed this agreement of his own free will without duress, coercion or undue influence.

 

	 	
(h)
	
Notices shall be sent via first class mail, postage paid or personal delivery and shall be deemed to have been received on the earliest of the third day after deposit in the mail or personal delivery.

 

 

 

 

 

Exhibit 10.26     Fourth Amendment to Existing Employment Agreement between First Trinity Financial Corporation and Gregg E. Zahn, dated September 5, 2017

 

 

 

	
Notice to Gregg Zahn:    
	
Gregg Zahn

	 	
[Last address on books and Records of the Company]

	 	 
	
Notice to Company:
	First Trinity Financial Corporation 
	 	7633 E. 63rd Place
	 	Suite 230
	 	Tulsa, OK 74133-1246

 

 

Executed this 5th day of September, 2017 

 

 

	
Gregg E. Zahn:  
	
/s/ Gregg E. Zahn
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Gregg E. Zahn
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
Company:                 By:
	
/s/ George E. Peintner
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
George E. Peintner,
	
 
	
 

	 	 	 	 
	 	Chairman	 	 
	 	First Trinity Financial Corporation Compensation Committee	 
	 	First Trinity Financial Corporation Board of Directors

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