Document:

Exhibit 10.5
	 

	 
		

	 

	 
		EMPLOYMENT AGREEMENT
	 

	 
		Employers Insurance Company of Nevada, (the
		“Company”) and Ann W. Nelson (the “Employee”) enter this
		Employment Agreement (this “Agreement”) on this 1st day of January,
		2006.
	 

	 
		RECITALS
	 

	 
		A. Employee has knowledge and experience
		applicable to the position of Executive Vice President Corporate and Public
		Affairs.
	 

	 
		B. The Company is a Nevada domiciled
		insurance company.
	 

	 
		C. The Company desires to employ Employee
		to perform certain services for the Company, and Employee desires to be so
		employed by the Company.
	 

	 
		In consideration of the premises and mutual
		covenants and promises set forth herein, and other good and valuable
		consideration, the receipt and sufficiency of which are mutually acknowledged,
		the parties agree as follows:
	 

	 
		TERM
	 

	 
		1. Employment.
		
	 

	 
		The Company agrees to employ Employee and
		Employee accepts such employment upon the terms and conditions specified
		herein. Employee agrees to devote substantially all of his time and effort
		during working hours in the performance of the duties called for herein and
		agrees that any other non-employment related duties (i.e., industry related
		groups, service on boards, etc) will not be allowed to materially interfere
		with the performance of the duties called for herein.
	 

	 
		2. Term.
	 

	 
		The term of this Agreement shall commence
		on the date hereof, and continue for three (3) years, until December 31, 2008
		(the “Expiration Date”) unless sooner terminated in accordance with
		this Agreement. The Company agrees to notify the Employee of its intent whether
		or not to offer another contract of employment to the Employee not later than
		six (6) months prior to the expiration of this Agreement. If the Company
		informs the Employee that the employment will be terminated at the end of the
		term of this Agreement, Employee shall be entitled to reasonable paid
		administrative leave to secure other employment through the end of the
		Agreement. If the Company informs the Employee that a new contract will be
		offered after the expiration of this Agreement, the parties hereto shall
		consummate the terms and conditions of the new contract not less than thirty
		(30) days before the expiration of this Agreement. If the parties cannot agree
		on the terms and conditions of the new contract more than thirty (30) days
		before the expiration of this Agreement, and the Company decides, at that time,
		that further negotiations are not appropriate, the Company shall pay Employee
		severance, in accordance with Paragraph 6(a)(l) herein, upon the termination of
		the Agreement.
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		3. Services and Duties.
	 

	 
		Employee shall serve as Executive Vice
		President Corporate and Public Affairs and shall perform such duties as may be
		assigned by the Chief Executive Officer from time to time. At the request of
		the Board of Directors of the Company, Employee shall also serve as a director
		of the Company and/or one or more of the Company’s parent, subsidiaries or
		affiliates at no additional compensation. Employee agrees that upon the
		termination of his employment with the Company, he shall resign from any and
		all Boards effective on the date of the termination of employment.
	 

	 
		4. Insurance.
	 

	 
		The Employee agrees to submit to a physical
		examination at a reasonable time as requested by the Company for the purpose of
		the Company’s obtaining life insurance on the life of the Employee for the
		benefit of the Company; provided, however, that the Company shall bear the
		costs for such examinations and shall pay all premiums on any life insurance
		obtained as a result of such examinations. Employee further agrees to submit to
		drug testing in accordance with the Company policy.
	 

	 
		5. Termination.
	 

	 
		(a) The Company, at any time, may terminate
		this Agreement immediately for Cause. Cause is defined as:
	 

	 
		(i) A material breach of this Agreement by
		Employee;
	 

	 
		(ii) Failure or inability of Employee to
		obtain or maintain any required licenses or certificates;
	 

	 
		(iii) Willful violation by Employee of any
		law, rule or regulation, including without limitation, any material insurance
		law or regulation, which violation may, as determined by the Company, adversely
		affect the ability of Employee to perform his duties hereunder or may subject
		the Company to liability;
	 

	 
		(iv) Election by the Company to discontinue
		the Company’s business; or,
	 

	 
		(v) Conviction of any felony or crime
		including moral turpitude.
	 

	 
		(b) The Employee may terminate this
		Agreement immediately in the event of:
	 

	 
		(i) A material breach of this Agreement by
		the Company; or
	 

	 
		(ii) Willful violation by Employer of any
		law, rule or regulation, including without limitation, any material insurance
		law or regulation, which violation may, as determined by the Employee,
		adversely affect the ability of Employee to perform his duties hereunder or may
		subject the Employee to liability
	 

	 
		(c) The Company may also terminate this
		Agreement upon the occurrence of one or more of the following events, subject
		to applicable law:
	 

	 
		(i) Death of Employee;
	 

	 
		(ii) Employee is deemed to be disabled in
		accordance with the policies of the Company and the law or if Employee is
		unable to perform the essential job functions of Employee’s position with
		the Company, with or without reasonable accommodation, for a period of more
		than 100 business days in any 120 consecutive business day period. Employee is
		entitled to any and all short term or long term disability programs, like any
		other employee, in accordance with the policies of the Company, whether or not
		this Agreement is terminated;
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		(iii) Any event, occurrence, or factual
		situation that, in the sole and absolute discretion of the Company, shall make
		the continued employment of Employee ineffective, inadvisable, or
		unnecessary.
	 

	 
		6. Duties Upon Termination
	 

	 
		(a) If the Company terminates this
		Agreement for any reason before the Expiration Date, other than specified above
		in subsection 5(a) for Cause, 5(c)(l), for the death of the employee, or
		5(C)(2) for disability, or if the Employee terminates this Agreement for Cause
		which has not been cured by the Company within thirty (30) days of receipt of
		written notice of the alleged breach pursuant to Paragraph 5(b), the Employee
		shall receive the following severance pay (the “Severance
		Pay”):
	 

	 
		(i) An amount equal to Base Salary through
		expiration of the term of this Agreement or one months Base Salary (as defined
		below) for each completed year of service with the Company, whichever is
		greater but in no event less than twelve (12) months, within thirty (30) days
		of the effective date of the termination. The payment amount shall be subject
		to normal payroll deductions at Employee’s then elected rate. Employee
		agrees to pay any federal or state taxes, which are required to be paid by
		Employee beyond the amount of any withholding by the Company;
	 

	 
		(ii) Short term bonus amounts from the
		Executive Bonus Plan, pro-rated for the period of the calendar year in which
		the Employee last performed services for the Company, in accordance with the
		Bonus Plan in effect on the date of the termination;
	 

	 
		(iii) Long term bonus amounts from the
		Executive Bonus Plan, if applicable, either in a lump sum payment made within
		thirty (30) days of the effective date of the termination or, in accordance
		with the payment schedule in the Bonus Plan in effect on the date of the
		termination, such election to be made at the option of the Company; and,

	 

	 
		(iv) Continuation of the insurance coverage
		in effect on the date of the termination, for a period of 18 (eighteen) months
		with the Company paying the employer portion of the premium and the Employee
		paying the employee portion, including dependents if applicable, of the premium
		during the eighteen (18) month period, provided Employee elects to continue
		such insurance coverage under the Consolidated Omnibus Budget Reconciliation
		Act of 1985 (“COBRA”). Employee is solely responsible for taking the
		actions necessary to exercise his rights under COBRA for the insurance coverage
		Employee has in effect, including dependents if applicable, on the date of
		termination.
	 

	 
		(b) The parties agree, in the event of a
		breach of this Agreement by the Company that is not cured in accordance with
		this Agreement, that actual damages are speculative and that the amount of the
		Severance Pay set forth herein is liquidated damages and is a reasonable
		estimate of what damages would be for a breach of this Agreement.
	 

	 
		(c) Employee agrees and acknowledges that
		the following must be satisfied by the Employee before he is entitled to the
		Severance Pay called for herein:
	 

	 
		(i) That Employee return any and all
		Company equipment, software, data or Company property or information, including
		documents and records or copies thereof relating in any way to any proprietary
		information of the Company, its
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		 
	 

	 
		 
	 

	 
		parent, subsidiaries or affiliates whether
		prepared by the Employee or any other person or entity. That Employee further
		agrees that he shall not retain any proprietary information of the Company, its
		parent, subsidiaries or affiliates after the termination of his
		employment;
	 

	 
		(ii) That Employee execute a Global Release
		of Liability, in a form substantially similar to the sample attached hereto,
		which releases liability for any and all claims, whether based in law or
		equity, arising from or associated with Employee’s employment or with this
		Agreement. That Employee further acknowledges and agrees that he has not made
		and will not make any assignment of any claim, cause or right of action, or any
		right of any kind whatsoever, arising from or associated with the employment of
		Employee by the Company; and,
	 

	 
		(iii) That Employee reaffirm the covenants
		contained herein, in writing, including but not limited to the following:
		non-disclosure, non-competition and non-solicitation covenants. 
	 

	 
		(d) The Employee may terminate this
		Agreement for reasons other than those identified in Paragraph 5(b) upon not
		less than 60 days prior written notice. If the Employee terminates this
		Agreement pursuant to this paragraph, he shall only be entitled to the
		following:
	 

	 
		(i) Any unpaid salary through the effective
		date of Employee’s resignation from the Company; and
	 

	 
		(ii) Any accrued and unused vacation
		pay.
	 

	 
		7. Compensation and Benefits.
	 

	 
		(a) During the term of this Agreement, the
		Company shall pay to Employee an annual salary of not less than $183,000
		(“Base Salary”), which amount shall be paid according to the
		Company’s regular payroll practices. The Company agrees to review the Base
		Salary on an annual basis and adjust the salary to comply with the executive
		compensation policy in effect at the time of the review. Any increase made to
		the annual salary will establish the new Base Salary for the Employee. All
		payments made pursuant to this Agreement shall be reduced by and subject to
		withholding for all federal, state, and local taxes and any withholding
		required by applicable laws and regulations.
	 

	 
		(b) The Company may provide an annual
		incentive (the “Annual Incentive”) to the Employee during the Term of
		Employment based on the Employee’s and the Company’s performance, as
		determined by the Board (or a committee thereof) in its sole discretion. If
		such a plan is provided, the Company shall set a target incentive of not less
		than sixty percent (60%) of annual salary. Such annual incentive shall be paid
		in accordance with the Company’s regular practice for its senior officers,
		as in effect from time to time. To the extent not duplicative of the specific
		benefits provided herein, the Employee shall be eligible to participate in all
		incentive compensation, retirement, supplemental retirement, and deferred
		compensation plans, policies and arrangements that are provided generally to
		other senior officers of the Company at a level (in terms of the amount and
		types of benefits and incentive compensation that the Employee has the
		opportunity to receive and the terms thereof) determined in the sole discretion
		of the Board.
	 

	 
		(c) Employee agrees that the amounts
		payable under this Agreement including but not limited to the amount payable
		under Paragraph 6(a)(l) is good, valuable and separate consideration for the
		non-competition, assignment and release of liability provisions
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 
	 
		contained herein. Employee acknowledges
		that he is aware of the effect of the non-competition, assignment and release
		of liability provisions contained herein and agrees that the amounts payable
		under this Agreement including but not limited to the amount payable under
		Paragraph 6(a)(l) is sufficient consideration for his agreement to these
		provisions.
	 

	 
		(d) In addition to the compensation called
		for in this Agreement, Employee shall be entitled to any and all benefits and
		perquisites generally provided from time to time to other similarly situated
		officers as well as the benefits and prerequisites attached hereto as Exhibit
		“A” and incorporated herein by this reference.
	 

	 
		8. Licensing.
	 

	 
		Employee has obtained and possesses, or
		will obtain and possess, and will maintain throughout the Term hereof, all
		licenses, approvals, permits, and authorization (the “Licenses”)
		necessary to perform Employee’s duties hereunder, (if any). Any costs,
		attorneys fees, investigations fees or other expenses incurred in connection
		with obtaining or maintaining such Licenses shall be borne by the Company.
		Employee warrants that Employee is fully eligible, under all standards and
		requirements, to obtain, possess, and maintain such Licenses and that Employee
		will commit no acts during the Term hereof that would jeopardize or eliminate
		Employee’s ability to possess or maintain such Licenses.
	 

	 
		9. Rules and Regulations.
	 

	 
		Employee shall observe, enforce, and comply
		with the policies, philosophies, strategies, rules, and regulations of the
		Company, as they may be promulgated and/or modified from time to time, and
		shall carry out and perform the orders, directions, and policies of the
		Company, as they may be stated and/or amended from time to time, either orally
		or in writing. A violation of this Section 8 by Employee is a material breach
		of this Agreement.
	 

	 
		10. Restrictive Covenants.
	 

	 
		In consideration of the amount payable
		under Paragraph 6(a)(l), the other compensation paid hereunder, and other good
		and valuable consideration, the receipt and sufficiency of which is
		acknowledged by the parties, the parties agree to the following provisions of
		this Section 10:
	 

	 
		(a) Non-Competition. Employee understands
		and agrees that the Company does business throughout the State of Nevada and
		other states. Employee further understands and agrees that he is a high ranking
		officer of the Company and will have access to confidential and trade secret
		information of the Company and to its goodwill that will allow Employee to
		unfairly compete with the Company justifying this restriction. For a period of
		one (1) year following the termination of Employee’s employment hereunder
		for any reason, including expiration of the Term of this Agreement, Employee
		agrees that, without the written permission of the Company, he will not engage
		(whether as owner, partner, controlling stockholder, controlling investor,
		employee, adviser, consultant, or otherwise) in any business that is in direct
		competition with the Business, as of the Applicable Date (as defined below), in
		Nevada and any other state in which the Company is conducting its Business (the
		“Non-Compete Area”) as of the effective date of
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 
	 
		the termination. “Applicable
		Date” is the date of termination or the date the Employee executes the
		Global Mutual Release of Liability in accordance with this Agreement, whichever
		is later.
	 

	 
		(b) Non-Solicitation. Without limiting the
		generality of the foregoing, Employee agrees that for a period of one (1) year
		following the Applicable Date, he will not, without the prior written consent
		of the Company, directly or indirectly solicit or attempt to solicit, within
		the Non-Compete Area, any business from any person or entity that the Company
		called upon, solicited, or conducted business with as of the effective date of
		the termination, any persons or entities that have been customers of the
		Company or recruit or hire any person who has been or is an employee of the
		Company, its parent, subsidiaries or affiliates during the preceding one-year
		period from the date of termination of this Agreement. In addition, Employee
		agrees that he shall not directly or indirectly solicit or encourage any
		employee of Company to go to work for or with Employee for a period of one-year
		following the date of termination of this Agreement. In the event of the
		violation of this Section 10, the Company will be entitled to, in addition to
		any other remedies provided by law or equity, obtain injunctive relief and the
		specific performance of this covenant. Should Employee violate this Section 10,
		the period of time for this Paragraph will automatically be extended for the
		period of time from which Employee began such violation until he permanently
		ceases such violation. The Employee acknowledges that this Section 10 is
		necessary to protect the interests of the Company, and that the restrictions
		contained herein are reasonable in light of the consideration and other value
		the Employee has accepted pursuant to this Agreement. If any provision of this
		covenant is invalid in whole or in part, it will be limited, whether as to
		time, area covered, or otherwise as and to the extent required for its validity
		under the applicable law and as so limited, will be enforceable.
	 

	 
		(c) Confidential Information. Employee
		acknowledges that he has had or will have access to the Company’s
		confidential information and that of its parent, subsidiaries and affiliates
		(including, but not limited to, records regarding sales, price and cost
		information, marketing plans, customer names, customer lists, sales techniques,
		distribution plans or procedures, and other material relating to the
		Company’s Business), proprietary, or trade secret information (the
		“Confidential Information”), and agrees never to use the Confidential
		Information other than for the sole benefit of the Company and further agrees
		to never disclose such Confidential Information (except as may be required by
		regulatory authorities or as may be required by law) to any entity or person
		that is not an officer or employee (unless at such time such Confidential
		Information is subject to a policy of the Company restricting disclosure to
		non-officers) of the Company at the time of such disclosure, without the prior
		written consent of the Company. Employee further acknowledges that this
		covenant to maintain Confidential Information is necessary to protect the
		goodwill and proprietary interests of the Company, its parent, subsidiaries or
		affiliates and the restriction against the disclosure of Confidential
		Information is reasonable in light of the consideration and other value the
		Employee has received or will receive pursuant to this Agreement.
	 

	 
		(d) Employee agrees to cooperate with the
		Company in any litigation, administrative proceeding, investigation or audit
		involving any matters with which Employee has knowledge of from his employment
		with the Company. The Company shall reimburse Employee for reasonable expenses,
		including reasonable compensation for services
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 
	 
		rendered at his hourly rate of compensation
		on the date of termination of the Agreement, incurred in providing such
		assistance and approved by the Company.
	 

	 
		(e) In the event of a violation of this
		Section 10, the Company shall be entitled to any form of relief at law or
		equity, and the parties agree and acknowledge that injunctive relief is an
		appropriate, but not exclusive, remedy to enforce the provisions hereof. The
		existence of any claim or cause of action of Employee against the Company,
		whether predicated on this Agreement or otherwise, shall not constitute a
		defense of the Company’s enforcement of the covenants set forth in this
		Section 10. The Employee hereby submits to the jurisdiction of the courts of
		the State of Nevada and federal courts therein for the purposes of any actions
		or proceedings instituted by the Company to enforce its rights under this
		Agreement, to seek money damages or seek injunctive relief. Employee further
		acknowledges and agrees that the obligations contained in Section 10 of this
		Agreement are fair, do not unreasonably restrict Employee’s further
		employment and business opportunities, and are commensurate with the
		compensation arrangements set out in this Agreement. The covenants contained in
		Section 10 shall each be construed as an Agreement independent of any other
		provisions of this Agreement. Both parties intend to make the covenants of
		Section 10 binding only to the extent that it may be lawfully done under
		existing applicable laws. If a court of competent jurisdiction decides any part
		of any covenant is overly broad, thereby making the covenant unenforceable, the
		parties agree that such court shall substitute a reasonable, judicially
		enforceable limitation in place of the offensive part of the covenant and as so
		modified the covenant shall be as fully enforceable as set forth herein by the
		parties themselves in the modified form.
	 

	 
		(f) Employee acknowledges that it is
		possible that the corporate structure of the Company could change during the
		term of this Agreement. Employee hereby acknowledges and affirms that the
		Company may assign its rights under this Agreement to a third-party without the
		approval of or additional consideration to Employee. Employee acknowledges and
		agrees that the consideration called for herein is good and sufficient
		consideration for the Company’s right to assign its rights under this
		Agreement.
	 

	 
		(g) Sections 10(a) through (f), inclusive,
		of this Agreement shall survive either termination of the employment
		relationship or termination of this Agreement for the full period set forth in
		Sections 10(a) through (e), inclusive.
	 

	 
		11. Employee Benefits.
	 

	 
		Employee shall be entitled to receive
		employee benefits and other employment-related perquisites as shall be
		established or revised by the Company from time to time for similarly situated
		employees. Employee shall receive full medical coverage, dependent medical
		coverage, life insurance, and such other employee benefits on the same terms as
		officers at the same level within the Company.
	 

	 
		12.
		Work for Hire.
	 

	 
		Employee agrees that any work, invention,
		idea or report which he produces or which results from or is suggested by the
		work Employee does on behalf of the Company, its parent, subsidiaries or
		affiliates is a “work for hire” (hereinafter referred to as
		“Work”) and will be the sole property of the Company. The Employee
		agrees to sign any documents, during or after employment, which the Company
		deems necessary to confirm
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 
	 
		its ownership of the Work, and Employee
		agrees to cooperate with the Company to allow the Company to take advantage of
		it ownership of such Work.
	 

	 
		13. Assignment of Agreement.
	 

	 
		Employee agrees that his services are
		unique and personal and that, accordingly, Employee may not assign his rights
		or delegate his duties or obligations under this Agreement. The Company may
		assign its rights, duties, and obligations under this Agreement to any
		successor to its business. This Agreement shall inure to the benefit of and be
		binding upon the Company’s successors and assigns.
	 

	 
		14. Indemnification of Employee.
	 

	 
		The Company shall indemnify the Employee
		and hold him harmless for acts or decisions made by him in good faith while
		performing services for the Company, its parent, subsidiaries and affiliates to
		the full extent allowed by law. The Company shall also use its reasonable
		efforts to obtain coverage for him under any insurance policy now in force or
		hereinafter obtained during the term of this Agreement covering the officers
		and directors of the Company against lawsuits, subject to the business judgment
		of the Board. The Company shall pay all expenses, including attorneys’
		fees of an attorney selected and retained by the Company to represent the
		Employee, actually and necessarily incurred by the Employee in connection with
		the defense of such act, suit, or proceeding and in connection with any related
		appeal, including the cost of court settlements.
	 

	 
		15. Notices.
	 

	 
		Any notice, document, or other
		communication (hereinafter “Notice”) which either party may be
		required or may desire to give to the other party shall be in writing, and any
		such notice may be given or delivered personally or by mail. Any such notices
		given or delivered personally shall be given or delivered by hand to an officer
		of the entity to which they are being given or delivered or the individual, as
		the case may be, and shall be deemed given or delivered when so given or
		delivered by hand. Any such notices given or delivered by mail shall be deemed
		given or delivered three (3) days after it is deposited in the U.S. mail,
		certified or registered mail, return receipt requested, with all postage and
		fee prepaid, address to the person or entity in question as follows:
	 

	 
		 
	 

	 
			
				
				  If to the Employee:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  
 Ann W. Nelson
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  7413 Franktown Rd
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  Washoe Valley, Nevada 89704
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
			
				
				  If to the Company:
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  
 Douglas D. Dirks
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  9790 Gateway Drive, Suite
				  200
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  Reno, Nevada 89521
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 
	 
		or, in either case, to such other address
		as either party may have previously notified the other pursuant to the
		provisions of this Section 15.
	 

	 
		16. Severability.
	 

	 
		In the event that any provision hereof
		shall be declared by a court of competent jurisdiction to be void or voidable
		as contrary to law or public policy, such declaration shall not affect the
		continuing validity or enforceability of any other provisions hereof insofar as
		it may be reasonable and practicable to continue to enforce such other
		provision in the absence of the provision which shall have been declared to be
		void and voidable.
	 

	 
		17. Remedy for Breach.
	 

	 
		Both parties recognize that the services to
		be performed by the Employee are special and unique. The Company will have the
		right to seek and obtain damages and any available equitable remedies for
		Employee’s breach of this Agreement. The Employee’s remedy for any
		breach of this Agreement is strictly limited to the Severance Pay called for
		herein.
	 

	 
		18. Mitigation of Damages.
	 

	 
		Employee shall not be required to mitigate
		damages or the amount of any payment provided under this Agreement by other
		employment or otherwise after the termination of employment hereunder, and any
		amounts earned by Employee, whether from self-employment or other employment
		shall not reduce the amount of any Severance Pay called for herein.
	 

	 
		19. Attorneys’ Fees and Costs.
	 

	 
		In any claim or dispute between the parties
		arising out of or associated with this Agreement or the breach hereof, the
		prevailing party shall be entitled to recover all reasonable attorneys’
		fees, expenses, and costs thereof or associated therewith. The term
		“prevailing party” means the party obtaining substantially the relief
		sought via litigation or through an action in arbitration.
	 

	 
		20. Integration, Amendment, and Waiver.
	 

	 
		This Agreement and such other written
		agreements referenced in this Agreement, constitute the entire agreement
		between the parties pertaining to the subject matter contained in it except as
		expressly provided herein, and supersedes all prior agreements,
		representations, assurances, and understandings of the parties. No amendment
		of, addition to, or modification of this Agreement shall be binding unless
		executed in writing by all the parties. Any term or provision of this Agreement
		may be waived in a signed writing at any time by the party which is entitled to
		the benefit thereof, provided, however, that any waiver shall apply only to the
		specific event or omission waived and shall not constitute a continuing waiver.
		Any term or provision of this Agreement may be amended or supplemented at any
		time by a written instrument executed by all the parties hereto. 
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 
	 
		21. Captions.
	 

	 
		The captions and section headings of this
		Agreement are for convenience and reference only, and shall have no effect on
		the interpretation or construction of this Agreement. 
	 

	 
		22. Applicable Law.
	 

	 
		The substantive laws of the State of Nevada
		shall govern the validity, construction, interpretation, performance, and
		effect of this Agreement.
	 

	 
		23. Arbitration.
	 

	 
		Any controversy or claim arising out of
		this Agreement, other than an action to enforce the provisions of Section 10
		herein or the breach thereof, shall be settled by arbitration according to the
		rules of the American Arbitration Association applicable to disputes arising in
		Nevada and under Nevada law. Any party to the arbitration may enter judgment
		upon the award rendered by the arbitrator in any court having jurisdiction
		thereof. The arbitrator shall not be entitled to amend or alter the terms of
		this Agreement. Notwithstanding this Section 23, the Company shall be entitled
		to seek any available equitable remedy for enforcement of provisions of this
		Agreement. 
	 

	 
		24. Authorization.
	 

	 
		The Company and the Employee, individually
		and severally, represent and warrant to the other party that it has the
		authorization, power and right to deliver, execute and fully perform the
		obligations under this Agreement in accordance with its terms. The Employee
		represents and warrants to the Company that there is no restriction or
		limitation, by reason of this Agreement or otherwise, upon the Employee’s
		right or ability to enter into this Agreement and fulfill his obligations under
		this Agreement. 
	 

	 
		25. Acknowledgment.
	 

	 
		Employee acknowledges that he has given a
		reasonable period of time to study this Agreement before signing it. Employee
		certifies that he has fully read, has received an explanation of, and
		completely understands the terms, nature, and effect of this Agreement.
		Employee further acknowledges that he is executing this Agreement freely,
		knowingly, and voluntarily and that Employee’s execution of this Agreement
		is not the result of any fraud, duress, mistake, or undue influence whatsoever.
		In executing this Agreement, Employee does not rely on any inducements,
		promisers, or representations by the Company or any person other than the terms
		and conditions of this Agreement.
	 

	 
		IN WITNESS WHEREOF, we have executed this
		Agreement on the day and year herein above written. 
	 

	 
		 
	 

	 
			
				
				  COMPANY:
				

			 	
				
				   
				

			 	
				
				  EMPLOYEE:
				

			 
	
				
				  By: 
				

			 	
				
				  
 /s/ Douglas D. Dirks
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ Ann W. Nelson
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 
	
				
				   
				

			 	
				
				  Name: Douglas D. Dirks
				

			 	
				
				   
				

			 	
				
				  Name: Ann W. Nelson
				

			 

 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 
	 
		Appendix A
	 

	 
		Perquisites 
	 

	 
		1. Automobile Allowance in the amount of
		$1,200.00 per month
	 

	 
		2. Annual Executive Physical Examination as
		a part of the Company’s executive wellness program
	 

	 
		3. Life Insurance as a part of the
		Company’s group life insurance program in an amount equal to 3 times the
		Employee’s Base SalaryExhibit 10.6
	 

	 
		

	 

	 
		EMPLOYMENT AGREEMENT
	 

	 
		Employers Insurance Company of Nevada, (the
		“Company”) and Lenard T. Ormsby (the “Employee”) enter this
		Employment Agreement (this “Agreement”) on this 1st day of January,
		2006. 
	 

	 
		RECITALS
	 

	 
		A. Employee has knowledge and experience
		applicable to the position of General Counsel.
	 

	 
		B. The Company is a Nevada domiciled
		insurance company.
	 

	 
		C. The Company desires to employ Employee
		to perform certain services for the Company, and Employee desires to be so
		employed by the Company.
	 

	 
		In consideration of the premises and mutual
		covenants and promises set forth herein, and other good and valuable
		consideration, the receipt and sufficiency of which are mutually acknowledged,
		the parties agree as follows:
	 

	 
		TERM
	 

	 
		1. Employment.
	 

	 
		The Company agrees to employ Employee and
		Employee accepts such employment upon the terms and conditions specified
		herein. Employee agrees to devote substantially all of his time and effort
		during working hours in the performance of the duties called for herein and
		agrees that any other non-employment related duties (i.e., industry related
		groups, service on boards, etc.) will not be allowed to materially interfere
		with the performance of the duties called for herein.
	 

	 
		2. Term.
	 

	 
		The term of this Agreement shall commence
		on the date hereof, and continue for three (3) years, until December 31, 2008
		(the “Expiration Date”) unless sooner terminated in accordance with
		this Agreement. The Company agrees to notify the Employee of its intent whether
		or not to offer another contract of employment to the Employee not later than
		six (6) months prior to the expiration of this Agreement. If the Company
		informs the Employee that the employment will be terminated at the end of the
		term of this Agreement, Employee shall be entitled to reasonable paid
		administrative leave to secure other employment through the end of the
		Agreement. If the Company informs the Employee that a new contract will be
		offered after the expiration of this Agreement, the parties hereto shall
		consummate the terms and conditions of the new contract not less than thirty
		(30) days before the expiration of this Agreement. If the parties cannot agree
		on the terms and conditions of the new contract more than thirty (30) days
		before the expiration of this Agreement, and the Company decides, at that time,
		that further negotiations are not appropriate, the Company shall pay Employee
		severance, in accordance with Paragraph 6(a)(l) herein, upon the termination of
		the Agreement.
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		3. Services and Duties.
	 

	 
		Employee shall serve as General Counsel and
		shall perform such duties as may be assigned by the Chief Executive Officer
		from time to time. At the request of the Board of Directors of the Company,
		Employee shall also serve as a director of the Company and/or one or more of
		the Company’s parent, subsidiaries or affiliates at no additional
		compensation. Employee agrees that upon the termination of his employment with
		the Company, he shall resign from any and all Boards effective on the date of
		the termination of employment.
	 

	 
		4. Insurance.
	 

	 
		The Employee agrees to submit to a physical
		examination at a reasonable time as requested by the Company for the purpose of
		the Company’s obtaining life insurance on the life of the Employee for the
		benefit of the Company; provided, however, that the Company shall bear the
		costs for such examinations and shall pay all premiums on any life insurance
		obtained as a result of such examinations. Employee further agrees to submit to
		drug testing in accordance with the Company policy.
	 

	 
		5. Termination.
	 

	 
		(a) The Company, at any time, may terminate
		this Agreement immediately for Cause. Cause is defined as:
	 

	 
		(i) A material breach of this Agreement by
		Employee;
	 

	 
		(ii) Failure or inability of Employee to
		obtain or maintain any required licenses or certificates;
	 

	 
		(iii) Willful violation by Employee of any
		law, rule or regulation, including without limitation, any material insurance
		law or regulation, which violation may, as determined by the Company, adversely
		affect the ability of Employee to perform his duties hereunder or may subject
		the Company to liability;
	 

	 
		(iv) Election by the Company to discontinue
		the Company’s business; or,
	 

	 
		(v) Conviction of any felony or crime
		including moral turpitude.
	 

	 
		(b) The Employee may terminate this
		Agreement immediately in the event of:
	 

	 
		(i) A material breach of this Agreement by
		the Company; or
	 

	 
		(ii) Willful violation by Employer of any
		law, rule or regulation, including without limitation, any material insurance
		law or regulation, which violation may, as determined by the Employee,
		adversely affect the ability of Employee to perform his duties hereunder or may
		subject the Employee to liability
	 

	 
		(c) The Company may also terminate this
		Agreement upon the occurrence of one or more of the following events, subject
		to applicable law:
	 

	 
		(i) Death of Employee;
	 

	 
		(ii) Employee is deemed to be disabled in
		accordance with the policies of the Company and the law or if Employee is
		unable to perform the essential job functions of Employee’s position with
		the Company, with or without reasonable accommodation, for a period of more
		than 100 business days in any 120 consecutive business day period. Employee is
		entitled to any and all short term or long term disability programs, like any
		other employee, in accordance with the policies of the Company, whether or not
		this Agreement is terminated;
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		(iii) Any event, occurrence, or factual
		situation that, in the sole and absolute discretion of the Company, shall make
		the continued employment of Employee ineffective, inadvisable, or
		unnecessary.
	 

	 
		6. Duties Upon Termination
	 

	 
		(a) If the Company terminates this
		Agreement for any reason before the Expiration Date, other than specified above
		in subsection 5(a) for Cause, 5(c)(l), for the death of the employee, or
		5(C)(2) for disability, or if the Employee terminates this Agreement for Cause
		which has not been cured by the Company within thirty (30) days of receipt of
		written notice of the alleged breach pursuant to Paragraph 5(b), the Employee
		shall receive the following severance pay (the “Severance
		Pay”):
	 

	 
		(i) An amount equal to Base Salary through
		expiration of the term of this Agreement or one months Base Salary (as defined
		below) for each completed year of service with the Company, whichever is
		greater but in no event less than eighteen (18) months, within thirty (30) days
		of the effective date of the termination. The payment amount shall be subject
		to normal payroll deductions at Employee’s then elected rate. Employee
		agrees to pay any federal or state taxes, which are required to be paid by
		Employee beyond the amount of any withholding by the Company;
	 

	 
		(ii) Short term bonus amounts from the
		Executive Bonus Plan, pro-rated for the period of the calendar year in which
		the Employee last performed services for the Company, in accordance with the
		Bonus Plan in effect on the date of the termination;
	 

	 
		(iii) Long term bonus amounts from the
		Executive Bonus Plan, if applicable, either in a lump sum payment made within
		thirty (30) days of the effective date of the termination or, in accordance
		with the payment schedule in the Bonus Plan in effect on the date of the
		termination, such election to be made at the option of the Company; and,

	 

	 
		(iv) Continuation of the insurance coverage
		in effect on the date of the termination, for a period of 18 (eighteen) months
		with the Company paying the employer portion of the premium and the Employee
		paying the employee portion, including dependents if applicable, of the premium
		during the eighteen (18) month period, provided Employee elects to continue
		such insurance coverage under the Consolidated Omnibus Budget Reconciliation
		Act of 1985 (“COBRA”). Employee is solely responsible for taking the
		actions necessary to exercise his rights under COBRA for the insurance coverage
		Employee has in effect, including dependents if applicable, on the date of
		termination.
	 

	 
		(b) The parties agree, in the event of a
		breach of this Agreement by the Company that is not cured in accordance with
		this Agreement, that actual damages are speculative and that the amount of the
		Severance Pay set forth herein is liquidated damages and is a reasonable
		estimate of what damages would be for a breach of this Agreement.
	 

	 
		(c) Employee agrees and acknowledges that
		the following must be satisfied by the Employee before he is entitled to the
		Severance Pay called for herein:
	 

	 
		(i) That Employee return any and all
		Company equipment, software, data or Company property or information, including
		documents and records or copies thereof relating in any way to any proprietary
		information of the Company, its
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		parent, subsidiaries or affiliates whether
		prepared by the Employee or any other person or entity. That Employee further
		agrees that he shall not retain any proprietary information of the Company, its
		parent, subsidiaries or affiliates after the termination of his
		employment;
	 

	 
		(ii) That Employee execute a Global Release
		of Liability, in a form substantially similar to the sample attached hereto,
		which releases liability for any and all claims, whether based in law or
		equity, arising from or associated with Employee’s employment or with this
		Agreement. That Employee further acknowledges and agrees that he has not made
		and will not make any assignment of any claim, cause or right of action, or any
		right of any kind whatsoever, arising from or associated with the employment of
		Employee by the Company; and,
	 

	 
		(iii) That Employee reaffirm the covenants
		contained herein, in writing, including but not limited to the following:
		non-disclosure, non-competition and non-solicitation covenants.
	 

	 
		(d) The Employee may terminate this
		Agreement for reasons other than those identified in Paragraph 5(b) upon not
		less than 60 days prior written notice. If the Employee terminates this
		Agreement pursuant to this paragraph, he shall only be entitled to the
		following:
	 

	 
		(i) Any unpaid salary through the effective
		date of Employee’s resignation from the Company; and
	 

	 
		(ii) Any accrued and unused vacation
		pay.
	 

	 
		7. Compensation, and
		Benefits.
	 

	 
		(a) During the term of this Agreement, the
		Company shall pay to Employee an annual salary of not less than $300,000
		(“Base Salary”), which amount shall be paid according to the
		Company’s regular payroll practices. The Company agrees to review the Base
		Salary on an annual basis and adjust the salary to comply with the executive
		compensation policy in effect at the time of the review. Any increase made to
		the annual salary will establish the new Base Salary for the Employee. The
		Company will provide a one-time signing bonus in the amount of $100,000, due
		within 10 days of the effective date of this agreement. All payments made
		pursuant to this Agreement shall be reduced by and subject to withholding for
		all federal, state, and local taxes and any withholding required by applicable
		laws and regulations.
	 

	 
		(b) The Company may provide an annual
		incentive (the “Annual Incentive”) to the Employee during the Term of
		Employment based on the Employee’s and the Company’s performance, as
		determined by the Board (or a committee thereof) in its sole discretion. If
		such a plan is provided, the Company shall set a target incentive of not less
		than sixty percent (60%) of annual salary. Such annual incentive shall be paid
		in accordance with the Company’s regular practice for its senior officers,
		as in effect from time to time. To the extent not duplicative of the specific
		benefits provided herein, the Employee shall be eligible to participate in all
		incentive compensation, retirement, supplemental retirement, and deferred
		compensation plans, policies and arrangements that are provided generally to
		other senior officers of the Company at a level (in terms of the amount and
		types of benefits and incentive compensation that the Employee has the
		opportunity to receive and the terms thereof) determined in the sole discretion
		of the Board.
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		(c) Employee agrees that the amounts
		payable under this Agreement including but not limited to the amount payable
		under Paragraph 6(a)(l) is good, valuable and separate consideration for the
		non-competition, assignment and release of liability provisions contained
		herein. Employee acknowledges that he is aware of the effect of the
		non-competition, assignment and release of liability provisions contained
		herein and agrees that the amounts payable under this Agreement including but
		not limited to the amount payable under Paragraph 6(a)(l) is sufficient
		consideration for his agreement to these provisions.
	 

	 
		(d) In addition to the compensation called
		for in this Agreement, Employee shall be entitled to any and all benefits and
		perquisites generally provided from time to time to other similarly situated
		officers as well as the benefits and prerequisites attached hereto as Exhibit
		“A” and incorporated herein by this reference.
	 

	 
		8. Licensing.
	 

	 
		Employee has obtained and possesses, or
		will obtain and possess, and will maintain throughout the Term hereof, all
		licenses, approvals, permits, and authorization (the “Licenses”)
		necessary to perform Employee’s duties hereunder, (if any). Any costs,
		attorneys fees, investigations fees or other expenses incurred in connection
		with obtaining or maintaining such Licenses shall be borne by the Company.
		Employee warrants that Employee is fully eligible, under all standards and
		requirements, to obtain, possess, and maintain such Licenses and that Employee
		will commit no acts during the Term hereof that would jeopardize or eliminate
		Employee’s ability to possess or maintain such Licenses.
	 

	 
		9. Rules and Regulations.
	 

	 
		Employee shall observe, enforce, and comply
		with the policies, philosophies, strategies, rules, and regulations of the
		Company, as they may be promulgated and/or modified from time to time, and
		shall carry out and perform the orders, directions, and policies of the
		Company, as they may be stated and/or amended from time to time, either orally
		or in writing. A violation of this Section 8 by Employee is a material breach
		of this Agreement.
	 

	 
		10. Restrictive Covenants.
	 

	 
		In consideration of the amount payable
		under Paragraph 6(a)(l), the other compensation paid hereunder, and other good
		and valuable consideration, the receipt and sufficiency of which is
		acknowledged by the parties, the parties agree to the following provisions of
		this Section 10:
	 

	 
		(a) Non-Competition. Employee understands
		and agrees that the Company does business throughout the State of Nevada and
		other states. Employee further understands and agrees that he is a high ranking
		officer of the Company and will have access to confidential and trade secret
		information of the Company and to its goodwill that will allow Employee to
		unfairly compete with the Company justifying this restriction. For a period of
		one (1) year following the termination of Employee’s employment hereunder
		for any reason, including expiration of the Term of this Agreement, Employee
		agrees that, without the written permission of the Company, he will not engage
		(whether as owner, partner, controlling stockholder, controlling investor,
		employee, adviser, 
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		consultant, or otherwise) in any business
		that is in direct competition with the Business, as of the Applicable Date (as
		defined below), in Nevada and any other state in which the Company is
		conducting its Business (the “Non-Compete Area”)as of the effective
		date of the termination. “Applicable Date” is the date of termination
		or the date the Employee executes the Global Mutual Release of Liability in
		accordance with this Agreement, whichever is later.
	 

	 
		(b) Non-Solicitation. Without limiting the
		generality of the foregoing, Employee agrees that for a period of one (1) year
		following the Applicable Date, he will not, without the prior written consent
		of the Company, directly or indirectly solicit or attempt to solicit, within
		the Non-Compete Area, any business from any person or entity that the Company
		called upon, solicited, or conducted business with as of the effective date of
		the termination, any persons or entities that have been customers of the
		Company or recruit or hire any person who has been or is an employee of the
		Company, its parent, subsidiaries or affiliates during the preceding one-year
		period from the date of termination of this Agreement. In addition, Employee
		agrees that he shall not directly or indirectly solicit or encourage any
		employee of Company to go to work for or with Employee for a period of one-year
		following the date of termination of this Agreement. In the event of the
		violation of this Section 10, the Company will be entitled to, in addition to
		any other remedies provided by law or equity, obtain injunctive relief and the
		specific performance of this covenant. Should Employee violate this Section 10,
		the period of time for this Paragraph will automatically be extended for the
		period of time from which Employee began such violation until he permanently
		ceases such violation. The Employee acknowledges that this Section 10 is
		necessary to protect the interests of the Company, and that the restrictions
		contained herein are reasonable in light of the consideration and other value
		the Employee has accepted pursuant to this Agreement. If any provision of this
		covenant is invalid in whole or in part, it will be limited, whether as to
		time, area covered, or otherwise as and to the extent required for its validity
		under the applicable law and as so limited, will be enforceable.
	 

	 
		(c) Confidential Information. Employee
		acknowledges that he has had or will have access to the Company’s
		confidential information and that of its parent, subsidiaries and affiliates
		(including, but not limited to, records regarding sales, price and cost
		information, marketing plans, customer names, customer lists, sales techniques,
		distribution plans or procedures, and other material relating to the
		Company’s Business), proprietary, or trade secret information (the
		“Confidential Information”), and agrees never to use the Confidential
		Information other than for the sole benefit of the Company and further agrees
		to never disclose such Confidential Information (except as may be required by
		regulatory authorities or as may be required by law) to any entity or person
		that is not an officer or employee (unless at such time such Confidential
		Information is subject to a policy of the Company restricting disclosure to
		non-officers) of the Company at the time of such disclosure, without the prior
		written consent of the Company. Employee further acknowledges that this
		covenant to maintain Confidential Information is necessary to protect the
		goodwill and proprietary interests of the Company, its parent, subsidiaries or
		affiliates and the restriction against the disclosure of Confidential
		Information is reasonable in light of the consideration and other value the
		Employee has received or will receive pursuant to this Agreement.
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		(d) Employee agrees to cooperate with the
		Company in any litigation, administrative proceeding, investigation or audit
		involving any matters with which Employee has knowledge of from his employment
		with the Company. The Company shall reimburse Employee for reasonable expenses,
		including reasonable compensation for services rendered at his hourly rate of
		compensation on the date of termination of the Agreement, incurred in providing
		such assistance and approved by the Company.
	 

	 
		(e) In the event of a violation of this
		Section 10, the Company shall be entitled to any form of relief at law or
		equity, and the parties agree and acknowledge that injunctive relief is an
		appropriate, but not exclusive, remedy to enforce the provisions hereof. The
		existence of any claim or cause of action of Employee against the Company,
		whether predicated on this Agreement or otherwise, shall not constitute a
		defense of the Company’s enforcement of the covenants set forth in this
		Section 10. The Employee hereby submits to the jurisdiction of the courts of
		the State of Nevada and federal courts therein for the purposes of any actions
		or proceedings instituted by the Company to enforce its rights under this
		Agreement, to seek money damages or seek injunctive relief. Employee further
		acknowledges and agrees that the obligations contained in Section 10 of this
		Agreement are fair, do not unreasonably restrict Employee’s further
		employment and business opportunities, and are commensurate with the
		compensation arrangements set out in this Agreement. The covenants contained in
		Section 10 shall each be construed as an Agreement independent of any other
		provisions of this Agreement. Both parties intend to make the covenants of
		Section 10 binding only to the extent that it may be lawfully done under
		existing applicable laws. If a court of competent jurisdiction decides any part
		of any covenant is overly broad, thereby making the covenant unenforceable, the
		parties agree that such court shall substitute a reasonable, judicially
		enforceable limitation in place of the offensive part of the covenant and as so
		modified the covenant shall be as fully enforceable as set forth herein by the
		parties themselves in the modified form.
	 

	 
		(f) Employee acknowledges that it is
		possible that the corporate structure of the Company could change during the
		term of this Agreement. Employee hereby acknowledges and affirms that the
		Company may assign its rights under this Agreement to a third-party without the
		approval of or additional consideration to Employee. Employee acknowledges and
		agrees that the consideration called for herein is good and sufficient
		consideration for the Company’s right to assign its rights under this
		Agreement.
	 

	 
		(g) Sections 10(a) through (f), inclusive,
		of this Agreement shall survive either termination of the employment
		relationship or termination of this Agreement for the full period set forth in
		Sections 10(a) through (e), inclusive.
	 

	 
		11. Employee Benefits.
	 

	 
		Employee shall be entitled to receive
		employee benefits and other employment-related perquisites as shall be
		established or revised by the Company from time to time for similarly situated
		employees. Employee shall receive full medical coverage, dependent medical
		coverage, life insurance, and such other employee benefits on the same terms as
		officers at the same level within the Company.
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		12. Work for Hire.
	 

	 
		Employee agrees that any work, invention,
		idea or report which he produces or which results from or is suggested by the
		work Employee does on behalf of the Company, its parent, subsidiaries or
		affiliates is a “work for hire” (hereinafter referred to as
		“Work”) and will be the sole property of the Company. The Employee
		agrees to sign any documents, during or after employment, which the Company
		deems necessary to confirm its ownership of the Work, and Employee agrees to
		cooperate with the Company to allow the Company to take advantage of it
		ownership of such Work.
	 

	 
		13. Assignment of Agreement.
	 

	 
		Employee agrees that his services are
		unique and personal and that, accordingly, Employee may not assign his rights
		or delegate his duties or obligations under this Agreement. The Company may
		assign its rights, duties, and obligations under this Agreement to any
		successor to its business. This Agreement shall inure to the benefit of and be
		binding upon the Company’s successors and assigns.
	 

	 
		14. Indemnification of Employee.
	 

	 
		The Company shall indemnify the Employee
		and hold him harmless for acts or decisions made by him in good faith while
		performing services for the Company, its parent, subsidiaries and affiliates to
		the full extent allowed by law. The Company shall also use its reasonable
		efforts to obtain coverage for him under any insurance policy now in force or
		hereinafter obtained during the term of this Agreement covering the officers
		and directors of the Company against lawsuits, subject to the business judgment
		of the Board. The Company shall pay all expenses, including attorneys’
		fees of an attorney selected and retained by the Company to represent the
		Employee, actually and necessarily incurred by the Employee in connection with
		the defense of such act, suit, or proceeding and in connection with any related
		appeal, including the cost of court settlements.
	 

	 
		15. Notices.
	 

	 
		Any notice, document, or other
		communication (hereinafter “Notice”) which either party may be
		required or may desire to give to the other party shall be in writing, and any
		such notice may be given or delivered personally or by mail. Any such notices
		given or delivered personally shall be given or delivered by hand to an officer
		of the entity to which they are being given or delivered or the individual, as
		the case may be, and shall be deemed given or delivered when so given or
		delivered by hand. Any such notices given or delivered by mail shall be deemed
		given or delivered three (3) days after it is deposited in the U.S. mail,
		certified or registered mail, return receipt requested, with all postage and
		fee prepaid, address to the person or entity in question as follows:
	 

	 
		If to the Employee:
	 

	 
		Lenard T. Ormsby 
	 

	 
		14045 Edwards Dr
	 

	 
		Reno, Nevada 89511
	 

	 
		If to the Company:
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		Douglas D. Dirks
	 

	 
		9790 Gateway Drive, Suite 200
	 

	 
		Reno, Nevada 89521
	 

	 
		or, in either case, to such other address
		as either party may have previously notified the other pursuant to the
		provisions of this Section 15.
	 

	 
		16. Severability.
	 

	 
		In the event that any provision hereof
		shall be declared by a court of competent jurisdiction to be void or voidable
		as contrary to law or public policy, such declaration shall not affect the
		continuing validity or enforceability of any other provisions hereof insofar as
		it may be reasonable and practicable to continue to enforce such other
		provision in the absence of the provision which shall have been declared to be
		void and voidable.
	 

	 
		17. Remedy for Breach.
	 

	 
		Both parties recognize that the services to
		be performed by the Employee are special and unique. The Company will have the
		right to seek and obtain damages and any available equitable remedies for
		Employee’s breach of this Agreement. The Employee’s remedy for any
		breach of this Agreement is strictly limited to the Severance Pay called for
		herein.
	 

	 
		18. Mitigation of Damages.
	 

	 
		Employee shall not be required to mitigate
		damages or the amount of any payment provided under this Agreement by other
		employment or otherwise after the termination of employment hereunder, and any
		amounts earned by Employee, whether from self-employment or other employment
		shall not reduce the amount of any Severance Pay called for herein.
	 

	 
		19. Attorneys’ Fees and Costs.
	 

	 
		In any claim or dispute between the parties
		arising out of or associated with this Agreement or the breach hereof, the
		prevailing party shall be entitled to recover all reasonable attorneys’
		fees, expenses, and costs thereof or associated therewith. The term
		“prevailing party” means the party obtaining substantially the relief
		sought via litigation or through an action in arbitration.
	 

	 
		20. Integration, Amendment, and Waiver.
	 

	 
		This Agreement and such other written
		agreements referenced in this Agreement, constitute the entire agreement
		between the parties pertaining to the subject matter contained in it except as
		expressly provided herein, and supersedes all prior agreements,
		representations, assurances, and understandings of the parties. No amendment
		of, addition to, or modification of this Agreement shall be binding unless
		executed in writing by all the parties. Any term or provision of this Agreement
		may be waived in a signed writing at any time by the party which is entitled to
		the benefit thereof, provided, however, that any waiver shall apply only to the
		specific event or omission waived and shall not constitute a continuing waiver.
		Any term or provision of this Agreement may 
	 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		 
	 

	 
		 
	 

	 
		be amended or supplemented at any time by a
		written instrument executed by all the parties hereto.
	 

	 
		21. Captions.
	 

	 
		The captions and section headings of this
		Agreement are for convenience and reference only, and shall have no effect on
		the interpretation or construction of this Agreement.
	 

	 
		22. Applicable Law.
	 

	 
		The substantive laws of the State of Nevada
		shall govern the validity, construction, interpretation, performance, and
		effect of this Agreement.
	 

	 
		23. Arbitration.
	 

	 
		Any controversy or claim arising out of
		this Agreement, other than an action to enforce the provisions of Section 10
		herein or the breach thereof, shall be settled by arbitration according to the
		rules of the American Arbitration Association applicable to disputes arising in
		Nevada and under Nevada law. Any party to the arbitration may enter judgment
		upon the award rendered by the arbitrator in any court having jurisdiction
		thereof. The arbitrator shall not be entitled to amend or alter the terms of
		this Agreement. Notwithstanding this Section 23, the Company shall be entitled
		to seek any available equitable remedy for enforcement of provisions of this
		Agreement.
	 

	 
		24. Authorization.
	 

	 
		The Company and the Employee, individually
		and severally, represent and warrant to the other party that it has the
		authorization, power and right to deliver, execute and fully perform the
		obligations under this Agreement in accordance with its terms. The Employee
		represents and warrants to the Company that there is no restriction or
		limitation, by reason of this Agreement or otherwise, upon the Employee’s
		right or ability to enter into this Agreement and fulfill his obligations under
		this Agreement.
	 

	 
		25. Acknowledgment.
	 

	 
		Employee acknowledges that he has given a
		reasonable period of time to study this Agreement before signing it. Employee
		certifies that he has fully read, has received an explanation of, and
		completely understands the terms, nature, and effect of this Agreement.
		Employee further acknowledges that he is executing this Agreement freely,
		knowingly, and voluntarily and that Employee’s execution of this Agreement
		is not the result of any fraud, duress, mistake, or undue influence whatsoever.
		In executing this Agreement, Employee does not rely on any inducements,
		promises, or representations by the Company or any person other than the terms
		and conditions of this Agreement.
	 

	 
		IN WITNESS WHEREOF, we have executed this
		Agreement on the day and year herein above written.
	 

	 
		 
	 

	 
			
				
				  COMPANY:
				

			 	
				
				   
				

			 	
				
				  EMPLOYEE:
				

			 
	
				
				  
 By: 
				

			 	
				
				   /s/ Douglas D. Dirks
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				   /s/ Lenard T. Ormsby
				

			 
	
				
				   
				

			 	
				
				

				
 	
				
				   
				

			 	
				
				   
				

			 	
				
				

				
 
	
				
				   
				

			 	
				
				  Name: Douglas D. Dirks
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: Lenard T. Ormsby
				

			 

 

	 
		 
	 

	 
		 
	 

	 

	 
	 

	 

	 
		Appendix A
	 

	 
		Perquisites
	 

	 
		1. Automobile Allowance in the amount of $
		1,200.00 per month
	 

	 
		2. Annual Executive Physical Examination as
		a part of the Company’s executive wellness program
	 

	 
		3. Life Insurance as a part of the
		Company’s group life insurance program in an amount equal to 3 times the
		Employee’s Base Salary

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