Employment Agreement - Richard M. Kurz

EMPLOYMENT AGREEMENT


This Agreement, entered into effective as of August 21, 1997, is by and among AMERICAN EAGLE GROUP, INC., a Delaware corporation (the "Employer"), the Committee of the American Eagle Group, Inc. 1994 Stock Incentive Plan (the "Committee") and Richard M. Kurz, (the "Employee").


The Employer desires to employ the Employee and the Employee is willing to serve the Employer on the terms and conditions provided in this Agreement. Therefore, the parties hereby agree as follows:


1. EMPLOYMENT. The Employer agrees to employ the Employee as Senior Vice President and Chief Financial Officer or in any other position with substantially similar title, duties and responsibilities to which Employee may be elected or appointed by the Board of Directors of the Employer. Employee agrees to serve in any such capacity and perform the duties prescribed from time to time by the Bylaws or the Board of Directors of the Employer upon the terms and conditions set forth in this Agreement.


2. TERM. Unless Employee's employment is sooner terminated in accordance with the provisions hereof, the term of employment shall extend from the date hereof until February 28, 1998.

3. COMPENSATION. The Employee shall receive the following compensation for his services:


(a) A lump sum payment of $121,875 payable upon the execution of this Agreement; 2
(b) Cash salary compensation for the term of employment hereunder of not less than the appropriate pro rata portion of an annualized salary of $162,500; and


(c) Participation in the employee benefit plans maintained by the Employer for its employees generally, as such plans are in effect from time to time in accordance with their terms and the particular term of this Agreement.


4. REIMBURSEMENT OF BUSINESS EXPENSES. The Employer shall reimburse the Employee for all reasonable business expenses incurred by the Employee in accordance with the policies of the Employer in effect from time to time, upon presentation of proper supporting documentation therefor.


5. EXTENT OF SERVICE. The Employee shall devote substantially all of his time, attention and energy to the business of the Employer and its subsidiaries and shall not, during the term of this Agreement, be actively engaged in any other business activity for gain, profit, or other pecuniary advantage. This Section shall not prohibit the Employee from engaging in business activities or other activities or services that do not conflict with the Employee's performance of his duties hereunder, or making personal passive investments in other business activities.


6. TERMINATION.


(a) The employment of Employee shall terminate upon the occurrence of any of the following:


(i) The death of the Employee;


(ii) The delivery by the Employer to the Employee of written
notice of termination of employment due to the disability
of the Employee, where "disability" shall mean the
Employee's


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inability, because of injury or illness, whether
physical or mental, to perform the material services to
the Employer contemplated by this Agreement.


(iii) The delivery by the Employer to the Employee of written
notice of termination of employment due to conduct by
the Employee constituting (A) a willful and knowing
violation of any law, rule or regulation, or causing
the Employer to willfully knowingly violate any law,
rule or regulation, which in either case is materially
and demonstrably injurious to the Employer; (B) fraud;
(C) misappropriation of the Empl ...