Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the 9th day of September, 1997, by and between Xxxxxx Lease Finance
Corporation ("Employer"), a California corporation, and Xxxxx X. XxXxxxx
(hereinafter referred to as "Employee");
WITNESSETH:
WHEREAS, Employer desires to employ Employee, and Employee desires to be
employed by Employer, upon the terms and conditions set forth in this
Employment Agreement; and
WHEREAS, Employee acknowledges that he has had an opportunity to
consider this Agreement and consult with independent advisor(s) of his
choosing with regard to the terms of this Agreement, and enters this
Agreement voluntarily and with a full understanding of its terms;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants hereinafter set forth, Employer and Employee agree as follows:
1. EMPLOYMENT AND TERM. Employer agrees to employ Employee as
Executive Vice President, Finance and Chief Financial Officer for a period of
two (2) years ("Initial Employment Period") commencing on or about September
15, 1997, and ending on or about September 14, 1999 unless terminated prior
thereto in accordance with Section 4 hereof. Each full twelve month period
Employee is employed by Employer shall be referred to herein as an
"Employment Year." The entire duration of Employee's employment by Employer
hereunder shall be referred to herein as the "Employment Period." Employee
shall devote his full time and attention, with undivided loyalty, to the
business and affairs of Employer during the Employment Period. Employee
shall not engage in any other business or job activity during the Employment
Period without Employer's prior written consent, other than has been
previously disclosed on Exhibit A hereto, with Employee agreeing that such
activities disclosed on Exhibit A shall not in any way interfere with his
duties hereunder. Employee shall in good faith perform those duties and
functions as are required by his position and as are determined and assigned
to him from time to time by the Board of Directors of Employer or its
designate(s). Notwithstanding the foregoing or any other provision in this
Agreement, Employer shall have the right to modify from time to time the
title and duties assigned to Employee.
After the expiration of the Initial Employment Period pursuant to this
Agreement, Employee's employment will automatically renew for a period of one
year, each year, on the same terms and conditions as are set forth herein,
unless either party gives the other notice of nonrenewal at least six (6)
months prior to the end of the last applicable Employment Year. Employer may
in its sole discretion elect to pay Employee the equivalent of six months
base salary in lieu of notice in the event of nonrenewal of this Agreement.
2. COMPENSATION. During the Employment Period, Employee shall receive
compensation from Employer for his services hereunder determined as follows:
BASE SALARY. Employer agrees to pay to Employee during the Employment
Period a base salary (hereafter referred to as the "Base Salary"), in the
amount of One Hundred Sixty Thousand Dollars ($160,000.00) per Employment
Year, to be paid not less frequently than monthly in accordance with
Employer's usual payroll practices. The Board of Directors will review
Employee's Base Salary no less than once annually, and shall have sole
discretion to increase or decrease the Base Salary, so long as the Base
Salary is not set below $160,000.00.
PROFIT INCENTIVE PLAN. Employee will be eligible to participate in the
Xxxxxx Lease Profit Incentive Plan under which Employee will be eligible for
an annual bonus. As currently written for the calendar year 1997 Employee
would be entitled to a bonus of 85% of his Base Salary if the Employer meets
the analysts projections as to new lease volume and after-tax profit. Bonuses
will increase if projections are exceeded, and will be reduced if they fall
below projections, with no bonus paid if the actual results are less than 75%
of projections. Because the terms of Employee's Employment Period will
commence in the middle of the calendar year, Employee will be eligible for a
pro rata portion of his bonus based upon that period of the calendar year for
which he has actually been employed. The complete terms and conditions of
the Profit Incentive Plan are set forth in the separate documents governing
such plan and Employee agrees to be bound by the provisions contained therein.
SIGNING BONUS. Employer shall pay to Employee the amount of $30,000.
The signing bonus shall be delivered to Employee no later than twenty (20)
days subsequent to the date on which the Employee commences employment
pursuant to this Agreement. Employee shall be required to reimburse Employer
for the full amount of the signing bonus in the event that Employee
terminates this Agreement within twelve months of the commencement of
employment hereunder or is terminated for cause.
3. FRINGE BENEFITS. During the Employment Period, Employer agrees to
provide Employee with the following fringe benefits:
(A) BUSINESS EXPENSE REIMBURSEMENT. Employee shall be authorized to
incur reasonable business expenses in performing his duties under this
Agreement, including, but not limited to, expenses for entertainment, long
distance telephone calls, lodging, meals, air fare, transportation and
travel. Employer will reimburse Employee for all such reasonable expenses
upon presentation by Employee, from time to time, of an itemized account or
other appropriate documentation of such expenses.
(B) VACATION. After completing six full months of employment, Employee
shall be entitled to three (3) weeks of paid vacation during each Employment
Year thereafter; provided, however, that Employer and Employee must mutually
agree as to the time during any Employment Year when such vacation may be
taken.
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(C) BENEFITS. Employee will be eligible to participate in benefit
plans and policies provided to other Employer employees of similar status, on
the terms and conditions existing, and as may be changed from time to time,
for participation in those plans and policies.
(D) STOCK OPTIONS. Employee will be eligible to participate in the
Employee Stock Option Plan and Employee Stock Purchase Plan subject to the
terms and conditions set forth in detail in the separate Stock Option and
Stock Purchase Plan documents. The terms of vesting applicable to Employee
are set forth in detail in the separate plan documents, and Employee agrees
to be bound by the provisions contained therein, except as otherwise provided
in this Agreement. Pursuant to the 1996 Stock Option/Stock Issuance Plan,
Employee shall be granted 30,000 shares of Xxxxxx Lease Finance Corporation
stock, subject to approval by the Board of Directors. The shares shall
become exercisable in four (4) equal successive annual installments, so long
as Employee continues his employment with Employer, the first twenty five
percent (25%) to vest after Employee completes one full year of employment.
4. TERMINATION. Either Employer or Employee may terminate Employee's
employment in accordance with the following provisions:
(A) TERMINATION BY EMPLOYER. The employment of Employee may be
terminated by Employer for any reason or no reason, with or without cause or
justification, subject to the following:
(i) In the event that Employee's employment is terminated by Employer
for cause, Employer's total liability to Employee or his heirs shall be
limited to payment of Employee's Base Salary and benefits through the
effective date of termination, and Employee shall not be entitled to any
further compensation or benefits provided under this Agreement. In the
event that Employee's employment is terminated by Employer due to his death
or due to Employee's inability to properly perform his duties by reason of
incapacity for a period of more than ninety (90) days, Employer's total
liability to Employee or his heirs shall be limited to payment of
Employee's accrued bonus, if any, his Base Salary and benefits through the
effective date of termination, and Employee shall not be entitled to any
further compensation or benefits provided under this Agreement.
(a) Cause for termination shall include, but shall not be
limited to: (1) Employee's conviction of or plea of nolo contendere to
any felony or gross misdemeanor charges brought in any Court of
competent jurisdiction; (2) Any fraud, misrepresentation or gross
misconduct by Employee against Employer; (3) Employee's breach of this
Agreement.
(ii) In the event Employee's employment is terminated by Employer
other than for cause, Employer will provide not less than six (6) months
notice of termination or an amount equal to six (6) months of Employee's
Base Salary in lieu of notice and Employee will be paid his Base Salary and
Benefits through the date of termination. The notice period and/or
payments in lieu of notice provided herein shall be terminated in the event
Employee obtains new employment after receiving notice of termination from
Employer.
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(B) TERMINATION BY EMPLOYEE. If Employee's employment with Employer is
terminated by Employee for any reason, Employee shall be entitled only to his
Base Salary and benefits through the date of termination and shall not be
entitled to any further compensation or benefits pursuant to this Agreement.
Employee agrees to give Employer at least ninety (90) days prior written
notice of termination of his employment. Employer shall have the right in
its sole discretion to continue to employ Employee for ninety days, or for a
shorter period with pay in lieu of notice to Employee in the amount to which
Employee would have been entitled if employed for the ninety-day notice
period.
5. MAINTENANCE OF CONFIDENTIALITY AND DUTY OF LOYALTY.
Employee acknowledges that, pursuant to his employment with Employer, he
will necessarily have access to trade secrets and information that is
confidential and proprietary to Employer in connection with the performance
of his duties. In consideration for the disclosure to Employee of, and the
grant to Employee of access to such valuable and confidential information and
in consideration of his employment, Employee shall comply in all respects
with the provisions of this Section 5.
(A) NONDISCLOSURE. During the Employment Period and thereafter,
Confidential and Proprietary Information of Employer of which Employee gains
knowledge during the Employment Period or prior thereto in connection with
his hiring shall be used by Employee only for the benefit of Employer in
connection with Employee's performance of his employment duties, and Employee
shall not, and shall not allow any other person that gains access to such
information in any manner or form, disclose, communicate, divulge or
otherwise make available, or use, any such information, other than for the
immediate benefit of Employer and without the prior written consent of
Employer. For purposes of this Agreement, the term "Confidential and
Proprietary Information" means information not generally known to the public
and which is proprietary to Employer and relates to Employer's existing or
reasonably foreseeable business or operations, including but not limited to
trade secrets, business plans, advertising or public relations strategies,
financial information, budgets, personnel information, customer information
and lists, and information pertaining to research, development,
manufacturing, engineering, processing, product designs (whether or not
patented or patentable), purchasing and licensing, and may be embodied in
reports or other writings or in blue prints or in other tangible forms such
as equipment and models. Employee will refrain from any acts or omissions
that would jeopardize the confidentiality or reduce the value of any Employer
Confidential and Proprietary Information.
(B) COVENANT OF LOYALTY. During the Employment Period and for any
period Employee is receiving compensation from Employer, Employee shall not,
on his own account or as an employee, agent, promoter, consultant, partner,
officer, director, or as a more than 1% shareholder of any other person,
firm, entity, partnership or corporation, own, operate, lease, franchise,
conduct, engage in, be connected with, have any interest in, or assist any
person or entity engaged in any business in the continental United States
that is in any way competitive with or similar to the business that is
conducted by Employer or is in the same general field or industry as Employer.
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Without limiting the generality of the foregoing, Employee does hereby
covenant not to, during the Employment Period and for any period that he is
receiving compensation from Employer:
(i) solicit, accept or receive any compensation from any
customer of Employer or any business competitive to that of Employer; or
(ii) contact, solicit or call upon any customer or supplier of
Employer on behalf of any person or entity other than Employer for the
purpose of selling, providing or performing any services of the type
normally provided or performed by Employer; or
(iii) induce or attempt to induce any person or entity to curtail
or cancel any business or contracts which such person or entity had with
Employer; or
(iv) induce or attempt to induce any person or entity to
terminate, cancel or breach any contract which such person or entity has
with Employer, or receive or accept any benefits from such termination,
cancellation or breach.
(C) NO SOLICITATION. During the Employment Period, during any period
Employee is receiving compensation from Employer and for one year thereafter,
Employee agrees not directly or indirectly to solicit, induce or attempt to
solicit or induce any employee of Employer to terminate his or her employment
with Employer in order to become employed by any other person or entity.
(D) INJUNCTIVE RELIEF. Employee expressly agrees that the covenants
set forth in this Section 5 are reasonable and necessary to protect Employer
and its legitimate business interests, and to prevent the unauthorized
dissemination of Confidential Information to competitors of Employer.
Employee also agrees that Employer will be irreparably harmed and that
damages alone cannot adequately compensate Employer if there is a violation
of this Section 5 by Employee, and that injunctive relief against Employee is
essential for the protection of Employer. Therefore, in the event of any
such breach, it is agreed that, in addition to any other remedies available,
Employer shall be entitled as a matter of right to injunctive relief in any
court of competent jurisdiction, plus attorneys' fees actually incurred for
the securing of such relief. Furthermore, Employee agrees that Employer shall
not be required to post a bond or other collateral security with the court if
Employer seeks injunctive relief. To the extent any provision of this Section
5 is deemed unenforceable by virtue of its scope or limitation, Employee and
Employer agree that the scope and limitation provisions shall nevertheless be
enforceable to the fullest extent permissible under the laws and public
policies applied in such jurisdiction where enforcement is sought.
6. NOTICES. Any notice which either party may wish or be required to
give to the other party pursuant to this Agreement shall be in writing and
shall be either personally served or deposited in the United States mail,
registered or certified and with proper postage prepaid, addressed as follows:
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TO EMPLOYER: Xxxxxx Lease Finance Corporation
Xxxxxxx X. Xxxxxx, President and CEO
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX. 00000
TO EMPLOYEE: Xxxxx X. XxXxxxx
0000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
or to such other address as the parties may designate from time to time by
written notice to the other party given in the above manner. Notice given by
personal service shall be deemed effective upon service. Notice given by
registered or certified mail shall be deemed effective three (3) days after
deposit in the mail.
7. MISCELLANEOUS.
(A) MODIFICATIONS. This Agreement supersedes all prior agreements and
understandings between the parties relating to the employment of Employee by
Employer, and it may not be changed or terminated orally. No modification,
termination, or attempted waiver of any other provisions of this Agreement
shall be valid unless in writing signed by the party against whom the same is
sought to be enforced.
(B) ENFORCEABILITY AND SEVERABILITY. If any term of this Agreement is
deemed void, voidable, invalid or unenforceable for any reason, such term
shall be deemed severable from all other terms of this Agreement, which shall
continue in full force and effect.
(C) PRIOR OBLIGATIONS OF EMPLOYEE. Employee represents and warrants
that by entering this Agreement he is not breaching any contractual
relationship or obligation toward any person or entity. Furthermore, he
understands that Employer is hiring him solely for the purpose of engaging
his skill and expertise and not to acquire trade secrets or confidential
information belonging to any other person or entity. Employee further
understands that he is prohibited from disclosing such trade secrets and
proprietary information to Employer.
(D) ARBITRATION. Any disputes or controversy between the parties to
this Agreement, including allegations of fraud and misrepresentation, arising
from or as a result of this Agreement, the resulting business dealings
between Employer and Employee, Employee's employment or the termination
thereof, including any claims of discrimination or other claims under any
federal, state, or local law or regulation now in existence or hereinafter
enacted concerning in any way the subject of Employee's employment with
Employer or its termination, shall be resolved, after the parties attempt
informal resolution, exclusively by arbitration in accordance with the Rules
and Regulations of the American Arbitration Association, by an arbitrator
knowledgeable in employment law. All Arbitration hearings shall be held in
San Francisco County, California within one hundred twenty (120) days from
the date Arbitration is demanded by any of the parties and the Arbitrator
shall render his/her written decision within thirty (30) days after the
Arbitration hearing has concluded. The decision of the Arbitrator shall be
final and binding on all parties, and may be entered as a judgment by any
party with any
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federal or state court of competent jurisdiction. The parties to the
Arbitration hearing shall share any filing fees and Arbitrator's fees which
must be paid in advance of the hearing equally; however, as set forth below
the prevailing party shall be entitled to recover from the losing party all
costs that it has incurred as a result of the Arbitration hearing, including
fees paid to the arbitrator, travel costs and attorneys' fees. This
provision shall not alter the rights of the parties to seek and obtain the
provisional equitable remedies provided under any applicable state or federal
law. Employee represents, by his signature, that he is making a voluntary
and knowing waiver of his right to pursue any and all employment-related
claims in court.
(E) SUCCESSORS. This Agreement shall extend to and be binding upon
Employee, his legal representatives, heirs and distributees, and upon
Employer, its successors and assigns.
(F) GOVERNING LAW. This Agreement and all remedies hereunder shall be
construed and enforced in accordance with the laws of the State of California.
(G) JURISDICTION; VENUE; ATTORNEYS' FEES. The parties do hereby agree
and submit to personal jurisdiction in the State of California for the
purposes of any proceedings brought to enforce or construe the terms of this
Agreement or to resolve any dispute or controversy arising under, as a result
of, or in connection with this Agreement, and do hereby agree and stipulate
that any such proceedings shall be venued and held in San Francisco County,
California. The prevailing party in any such proceeding shall be entitled to
recover from the losing party all costs that it has incurred as a result of
such proceeding including but not limited to all travel costs and attorneys'
fees.
(H) EFFECTIVE DATE. This Agreement shall be effective as of the date
first above written.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed effective as of the date first set forth above.
Employer:
XXXXXX LEASE FINANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx, XX
----------------------------------
President and CEO
Employee:
/s/ Xxxxx X. XxXxxxx
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XXXXX X. XXXXXXX
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