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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 12, 1998 by and between Xxxxx
Leasing Technologies, Inc., a Massachusetts corporation, (the "Company") and
Xxxxx X. Xxxxxxxxx, (the "Executive") residing at 00 Xxxxxxx Xxxx, Xxxxxxxx
Xxxx, XX 00000.
WHEREAS Executive has served as President and Chief Executive Officer of
the Company pursuant to an Employment Agreement dated September 26, 1997 (the
"Original Employment Agreement"); and
WHEREAS the Company desires to continue to employ Executive and to enter
into this Agreement embodying the terms of such continued employment (the
"Agreement"); and
WHEREAS Executive desires to accept such continued employment and enter
into this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. TERM OF EMPLOYMENT. Subject to the provisions of Section 7, Executive
shall be employed by the Company pursuant to the terms and conditions of this
Agreement for a period commencing on June 12, 1998 (the "Commencement Date")
and ending June 12, 2001; PROVIDED that such period shall be automatically
extended for one year on June 12, 2001 and June 12 of any succeeding year
unless a minimum of six months prior notice is given by either party to the
other. The period beginning on the Commencement Date and ending June 12, 2001,
or upon the expiration of any renewal period, in either case in accordance with
the foregoing provision, shall be referred to as the "Employment Term".
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2. POSITION. (a) The Executive shall continue to serve as President and
Chief Executive Officer of the Company and in the event of an internal corporate
restructuring, shall serve in a position or positions of comparable authority
and responsibility in any resulting entity. In such positions, Executive shall
have such duties and authority as shall be determined from time to time by the
Board of Directors of the Company (the "Board") or its designee which shall not
be less than that assigned to him on the Commencement Date.
(b) During the term of his employment hereunder, Executive will
devote substantially all of his business time and best efforts to the
performance of his duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict with
the rendition of such services either directly or indirectly, without the prior
written consent of the Board.
3. BASE SALARY. The Company shall pay Executive an annual base salary
(the "Base Salary") at the initial rate of $250,000 payable in arrears in
substantially equal installments not less frequently than monthly in accordance
with the Company's payroll practices during the Employment Term. The Company
shall increase (but not decrease) the Base Salary on each January 1 which
occurs during the Employment Term after June 12, 1998 by a percentage equal to
the percentage increase in the Consumer Price Index for all Urban Consumers for
the Northeast Region, class B metropolitan area, for the twelve (12) month
period ending on each such January 1. In addition to any automatic increases
hereunder, the Company, at any time, may in its sole discretion increase
Executive's Base Salary.
4. INCENTIVE COMPENSATION. (a) With respect to each fiscal year during
all of which Executive is employed with the Company, including the fiscal year
beginning January 1, 1998,
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he shall also be eligible to participate in the Company's annual bonus program
as such program may be modified by the Board of Directors.
(b) With respect to each performance period during which Executive is
employed by the Company, including the performance period beginning January 1,
1998, the Executive shall also be eligible to participate in the Company's
profit-sharing plan as such plan may be modified by the Board of Directors.
(c) Executive shall be eligible to participate in the 1987 Stock
Option Plan, the 1998 Equity Incentive Plan, and any other equity plan adopted
by the Company (collectively "Option Plans"), at a level consistent with his
position and responsibilities.
5. EMPLOYEE BENEFITS. (a) Executive shall continue to be provided
employee benefits (including fringe benefits and other perquisites, profit
sharing plan participation and life, health, accident and disability insurance)
(collectively "Employee Benefits") on terms no less favorable in the aggregate
(except for any changes thereto required to comply with changes in applicable
law) than those benefits which were provided to Executive by the Company
immediately prior to the Commencement Date, except as otherwise required
hereunder.
(b) The Board of Directors shall determine the amount of the
payments, if any, to be awarded to the Executive under the Company's annual
bonus program and/or profit-sharing plan pursuant to their terms for the 1997
fiscal year and for which payments have not been made prior to the Commencement
Date.
(c) Executive shall be entitled to a minimum of five (5) weeks annual
vacation, in accordance with the Company's current vacation policies, which
vacation shall be
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increased on the second anniversary of the Commencement Date up to a maximum of
six (6) weeks.
6. BUSINESS EXPENSES. Reasonable travel, entertainment and other business
expenses incurred by Executive in the performance of his duties hereunder shall
be reimbursed by the Company in accordance with Company policies.
7. TERMINATION. This Agreement, and Executive's employment may be
terminated by either party at any time. In the event of any such termination,
Executive's rights and entitlements shall be determined in accordance with the
following provisions.
(a) FOR CAUSE BY THE COMPANY. The provisions of this Section 7(a)
shall apply in the event that Executive's employment hereunder is terminated by
the Company for "Cause". For purposes of this Agreement, "Cause" shall mean (i)
Executive's willful and continued failure substantially to perform his duties
hereunder (other than as a result of total or partial incapacity due to physical
or mental illness), (ii) the willful commission by Executive of acts that are
dishonest and demonstrably injurious to the Company, or (iii) an act or acts on
Executive's part constituting a felony under the laws of the United States or
any state thereof. If Executive is terminated for Cause, he shall be entitled to
receive his Base Salary through the date of termination, and any accrued but
unpaid amounts earned under any bonus program or profit-sharing plan. All other
benefits due Executive following Executive's termination of employment pursuant
to this Section 7(a) shall be determined in accordance with the plans, policies
and practices of the Company at the time of such termination. Any Notice of
Termination (as defined in subsection (i) of this Section 7), communicating the
termination of Executive's employment pursuant to this Section 7(a) shall
include a copy of a resolution duly
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adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to Executive and reasonable opportunity for
Executive, together with Executive's counsel, to be heard before the Board prior
to such vote), finding that in the good faith opinion of the Board that any
event constituting Cause for termination in accordance with this Section 7(a)
has occurred and specifying the particulars thereof in detail.
(b) DISABILITY. The provisions of this Section 7(b) shall apply in
the event that Executive's employment terminates on account of "Disability". For
purposes of this Agreement, "Disability" shall mean Executive's physical or
mental incapacity, which results in his inability to perform his duties for a
period of six (6) consecutive months. Any question as to the existence of the
Disability of Executive as to which Executive and the Company cannot agree,
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company.
In the event of the Disability of Executive, the Company may terminate the
employment of Executive, by delivery of a Notice of Termination to the Executive
which Notice shall be effective not less than thirty (30) days after the giving
of such Notice. Upon termination of Executive's employment hereunder as a result
of Disability, Executive shall receive his Base Salary for a period of twelve
(12) months following such termination, and any and all accrued but unpaid
amounts earned by Executive under the annual bonus program or profit-sharing
plan as of the date of Disability. Any payments provided for in this Section
7(b) shall be offset (but not below zero) by any payment of disability benefits
in lieu of Base Salary received by Executive under the Company's employee
benefit plans as then in effect. In addition, all options
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or other awards issued under the Option Plans shall become fully vested and
exercisable as of the date of Disability.
(c) DEATH. Upon termination of Executive's employment hereunder as a
result of Executive's death, Executive's estate shall receive his Base Salary at
the rate in effect at the time of Executive's death for a period of twelve (12)
months following his death, and any and all accrued but unpaid amounts earned by
Executive under the Company's annual bonus program or profit-sharing plan as of
the date of death. In addition, all options or awards under the Option Plans
shall become fully vested and exercisable as of the date of death. Thereafter,
the Company shall, except as provided in subsections 5(a) and 7(g), have no
further obligation to compensate Executive under this Agreement.
(d) WITHOUT CAUSE BY THE COMPANY. If Executive's employment is
terminated by the Company (including a termination of this Agreement by the
Company as provided in Section 1) without "Cause" (other than by reason of
Disability or death), Executive shall receive, as promptly as practicable
following such termination, but in any event not later than ten (10) business
days following such termination, a lump sum payment in cash equal to the sum of:
(i) if not theretofore paid, the Executive's Base Salary through the
date of termination at the rate in effect on the date of termination
or, if higher, at the highest rate in effect at any time within the
90-day period preceding the Commencement Date; and
(ii) the product of (x) the annual bonus paid to the Executive for the
last full fiscal year ending during the Employment Term and (y) the
fraction obtained by dividing (a) the number of days between the
Commencement Date and the last day of the last full fiscal year ending
during the Employment Term and (b) 365; and
(iii) in the case of compensation previously deferred by the
Executive, all amounts of such compensation previously deferred and
not yet paid by the Company.
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Executive shall in addition receive an amount equal to three (3) times the
Executive's annual Base Salary at the rate in effect at the time Notice of
Termination was given, or if higher, at the highest rate in effect at any time
within the ninety (90) day period preceding the Commencement Date. Such amount
shall be paid to Executive in two (2) equal payments, on the first and second
anniversaries, respectively, of the Executive's date of termination.
No option or other award granted to Executive under the Option Plans shall
terminate prior to the expiration of the option term or award period without
regard to a termination of employment.
(e) FOR GOOD REASON BY EXECUTIVE. The provisions of this Section 7(e)
shall apply in the event that the Executive terminates his employment with the
Company for "Good Reason". For purposes of this Agreement, "Good Reason" means
(without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties, responsibilities,
titles or offices, or any removal of Executive from or any failure to
re-elect Executive to any of such positions, except in connection with
the termination of Executive's employment for Cause, Disability, or as
a result of Executive's death or by Executive other than for Good
Reason;
(ii) A reduction by the Company in Executive's Base Salary as in
effect at the Commencement Date, as the same may be increased
according to the terms of this Agreement;
(iii) A relocation of the Company's principal executive offices
to a location outside of the metropolitan Boston, Massachusetts area
or the Company's requiring Executive to be based anywhere other than
the Company's principal executive offices, except for required travel
on the Company's business to an extent substantially consistent with
Executive's business travel obligations at the
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Commencement Date, or any material reduction or adverse change in the
emoluments or perquisites of office provided to the Executive at the
Commencement Date;
(iv) A failure by the Company to continue in effect fringe
benefits and benefit or compensation plans (including any profit
sharing, bonus, life insurance, health, accidental death or
dismemberment or disability plan) with terms which in the aggregate
are as favorable as those fringe benefits and plans to which Executive
is entitled or in which Executive is participating, as the case may
be, at the Commencement Date (or in the case of fringe benefits or
plans granted or adopted, as the case may be, after the date hereof
and providing a type of benefit not provided by the Company at the
Commencement Date, at the respective dates of grant or adoption of
such fringe benefits or plans); or
(v) The failure by the Company to obtain the specific assumption
of this Agreement by any successor or assign of the Company or any
person acquiring a substantial portion of the assets of the Company,
or, following any such assumption, assignment or acquisition by an
entity other than an affiliate of the Company, the occurrence of any
event Executive believes will impair his duties under this Agreement.
If Executive terminates his employment for "Good Reason", Executive shall be
entitled to the same payments he would have received if his employment had been
terminated by the Company without "Cause".
(f) GROSS-UP PAYMENTS. In the event that Executive receives any
payments under this Agreement, or other payments subject to Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), which are considered
"excess parachute payments" as defined in Section 280G of the Code, the Company
shall make an additional gross-up payment to Executive in an amount which
results in Executive being in the same after-tax position that he would have
been in had no excise tax under Code Section 4999 been imposed.
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(g) WITHOUT GOOD REASON BY EXECUTIVE. If Executive voluntarily
terminates his employment with the Company for any reason other than "Good
Reason", Executive shall be entitled to the same payments he would have received
if his employment had been terminated by the Company for Cause.
(h) CONTINUATION OF BENEFITS. Upon the termination of Executive's
employment other than as a result of death or for Cause, in addition to any
amounts due under Section 5(a) and (b) hereof and Sections (a) through (f) of
this Section 7, the Company shall provide Executive with a continuation of those
benefits denoted by an asterisk on Exhibit A hereto until the earlier of
Executive's death or 65th birthday; provided, however, that in the event that
Executive obtains other substantially comparable employment during such period,
Executive shall notify the Company and the amount of any benefits to which
Executive is entitled under this Section 7(h) shall be reduced (but not below
zero) by any such benefits provided by Executive's new employer.
(i) NOTICE OF TERMINATION. Any purported termination of employment by
the Company or by Executive shall not be effective until communicated by written
Notice of Termination to the other party hereto in accordance with Section 11(i)
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of employment under the provision so
indicated.
8. NONCOMPETITION. (a) During the Employment Term, and for a two (2) year
period following termination of Executive's employment hereunder, Executive
shall not, directly or
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indirectly, (i) become under contract to or associated with, employed by, render
services to or own an interest (other than as a shareholder owning not more than
a 5% interest) in any microticket leasing business that is in competition with
the Company in the United States, (ii) solicit any officer or employee of the
Company or any of its affiliates to engage in any conduct prohibited hereby for
Executive or to terminate any existing relationship with the Company or such
affiliate or (iii) assist any other person to engage in any activity in any
manner prohibited hereby to Executive. For purposes of this Section 8(a), in the
event of a termination of employment prior to expiration of the Employment Term,
determination of the duration of the Employment Term, shall be made without
regard to the automatic renewal provisions of Section 1 hereof.
(b) It is expressly understood and agreed that although Executive and
the Company consider the restrictions contained in this Section 8 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Executive, the provisions
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.
9. CONFIDENTIALITY. Executive will not at any time (whether, during or
after his employment with the Company) disclose or use for his own benefit or
purposes or the benefit or
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purposes of any other person, firm, partnership, joint venture, association,
corporation or other business organization, entity or enterprise other than the
Company and any of its subsidiaries or affiliates, any trade secrets,
information, data, or other confidential information relating to customers,
development programs, costs, marketing, trading, investment, sales activities,
promotion, credit and financial data, manufacturing processes, financing
methods, plans, or the business and affairs of the Company generally, or of any
subsidiary or affiliate of the Company, PROVIDED that the foregoing shall not
apply to information which is not unique to the Company or which is generally
known to the industry or the public other than as a result of Executive's breach
of this covenant. Executive agrees that upon termination of his employment with
the Company, for any reason, he will return to the Company immediately all
memoranda, books, papers, plans, information, letters and other data, and all
copies thereof or therefrom, in any way relating to the business of the Company
and its affiliates, except that he may retain personal notes, notebooks and
diaries. Executive further agrees that he will not retain or use for his account
at any time any trade names, trademark or other proprietary business designation
used or owned in connection with the business of the Company or its affiliates.
10. SPECIFIC PERFORMANCE. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of Sections 8 or 9 would be inadequate and, in recognition of this
fact, Executive agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company, without posting any bond, shall
be entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
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11. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts.
(b) ENTIRE AGREEMENT/AMENDMENTS. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and,
subject to the exception noted below, supersedes any and all prior
understandings, agreements, contracts and arrangements, whether written or oral,
between the Company and Executive, including but not limited to the Original
Employment Agreement and the Executive Performance Incentive Plan. The parties
hereto agree that as of the Commencement Date, the Original Employment Agreement
shall be null and void and of no further force or effect and any and all current
and future obligations of either party thereunder are fully and forever
discharged. Notwithstanding anything to the contrary contained herein, this
Agreement shall in no way reduce or diminish any benefit to which Executive is
otherwise entitled and which has already accrued, or been granted, to Executive,
pursuant to the terms of a plan, program or arrangement of the Company,
including without limitation, any outstanding award granted to Executive under
the Company's Executive Performance Incentive Plan for which the performance
period has not closed (or, if closed, payment has not been made) prior to the
Commencement Date. The Executive hereby agrees to provide any consent, waiver or
other documentation necessary to give effect to this paragraph (b). This
Agreement may not be altered, modified, or amended except by written instrument
signed by the parties hereto.
(c) NO WAIVER. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party's rights or
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deprive such party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(d) SEVERABILITY. In the event that any one or more of the provisions
of this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
(e) ASSIGNMENT. This Agreement shall not be assignable by Executive
and shall be assignable by the Company only to a direct or indirect wholly-owned
subsidiary of the Company.
(f) MITIGATION. The Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Executive as the result of employment by another employer after the termination
of his employment hereunder or otherwise, except to the extent set forth in
Section 7(h) of this Agreement.
(g) ARBITRATION. Except where equitable relief is sought, any
dispute, controversy or claim arising out of or relating to this Agreement, or
the breach hereof, shall be settled by arbitration in accordance with the rules
of the American Arbitration Association by a single arbitrator. The Arbitrator
shall be an individual familiar with the leasing and finance industry. The
arbitrator's award shall be final and binding upon both parties, and judgment
upon the award may be entered in any court of competent jurisdiction in any
state of the United States
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or country or application may be made to such court for a judicial acceptance o
the award and an enforcement as the law of such jurisdiction may require or
allow.
(h) SUCCESSORS; BINDING AGREEMENT.
(i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets or the Company to expressly
assume and agree 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. Such assumption and agreement shall be obtained prior to the
effectiveness of any such succession. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise. The term "Company" shall also mean any affiliate
of the Company to which Executive may be transferred and the Company shall cause
such successor employer to be considered the "Company" bound by the terms of
this Agreement and this Agreement shall be amended to so provide.
(ii) This Agreement shall inure to the benefit of and be binding
upon personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If Executive should die while any
amount would still be payable to
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Executive hereunder if Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the devisee, legatee or other designee of Executive or, if there is
no such designee, to the estate of Executive.
(i) NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the execution page of this Agreement, PROVIDED
that all notices to the Company shall be directed to the attention of the Board
with a copy to Managing Partner, Xxxxxxx & Xxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx,
XX 00000, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.
(j) LEGAL FEES AND EXPENSES. The Company shall reimburse Executive on
a quarterly basis for all costs and expenses incurred by Executive to enforce or
protect his rights under this Agreement (including fees and expenses incurred in
connection with an arbitration) unless it shall ultimately be determined by a
final judgment of an arbitrator or a court of competent jurisdiction that
Executive was without any justification for commencing or continuing any such
arbitration, action or proceeding, in which case Executive shall repay to the
Company any amounts of reimbursement paid under this Section 11(j) and in the
event of an arbitration, shall also pay one half (1/2) of the fees of the
arbitrator.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Xxxxx Leasing Technologies, Inc.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Chief Financial Officer
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