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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 12, 1998 by and between Xxxxx
Leasing Technologies, Inc., a Massachusetts corporation, (the "Company") and
Xxxxxxx X. Xxxxxx, (the "Executive") residing at 00 Xxxxxxx Xxx, Xxxxxxxxx, XX
00000.
WHEREAS Executive has served as Executive Vice President,
Chief Operating Officer and Chief Financial 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
Executive Vice President, Chief Operating Officer and Chief Financial 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 $200,000 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 increased on the second anniversary of the
Commencement Date up to a maximum of six (6) weeks.
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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 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
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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 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
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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.
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
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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
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
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(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.
(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.
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(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 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
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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 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,
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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.
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
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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 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.
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(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 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
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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 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
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02110, 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/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Xxxxx Leasing Technologies, Inc.
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, President
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