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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made as of the ____ day of
______________, 1997 (the "Effective Date"), by and between First Sierra
Financial, Inc., a Delaware corporation (the "Employer"), and Xxxxxx X. Xxxxxxx
(the "Employee"). Employer and Employee may be referred to herein collectively
as the "Parties" and individually as a "Party".
ARTICLE I
TERM
Employer hereby employs Employee and Employee hereby accepts
employment with Employer for a period beginning on the Effective Date and
ending on the third anniversary of the Effective Date (as extended pursuant to
the following provisions, the "Term"). As of the first day of any month
following the Effective Date, the Term shall be extended for an additional one
(1) month period unless either Employee or Employer gives the other party
written notice at least ninety (90) days prior to the first day of such month
that this Agreement shall terminate on the then scheduled expiration date of
the Term. If such notice is given, this Agreement shall automatically terminate
on such expiration date. If this Agreement is extended, the terms in effect
under this Agreement immediately preceding such extension shall apply during
the extension period. If Employee's employment hereunder is terminated by
either Employer or Employee at any time for any reason, the expiration date
shall thereupon no longer be automatically extended. This Agreement replaces
all prior agreements between the parties, oral or written regarding employment
of Employee by Employer and all such prior agreements are void upon the
Effective Date of this Agreement.
ARTICLE II
DUTIES OF EMPLOYEE
2.01 Duties. Employee is engaged to be the President and Chief
Executive Officer of Employer. Employee's duties and powers as President and
Chief Executive Officer shall be determined from time to time by the Board of
Directors of Employer (the "Board of Directors"). Employee shall perform and
discharge such duties in a businesslike manner, and faithfully as an officer of
Employer, and shall be subject to the supervision and direction of the Board of
Directors.
2.02 Full Time Employment. Subject to the provisions set forth below,
Employee shall devote his productive time, ability, and attention to the
business of Employer during the Term. Employee shall not, directly or
indirectly, during the Term render any services of a business, commercial or
professional nature to any other person, corporation, firm or organization,
whether for compensation or otherwise, without the prior written consent of
Employer. Notwithstanding
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the foregoing, Employee may continue to engage in personal and family
investing conducted in a passive way.
ARTICLE III
COMPENSATION AND BENEFITS
3.01 Base Compensation. As compensation for services rendered and
Employee's covenants and agreements under this Agreement, during the Term of
this Agreement Employee shall be entitled to receive from Employer a minimum
base salary of two hundred and fifty thousand and no/100ths dollars ($250,000)
per year, payable in equal semi-monthly installments. The salary of Employee
may be increased from time to time at the sole discretion of the Board of
Directors.
3.02 Bonus. In addition, Employee may be entitled to an annual
bonus paid by Employer if and as determined in the sole discretion of the Board
of Directors.
3.03 Benefit Plans. During the Term, and thereafter, to the extent
provided in the applicable plan, Employer agrees to include Employee in any
retirement, insurance or health benefit plans adopted by Employer for the
benefit of the senior employees of Employer. Employer may enter into and revise
these plans in its sole discretion. Employee will have four weeks paid vacation
each year.
3.04 Expenses. Employer, in accordance with the rules and regulations
that the Board of Directors shall issue and revise from time to time, shall
reimburse Employee for business expenses directly and reasonably incurred in
the performance of his duties.
3.05 Automobile Allowance and Club Dues. Employee shall be entitled to
receive from Employer an automobile allowance of one thousand and no/100ths
dollars ($1,000) per month. Employer shall reimburse Employee for monthly club
dues incurred by Employee for a country club located in Xxxxxx County, Texas or
a surrounding county.
ARTICLE IV
TERMINATION
This Agreement shall terminate prior to the expiration of its Term
upon the occurrence of any one of the following events:
4.01 Disability. In the event that Employee is unable fully to perform
his duties and responsibilities hereunder to the full extent required by the
Board of Directors of Employer by reason of illness, injury or incapacity for
ninety (90) consecutive days (during such ninety (90) day period Employee shall
continue to be compensated as provided in Section 3.01 hereof), this Agreement
may be terminated by Employer, and Employer and Employee shall have no further
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liability or obligations hereunder; provided, however, that Employer shall
continue to pay Employee the base compensation specified in Section 3.01 hereof
at the same times specified in Section 3.01 (as reduced by any payments
received by Employee under any Employer sponsored disability benefits plan in
which Employee was participating). In the event of the any dispute under this
Section 4.01, Employee shall submit to a physical examination by a licensed
physician selected by Employer.
4.02 Death. In the event that Employee dies during the Term, Employer
shall pay to Employee's executors, legal representatives or administrators the
base compensation specified in Section 3.01 hereof at the same time specified
in Section 3.01 for the remainder of the Term (as reduced by any payments
received by such executors, legal representatives and administrators under any
Employer sponsored death or disability benefits plan in which Employee was
participating).
4.03 Cause. Nothing in this Agreement shall be construed to prevent
the termination of this Agreement by Employer at any time for "cause". For
purposes of this Agreement, "cause" means (i) an act or acts of dishonesty
taken by the Employee and intended to result in substantial personal enrichment
of the Employee at the expense of the Employer or (ii) repeated violations by
the Employee of the Employee's obligations under Article II of this Agreement
which are demonstrably willful and deliberate on the Employee's part and which
result in material injury to the Employer. If the Employer wishes to terminate
the Employee's employment pursuant to clause (ii) above, the Employer shall
first give written notice of its intention to the Employee which notice shall
set forth in reasonable detail the repeated violations which are alleged by the
Employer, and the Employee shall have a 30-day period in which to cure such
violations prior to the expiration of which he may not be terminated pursuant
to such clause (ii). Upon termination for cause, Employer shall pay to Employee
all sums due to Employee through the date of such termination. Following such a
termination, Employer shall have no further duties or obligations to Employee.
4.04 Termination Without Cause by Employer. Employer, in its
discretion and for any reason, may terminate this Agreement at any time by
delivering written notice to Employee prior to such intended termination
("Termination Date"). This Agreement shall terminate on the Termination Date
and the Parties shall have no further duties or obligations to each other,
provided, however, that Employer shall pay Employee in one lump sum payment
within thirty (30) days of the Termination Date an amount equal to three times
Employee's current base annual compensation specified in Section 3.01 hereof
plus three times the amount of bonus received by Employee for the year prior to
Employee's termination of employment.
4.05 Termination by Employee Other Than For Good Reason. Employee may
terminate this Agreement at any time by delivering written notice to Employer
of Employee's intent to terminate at least 30 days prior to such intended
termination ("Departure Date"). This Agreement shall terminate on the Departure
Date and the parties shall have no further duties or obligations to each other,
provided, however, that Employee shall remain subject to all of the provisions
of
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Article V and Employer shall pay to Employee all sums due to Employee through
the Departure Date.
4.06 Termination by Employee For Good Reason. Employee may terminate
this Agreement at any time for Good Reason (as hereinafter defined) by
delivering written notice to Employer of Employee's intent to terminate for
Good Reason at least 30 days prior to such intended termination ("Good Reason
Departure Date"). This Agreement shall terminate on the Good Reason Departure
Date and the parties shall have no further duties or obligations to each other,
provided, however, that Employer shall pay Employee in one lump sum payment
within thirty (30) days of the Good Reason Termination Date an amount equal to
three times Employee's current base annual compensation specified in Section
3.01 hereof plus three times the greater of (i) the amount of bonus received by
Employee for the year prior to Employee's termination of employment or (ii) the
amount of bonus received by Employee for the year prior to a Change in Control
(as hereinafter defined).
"Good Reason" shall mean termination of employment by Employee within
one year of the occurrence of either: (i) a Change in Control (as hereinafter
defined); or (ii) any of the following events:
(a) The assignment to Employee without Employee's written
consent of any duties inconsistent with Employee's positions, duties,
responsibilities and status with the Employer immediately prior
thereto, or a change without Employee's written consent in Employee's
reporting responsibilities, titles or offices representing, in
Employee's reasonable opinion, a reduction in position, status or
responsibilities, or any removal of Employee from, or any failure to
re-elect Employee to, any such position, including as a member of the
Board of Directors.
(b) The taking of any action by the Employer which would
directly adversely affect the amount or payment (including the time of
payment) of Employee's compensation or benefits provided in this
Agreement or his participation in, or a material reduction of,
Employee's current, future, actual or projected benefits under, any
compensation or benefit plans, programs or arrangements or which would
deprive Employee of any material fringe benefit enjoyed by Employee,
in each case immediately prior to such action. Except as specifically
set forth herein, the decisions of the Board of Directors concerning
the general operations of the Employer shall not be the basis for a
Good Reason termination.
(c) The geographic relocation of Employee's work site
location to a new location in excess of thirty miles from the location
of the Employee's work site location without Employee's written
consent.
"Change in Control" shall mean any of the following: (i) the Employer
shall not be the surviving entity in any merger, consolidation or other
reorganization (or survives only as a subsidiary of an entity other than a
previously wholly-owned subsidiary of the Employer), (ii) the Employer sells,
leases or exchanges all or substantially all of its assets to any other person
or
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entity (other than a wholly-owned subsidiary of the Employer), (iii) the
Employer is to be dissolved and liquidated, (iv) any person or entity,
including a "group" as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, other than any person, entity or group which
owned shares of Common Stock of the Company immediately prior to the initial
public offering of the Company's Common Stock, acquires or gains ownership or
control (including, without limitation, power to vote) of more than 50% of the
outstanding shares of the Employer's voting stock (based upon voting power), or
(v) during any consecutive two-year period, individuals who constituted the
Board of Directors of the Employer (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
shareholders of the Employer was approved by a vote of at least three-quarters
of the directors still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
ARTICLE V
PROPERTY RIGHTS
5.01 Non-Competition. If this Agreement is terminated other than
pursuant to Sections 4.04 or 4.06 or this Agreement otherwise expires without
extension pursuant to Article 1, then for a one (1) year period following such
termination or expiration, as applicable (the "One Year Period"), Employee
shall not, directly or indirectly, either as an employee, employer, consultant,
agent, lender, principal, partner, stockholder, corporate officer, director, or
in any other individual or representative capacity, engage or participate in
any business that is in competition in any manner whatsoever with the business
engaged in by Employer at the time of such termination or resignation. The
provisions of this Section 5.01 and those contained in Section 5.02 shall not
apply to any termination occurring pursuant to Sections 4.04 or 4.06.
5.02 Solicitation. During the One Year Period, Employee agrees not to,
directly or indirectly, (i) call on or solicit, with respect to the activities
prohibited by Section 5.01 of this Agreement, any person, firm, corporation or
other entity who or which at the time of such termination, or within two years
prior thereto, was or had been a customer, referral source or distributor of
Employer or any of its affiliates or (ii) solicit, influence or recommend the
employment of any person who was employed by Employer on a full or part-time
basis at the time of Employee's termination of employment; provided, if
requested by any employee of Employer, Employee shall have the right to give a
reference with respect to such employee.
5.03 Reasonableness of Restrictions. Employee agrees that (i) the
covenants contained in Sections 5.01 and 5.02 hereof are necessary for the
protection of Employer's business goodwill, (ii) a portion of the compensation
paid to Employee under this Agreement is paid in consideration of the covenants
herein contained, the sufficiency of which consideration is hereby
acknowledged, (iii) Employee is not, and under this Agreement will not be,
engaged in a common calling, and (iv) if the scope of any restriction contained
in Sections 5.01 and 5.02 hereof is too broad to permit enforcement of such
restriction to its full extent, then such restriction shall be enforced to
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the maximum permitted by law, and the Parties hereto hereby consent that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction. The existence of any claim or cause of action of
Employee against Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of these
covenants.
5.04 Enforcement. Employee acknowledges that the restrictions
contained in Sections 5.01 and 5.02 hereof are reasonable and necessary to
protect the legitimate interests of Employer and its affiliates, that Employer
would not have entered into this Agreement in the absence of such restrictions,
and that any violation of any provision of the covenants contained in Sections
5.01 or 5.02 hereof will result in irreparable injury to Employer. Employee
also acknowledges that Employer shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual damages as well as
an equitable accounting of all earnings, profits and other benefits arising
from any such violation, which rights shall be cumulative and in addition to
any other rights or remedies to which Employer may be entitled.
5.05 Copy of Covenants. Until the expiration of the applicable
restrictions, Employee will provide, and Employer similarly may provide, a copy
of the covenants contained in Sections 5.01 and 5.02 of this Agreement to any
business or enterprise which Employee may (i) directly or indirectly own,
manage, operate, finance, join, control or participate in the ownership,
management, operation, financing, or control of, (ii) serve as an officer,
director, employee, partner, principal, agent, representatives, consultant
leader or otherwise, or (iii) with which he may use or permit his name to be
used.
ARTICLE VI
GENERAL PROVISIONS
6.01 Notices. Any notices to be given hereunder by either Party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested:
If to Employer:
First Sierra Financial, Inc.
Texas Commerce Tower
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Chairman
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If to Employee:
Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Mailed notices shall be addressed to the Parties at the addresses set forth
above, but each Party may change his/her address by written notice in
accordance with this Section 6.01. Notices delivered personally shall be deemed
communicated as of actual receipt; mailed notices shall be deemed communicated
as of ten (10) days after mailing.
6.02 Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to such employment in any manner
whatsoever.
6.03 Certain Acknowledgments. Employee by his execution and delivery
of this Agreement represents to Employer as follows:
(i) Employee has been advised by Employer to have this Agreement
reviewed by an attorney representing Employee, and Employee
has either had this Agreement reviewed by such attorney or
has chosen not to have this Agreement reviewed because
Employee, after reading the entire Agreement, fully and
completely understands each provision and has decided not to
obtain the services of an attorney.
(ii) Employee either on his own or with the assistance and advice
of his attorney has in particular reviewed Article V and
understands and accepts (a) the restrictions imposed by
Article V and Sections 5.01 and 5.02, and (b) the
restrictions imposed upon Employee pursuant to these sections
are reasonable and necessary for the protection of the
property rights of Employer and its affiliates.
6.04 Headings. The headings or titles to Sections or Articles in this
Agreement are intended solely for convenience of the Parties and no provision
of this Agreement is to be construed by reference to the heading or title of
any section.
6.05 No Set-Off. There shall be no right of set-off or counterclaim,
in respect of any claim, debt or obligation, against the payments or benefits
to be made or provided for in this Agreement.
6.06 Amendment or Modification; Waiver. No provision of this Agreement
may be amended, modified or waived unless such amendment, modification or
waiver is authorized by the Board of Directors of Employer and is agreed to in
writing, signed by Employee and by an officer of Employer (other than Employee)
thereunto duly authorized. Except as otherwise specifically
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provided in this Agreement, no waiver by any Party hereto of any breach by any
other party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time; nor shall the receipt or acceptance of Employee's employment be deemed a
waiver of any condition or provision hereof. Employee acknowledges that from
time to time, Employer may establish, maintain and distribute employee manuals
or handbooks or personnel policy manuals, and officers or other representatives
of Employer may make written or oral statements relating to personnel policies
and procedures. Such manuals, handbooks and statements are intended only for
general guidance. No policies, procedures or statements of any nature by or on
behalf of Employer (whether written or oral, and whether or not contained in
any employee manual or handbook or personnel policy manual), and no acts or
practices of any nature shall be construed to modify this Agreement or to
create express or implied obligations of any nature to Employee.
6.07 Assignability. Employee shall not assign, pledge or encumber any
interest in this Agreement or any part thereof without the express written
consent of Employer, this Agreement being personal to Employee. This Agreement
shall, however, inure to the benefit of Employee's estate, dependents,
beneficiaries and legal representatives. This Agreement shall not be assignable
by Employer without the written consent of Employee, but if Employer shall
merge or consolidate with or into, or transfer substantially all of its assets
to, another corporation or other form of business organization, then this
Agreement shall bind the successor of Employer resulting from such merger,
consolidation or transfer. No such merger, consolidation or transfer, however,
shall relieve Employer or Employee from liability and responsibility for the
performance of their respective duties and obligations hereunder.
6.08 Governing Law. THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED
AND DELIVERED IN THE STATE OF TEXAS, AND SHALL IN ALL RESPECTS BE
INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE
INTERNAL SUBSTANTIVE LAW OF THE STATE OF TEXAS.
6.09 Severability. Each provision of this Agreement constitutes a
separate and distinct undertaking, covenant and/or provision hereof. In the
event that any provision of this Agreement shall finally be determined to be
unlawful, such provision shall be deemed severed from this Agreement, but every
other provision of this Agreement shall remain in full force and effect, and in
substitution for any such provision held unlawful, there shall be substituted a
provision of similar import reflecting the original intent of the Parties
hereto to the maximum extent permissible under law.
6.10 No Duress. Employee acknowledges that no force, fear or threats
or duress of any kind have been used to obtain the agreements and covenants
contained in this Agreement.
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EXECUTED in Houston, Texas, on the day and year first above written.
"EMPLOYER"
First Sierra Financial, Inc.
By:
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Name:
--------------------------------
Title:
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"EMPLOYEE"
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Xxxxxx X. Xxxxxxx
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