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EXHIBIT 10.12
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. Xxxxx,
Xx. (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. 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 Executive Vice President
and Chief Credit Officer. Employee's duties and powers as Executive Vice
President and Chief Credit Officer shall be determined from time to time by the
Chief Executive Officer of Employer, including periodic meetings in Texas.
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 Chief Executive Officer of Employer and the Employer's
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 the
Chief Executive Officer of Employer.
Notwithstanding the foregoing, Employee may continue to engage in
personal and family investing; provided, however, unless prior approval is
given by Employer's Chief Executive Officer, such investments may not include
equipment leases or interests in non-publicly traded entities engaged in
equipment leasing.
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ARTICLE III
COMPENSATION AND BENEFITS
3.01 Base Compensation. As compensation for services rendered and
Employee's covenants and agreements under this Agreement, Employee shall be
entitled to receive from Employer a base salary of one hundred sixty thousand
and no/100ths dollars ($160,000) per year, payable in equal semi-monthly
installments from Employer's headquarters in Texas. The salary of Employee may
be increased from time to time at the sole discretion of Employer.
3.02 Bonus. 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 or under applicable law, Employer agrees to
include Employee in any retirement, insurance and 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
three weeks paid vacation each year.
3.04 Expenses. Employer, in accordance with the rules and regulations
Employer shall issue and may revise from time to time, shall reimburse Employee
for business expenses directly and reasonably incurred in the performance of
his duties. The Employer acknowledges that the Employee will require a travel
and entertainment budget and reimbursement for reasonable travel and
entertainment expenses. Any amounts advanced or reimbursed by Employer to
Employee for travel and entertainment expenses shall be in addition to any
other amounts payable to Employee hereunder.
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 with reasonable accommodation hereunder to the
full extent required by Employer due to 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
liability or obligations hereunder; provided, however, that Employer shall
continue to pay Employee the base compensation specified in Section 3.01 hereof
for the duration of the Term 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
any dispute under this Section
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4.01, Employee shall submit to a physical examination by a licensed physician
selected by Employer, and acceptable to Employee. If the physician retained by
Employer is not acceptable to Employee, then physicians selected by the
Employer and the Employee shall jointly select a third physician to perform the
examination. All costs related to the physical examination of the Employee
shall be paid by the 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 for the remainder of the
Term at the same time specified in Section 3.01 (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" shall mean the habitual neglect or willful
breach by Employee of his duties as the Executive Vice President and Chief
Credit Officer of Employer which results in a material loss or damage to
Employer or embezzlement by Employee of Employer funds. 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 (i) Employer shall for the remaining portion of the
Term following the Termination Date continue to pay Employee the base
compensation specified and as scheduled in Section 3.01, (ii) Employer shall
pay Employee for each pay period for the remaining portion of the Term an
amount equal to one/twenty-fourth of the bonus received by Employee for the
year prior to the Termination Date, and (iii) Employer shall pay Employee at
the end of the Term a lump sum amount equal to the bonus received by Employee
for the year prior to the Termination Date multiplied by a fraction the
numerator of which is the number of days in the year prior to the Termination
Date and the denominator is 365.
4.05 Termination by Employee. 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 Article V and
Employer shall pay to Employee all sums due to Employee through the Departure
Date.
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ARTICLE V
PROPERTY RIGHTS
5.01 Non-Competition. If this Agreement is terminated or this
Agreement otherwise expires without extension, Employee shall not for a period
of one year (the "One Year Period"), 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 in the continental
United States at the time of such termination or resignation.
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 Confidentiality. In return for Employee's promises under this
Article V, Employee shall receive and be entrusted with certain confidential
and/or secret information of a proprietary nature, including without limitation
names and addresses of customers of the Employer and its affiliates and
business plans of the Employer. Employee shall not directly or indirectly
disclose or use, during the term of this Agreement or at any time thereafter,
any such information which is not otherwise publicly available.
5.04 Reasonableness of Restrictions. Employee agrees that (i) the
covenants contained in Sections 5.01, 5.02 and 5.03 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, 5.02 and 5.03 hereof is too broad to permit
enforcement of such restriction to its full extent, then such restriction shall
be enforced to 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.
5.05 Enforcement. If Employee is terminated pursuant to Sections
4.03, 4.04 or 4.05 and the One Year Period exceeds the Term, Employer will pay
Employee his base
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compensation for the portion of the One Year Period that exceeds the Term, plus
for each pay period for the portion of the One Year Period that exceeds the
Term Employer will pay Employee one/twenty-fourth of the amount of the bonus
received by Employee for the year proceeding Employee's termination of
employment. If this Agreement is not renewed at the end of its Term Employer
agrees to pay Employee his salary during the One Year Period plus for each pay
period during the One Year Period Employer will pay Employee one/twenty-fourth
of the amount of the bonus received by Employee for the year preceding
Employee's termination of employment. Employer reserves the right to waive the
provisions of Sections 5.01 and 5.02 if Employee terminates for any reason
other than under Section 4.04 and such waiver will release Employer from any
payment obligations under this Section 5.05. Employee acknowledges that the
restrictions contained in Sections 5.01, 5.02 and 5.03 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, 5.02 or 5.03 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.
5.06 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, 5.02 and 5.03 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, representative, consultant
leader or otherwise, or (iii) with which he may use or permit his name to be
used.
ARTICLE VI
GENERAL PROVISIONS
6.01 Arbitration. Employee and Employer agree that all disputes
concerning the terms of this Agreement or Employee's employment with Employer
will be subject solely to binding arbitration. The arbitrator selection and
conduct of the arbitration will be pursuant to the Commercial Arbitration Rules
of the American Arbitration Association. The place of the arbitration shall be
Houston, Texas and shall be governed by the laws of Texas.
6.02 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:
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If to Employer:
First Sierra Financial, Inc.
Texas Commerce Tower
600 Travis, Site 7050
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
If to Employee:
Xxxxxx X. Xxxxx, Xx.
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 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 6.02. Notices delivered personally shall be deemed
communicated as of actual receipt; mailed notices shall be deemed communicated
as of ten (10) days after mailing.
6.03 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.
6.04 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, 5.02 and 5.03 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.
6.05 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.
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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 Employer and is agreed to in writing, signed by
Employee and by the Chief Executive Officer of Employer thereunto duly
authorized. Except as otherwise specifically 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 Employer.
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.
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 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.
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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.
EXECUTED in Houston, Texas, on the day and year first above written.
"EMPLOYER"
First Sierra Financial, Inc.
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
"EMPLOYEE"
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Xxxxxx X. Xxxxx, Xx.