EXHIBIT 99.6
Tyco Capital Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
December 20, 2001
Xx. Xxxxxx Xxxxxxx
Dear Xxxxxx,
The purpose of this letter (the "Employment Agreement") is to set
forth the terms and conditions of your employment with Tyco Capital Corporation,
a Nevada corporation ("TCC") or an affiliate of Tyco Capital Corporation
designated by TCC (together with TCC, the "Company").
You currently are the President and Chief Operating Officer of XxXxxxx
RentCorp ("XxXxxxx"). Pursuant to the Agreement and Plan of Merger between
XxXxxxx and an affiliate of TCC, dated as of December 20, 2001 (the "Merger
Agreement"), XxXxxxx will be merged with the affiliate of TCC (the "Merger"),
with such affiliate being the surviving company in the Merger. In your current
position you perform unique and irreplaceable services for XxXxxxx. The Company
has determined and you acknowledge that it is imperative that the Company be
able to rely on your services following the effective date of the Merger, and
that your continued performance of services to the Company is a crucial
component of the Merger.
Pursuant to and subject to the foregoing, the terms of your employment
with the Company will be as follows:
1. EFFECTIVE DATE. The "Effective Date" of this Employment Agreement
will be the Effective Time under the Merger Agreement. If the Merger Agreement
is terminated without the Merger being consummated, this Employment Agreement
shall be null and void and of no force or effect.
2. TITLE AND POSITION. Your position will be President of Tyco
Capital Rental Company, reporting to the Group CEO of Tyco Capital Equipment
Rental and Financing.
3. EMPLOYMENT TERM. The term of this Employment Agreement (the
"Employment Term") is for 3 years from the Effective Date.
4. COMPENSATION. In your new position with the Company, your annual
base salary will be $335,000, payable in accordance with the customary payroll
practices of the Company. Your base salary may be increased (but not reduced) by
the Company from time to time, based upon your performance and responsibilities,
pursuant to the Company's standard procedures for salary adjustments. With
respect to the 2002 fiscal year (i.e., the period ending September 30, 2002),
provided that you remain employed by the Company on September 30, 2002, you
shall be entitled to a minimum bonus of $251,250.
5. EMPLOYEE BENEFITS. As of the Effective Date, you will participate
in all executive bonus and incentive compensation plans for which your level of
employment makes you eligible, in accordance with and subject to the Company's
policies and the terms of such plans. In addition, you will be an eligible
participant in TCC's Executive Automobile Program and, subject to the terms of
such plan, the deferred compensation plan of Tyco International Ltd. ("TIL").
6. STOCK OPTION. On the Effective Time, TCC shall cause TIL to grant
to you an option (the "Option") to purchase 50,000 TIL common shares ("Common
Shares"), pursuant to the terms of TIL's Long Term Incentive Plan II (the "Stock
Plan"). The Option will have an exercise price per share equal to the fair
market value of a TIL common share on the date of grant, determined in
accordance with the standard practices under the Stock Plan, and shall vest and
become exercisable on the third anniversary of the date of grant. The other
terms of the Option will be set forth in an option agreement (the "Option
Agreement") between TIL and you. In the event your employment with the Company
terminates for any reason other than for Cause (as defined below), the Option
shall continue to vest on the date specified above, subject to compliance with
the covenants set forth in Sections 9, 10 and 11 below. In the event that you
violate such covenants, the Option, whether or not vested, shall expire and be
of no further force or effect. In the event that you violate such covenants
after you have exercised the Option, or any portion of the Option, any gain
recognized upon such exercise shall, upon request of the Company, be paid to the
Company.
7. RESTRICTED STOCK.
(a) As a replacement of, and in consideration of the waiver of,
your rights under your Stock Bonus Agreements, dated November
2001 and February 2001, as amended, pursuant to the XxXxxxx 2000
Long-Term Stock Bonus Plan, the Company shall cause TIL to issue
to you, as of the Effective Time, a number of Common Shares (the
"Bonus Restricted Shares") equal to two (2) times the number of
Termination Bonus Shares, but in no event shall such number
exceed the Total Bonus Shares. A number of Bonus Restricted
Shares equal to the Termination Bonus Shares shall vest on the
first anniversary of the Effective Date and the remainder of such
shares shall vest on the second anniversary of the Effective
Date. For purposes of this Employment Agreement, "Termination
Bonus Shares" shall mean the number of shares of XxXxxxx common
shares to which you would be entitled under Section 8.3.2 of your
Stock Bonus Agreements were you to terminate employment as of the
Effective Time, multiplied by the Exchange Ratio (as defined in
the Merger Agreement) and "Total Bonus Shares" shall mean the
total number of XxXxxxx common shares which could be granted to
you under your Stock Bonus Agreements, multiplied by the Exchange
Ratio (as defined in the Merger Agreement).
(b) As of the Effective Date you will be granted 10,000
restricted Common Shares (the "New Restricted Shares") pursuant
to the terms of TIL's 1994 Restricted Stock Ownership Plan. The
restrictions on the New Restricted Shares shall lapse and the
shares shall vest in one-third increments
following the completion of fiscal years 2002, 2003 and 2004,
respectively, assuming pre-established performance metrics are
achieved.
(c) If your employment should terminate prior to the date the
shares granted under this Section 7 vest, you will forfeit all
unvested Bonus Restricted Shares and all unvested New Restricted
Shares unless they become vested pursuant to Section 8 hereof.
8. TERMINATION OF EMPLOYMENT. If during the Employment Term your
employment with the Company (i) is terminated by the Company for any reason
other than "Cause" (as defined below), (ii) is terminated by reason of your
death or disability, or (iii) is terminated by you in an Approved Termination
(as defined below), then, subject to your continued compliance with the
covenants set forth in Sections 9, 10 and 11 hereof, (1) the Company will pay
you a separation payment payable monthly in 24 equal installments equal to two
times your then current base salary plus two times the average of the annual
bonuses, if any, that you received from the Company or XxXxxxx, as applicable,
in the prior two years; (2) the Company will pay you an amount equal to a
pro-rata annual bonus for that portion of the bonus year up to the termination
date based on your then target bonus and (3) all of your Bonus Restricted Shares
and all of your New Restricted Shares shall become fully vested as of the date
of your termination of employment. For purposes of this Employment Agreement,
"Cause" shall mean (a) your willful and continued failure to perform
substantially your duties on behalf of the Company and its affiliates (other
than any such failure resulting from incapacity due to physical or mental
illness), if not cured within a 30-day period following written notice from the
Company of such failure; (b) the willful engagement by you in illegal conduct or
gross misconduct; (c) commission or conviction of a felony or guilty or nolo
contendere plea by you with respect thereto; or (d) a material breach of the
confidentiality or competitive activity provisions of this Employment Agreement.
For purposes of this Employment Agreement, an "Approved Termination" shall mean
a termination by you for any reason, provided that (w) the Company could not
have terminated your employment for Cause as of the date you give notice of your
intent to terminate employment and (x) the effective date of such termination of
employment is on a date determined by the Company, but which date may not be
later than three months after the date you notify the Company of your intent to
terminate employment, (y) you continue in good faith to perform your duties and
obligations until the effective date of such termination of employment, and (z)
between the date that you give notice of your intent to terminate your
employment and the effective date of the termination of employment, you do not
commit and are not convicted of a felony, and do not plead guilty or nolo
contendere with respect thereto. If you satisfy the requirements of an Approved
Termination, you will be entitled to the benefits set forth in this Section 8,
without regard to whether the Company subsequently could have terminated you for
Cause.
9. CONFIDENTIAL INFORMATION. You acknowledge that you have acquired
and will continue to acquire confidential information regarding TCC and its
affiliates, customers, strategic partners, and employees. Accordingly, you agree
that without the prior written consent of the Chief Executive Officer of TCC,
you will not, at any time, disclose to any unauthorized person or otherwise use
any such confidential information. For this purpose, confidential information
means non-public information concerning TCC's and its affiliates' financial
performance, plans and projections, business strategies, products and services,
(and proprietary
product data), customers employees, strategic partners, marketing plans, and
other proprietary information concerning TCC and its affiliates, except for
specific items which have become publicly available other than as a result of
your breach of this Employment Agreement.
10. COMPETITIVE ACTIVITY. You acknowledge and agree that the pursuit
of the activities forbidden by this subsection would necessarily involve the use
or disclosure of confidential information in breach of the preceding section,
but that proof of such a breach would be extremely difficult. To forestall this
disclosure, use, and breach, and in consideration of the employment under this
Employment Agreement, you agree that during the period that you are employed by
the Company and for two years after the termination of your employment with the
Company, whether by the Company or by you, for any reason, you will not, without
the written consent of the CEO of the Company, directly or indirectly, serve as
an employee, consultant, owner, officer or director of any organization or
business entity which (i) is in competition with an aspect of the Company's
business for which, during the one year prior to termination, you performed
direct or supervisory services or were otherwise involved ("Protected
Activities") and (ii) operates in a geographic location in which the Company
performs such Protected Activities (such organization or business entity, a
"Competitor"), unless you can prove that any action taken in contravention of
this subsection was done without the use in any way of confidential information.
Notwithstanding the foregoing, it shall not be a breach of this paragraph if,
after the termination of your employment, (X) you are employed by a Competitor
so long as you do not work or make policy for, oversee in fact, consult with, or
provide information to, any subsidiary, division or other organizational unit of
such Competitor which is in competition with the Company or (Y) you acquire or
hold not more than one percent of any class of publicly traded securities of a
Competitor, provided that such securities entitle you to not more than one
percent of the total outstanding votes entitled to be cast by securityholders of
such business in matters on which such securityholders are entitled to vote.
11. INTERFERENCE WITH BUSINESS. In order to avoid disruption of the
Company's business, you and the Company agree that during the period that you
are employed by the Company and for two years after the termination of your
employment with the Company, whether by the Company or by you, for any reason,
you will not (A) disparage or publicly criticize TIL, the Company or any of
their affiliates, or (B) hire any person who was employed by the Company or any
of its affiliates (other than persons employed in a clerical or other
administrative position) within the six-month period preceding the date of such
hiring, or solicit, entice, persuade or induce any person or entity doing
business with the Company and/or its affiliates, to terminate such relationship
or to refrain from extending or renewing the same. During this same period, the
Company will not, and will cause TIL and its other affiliates and any of their
respective affiliates, officers or directors not to, disparage or publicly
criticize you.
You hereby acknowledge that the provisions of Sections 9, 10 and 11
hereof are reasonable and necessary for the protection of the Company and its
affiliates. In addition, you further acknowledge that the Company and its
affiliates will be irrevocably damaged if such covenants are not specifically
enforced. Accordingly, you agree that, in addition to any other relief to which
the Company may be entitled, the Company will be entitled to seek and obtain
injunctive relief (without the requirement of any bond) from a court of
competent jurisdiction for the purposes of restraining you from an actual or
threatened breach of such covenants. In addition, and without limiting the
Company's other remedies, in the event of any breach by you
of such covenants, the Company will have no obligation to pay the separation or
any other payments otherwise payable hereunder. You and the Company agree that
the scope, duration or extent of the terms of the preceding two paragraphs are
fair and reasonable in the circumstances. Nevertheless, if a court of competent
jurisdiction shall nonetheless, by a final, nonappealable judgment, determine
that the scope, duration or extent of any of these terms exceeds that which is
permitted by law, then such scope, duration or extent shall be reduced to that
which is permitted by law in the circumstances, as determined by such court of
competent jurisdiction.
If any provision of this Employment Agreement is invalid or
unenforceable, the balance of this letter will remain in effect. This Employment
Agreement will be governed by and construed in accordance with the laws of the
State of New York. Any action brought by any party to this Employment Agreement
shall be brought and maintained in a court of competent jurisdiction in the
State of New York. Each of the parties hereto submits to the exclusive
jurisdiction of the courts of the State of New York and the federal courts of
the United States located in the City of New York, Borough of Manhattan, with
respect to any claim or cause of action arising out of this Employment Agreement
or the transactions contemplated hereby. The Company shall reimburse you for
reasonable travel and lodging expenses that you incur in connection with any
such claim or cause of action brought in New York.
Very truly yours,
TYCO CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President and Chief Executive Officer
If you agree with the terms of this Employment Agreement, please so
indicate by signing and returning the enclosed copy of this letter, whereupon
this letter shall constitute a binding agreement between the Company and you.
Accepted and Agreed:
XXXXXX XXXXXXX
/s/ Xxxxxx Xxxxxxx
--------------------------
