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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
(Xxxxxxx X. Xxxxxx)
THIS EMPLOYMENT AGREEMENT is hereby made as of September 1, 1996, by
and between XXXXXXX X. XXXXXX, hereinafter referred to as the "Employee," and
MLC HOLDINGS, INC., a Delaware corporation, whose principal place of business
is located at 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000,
hereinafter referred to as the "Employer."
RECITALS:
A. The Employer is engaged in the business of specialized asset
financing with a focus on the leasing of information technology equipment and
services.
B. The Employee has substantial experience in the business of the
Employer.
C. The Employer desires to secure the services of the Employee,
and the Employee is willing to be employed as Vice President of Marketing of
the Employer and its subsidiaries, including without limitation MLC Group, Inc.
and MLC GATX, Inc. (hereinafter, collectively, the "Company"), on the terms,
covenants and conditions hereinafter set forth.
THEREFORE, in consideration of the mutual promises and agreements
hereinafter set out, the Employer and the Employee agree as follows:
1. Employment. The Employer hereby employs, engages, and hires
the Employee, and the Employee hereby accepts employment with the Employer as
Vice President of Marketing to render such services for the Employer as
determined by the Board of Directors of the Employer. The Employee accepts and
agrees to such hiring, engagement and employment, subject to the general
supervision and pursuant to the orders, advice and direction of the directors
of the Employer.
2. Extent of Efforts; Other Employment. The Employee agrees that
the Employee shall devote his entire productive time and attention to the
business affairs of the Employer and, to the best of the Employee's ability,
experience and talents, shall perform all of the duties that may be required of
and from the Employee pursuant to the express and implicit terms hereof to the
reasonable satisfaction of the Employer. The Employee shall not engage in any
other employment duties or pursuits whatsoever, or directly or indirectly render
any services of a business, commercial, or professional nature to any person or
organization, whether for compensation or otherwise, without the prior written
consent of the Employer's Board of Directors. This paragraph 2 shall not
prohibit the making of passive, personal investments, nor the conduct to a
reasonable extent of private business affairs if those activities do not
interfere with the services required under this Agreement. [The Employer agrees
to waive the corporate opportunity doctrine for any endeavor that might be
brought to Employee except those which relate to the business of Employer.]
3. Term and Termination of Employment.
A. Term - Subject to the provisions of Section 3(B), the
"Term" of the Employee's employment shall be three (3) years, commencing on the
date of closing of the initial
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public offering by the Employer (the "Effective Date"), and shall renew
automatically for successive one (1) year periods unless a party hereto
provides written notice to terminate to the other party prior to thirty (30)
days before the end of the original period or any successive period.
B. Termination - This Agreement shall automatically
terminate upon the occurrence of any of the following events:
(i) The death of the Employee;
(ii) The "Permanent Disability" (hereinafter
defined) of the Employee; or
(iii) Written notice from the Board of Directors
to the Employee of his termination for "Cause" (hereinafter defined).
As used herein, "Permanent Disability" means any mental or physical
illness or disability continuing for a period of more than six (6) consecutive
months which renders the Employee unable to perform his duties and services
hereunder in a satisfactory manner. In the event of any disputes over the
existence or commencement of such disability, the issue shall be determined by
a qualified physician mutually agreed to by the Employer and the Employee , or,
if applicable, the Employee's legal representative. The determination of such
physician shall be conclusive and binding on the parties hereto.
As used herein, "Cause" means: gross neglect of duty, prolonged
absence from duty without the consent of the Employer, the acceptance by the
Employee of a position with another employer without consent, intentionally
engaging in any activity which is in conflict with or adverse to the business
or other interests of the Company, willful misconduct on the part of the
Employee, misfeasance or malfeasance of duty causing a violation of any law
which is reasonably determined to be detrimental to the Company, breach of a
fiduciary duty owed to the Company or any material breach of this Agreement by
the Employee which has not been corrected by the Employee within (30) days
after his receipt of notice of such breach from the Employer.
4. Compensation of the Employee. As the Employee's entire
compensation (exclusive of director's fees, if any) for all services rendered
to the Employer during the term of this Agreement, the Employee shall have and
receive, subject to withholding and other applicable employment taxes:
A. Commencing on the first day of the first month immediately
following the Effective Date (the "Salary Commencement Date"), a "basic salary"
at the rate of One Hundred Twenty Thousand and 00/100 Dollars ($120,000) per
annum, payable in cash or good check, not less frequently than monthly and not
later than the last day of the month in question; provided, however, that the
rate of such salary shall be reviewed by the Board of Directors of the Employer
not less often than annually and may be increased (but not decreased) at each
yearly renewal date. Prior to the
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Salary Commencement Date, the Employee shall continue to receive his basic
salary as in effect on the date of this Agreement.
B. Bonus compensation over and above the basic salary in such
amount and pursuant to such criteria as shall be determined by Xxxxxx X. Xxxxxx
and Xxxxx X. Xxxxx in their sole and absolute discretion, but not to exceed
Eighty Thousand and 00/100 Dollars ($80,000) for any fiscal year.
C. The right to receive or participate in any additional
"fringe" benefits, including but not limited to insurance programs and pension
or profit-sharing plans, which may from time to time be made available to
executives of the Employer.
5. Facilities and Expenses.
A. The Employer shall provide the Employee with a private
office, office equipment, supplies and other facilities and services consistent
with the current practices of the Employer, and suitable to the Employee's
position and adequate for the performance of his duties.
B. The Employee may be authorized from time to time to incur
reasonable expenses for promoting the business of the corporation, including
expenses for entertainment, travel, and similar items. The Employer will
reimburse the Employee for all such authorized expenses upon the presentation
by the Employee of an itemized account of such expenditures. The Employee
shall provide the Employee's own personal transportation, except for such times
as the Employee is using the Employer-owned vehicles for official business.
6. Reimbursement of Disallowed Expenses. If any salary payment,
medical reimbursement, employee fringe benefit, expense allowance payment, or
other expense incurred by the Employer for the benefit of the Employee is
disallowed, in whole or in part, as a deductible expense of the Employer for
federal income tax purposes, the Employee shall reimburse the Employer upon
notice and demand, to the full extent of the disallowance. This legally
enforceable obligation is in accordance with the provisions of Revenue Ruling
69-115 and is for the purpose of entitling the Employee to a business expense
deduction for the taxable year in which the repayment is made to the Employer.
7. Vacation and Sick Leave.
A. The Employee shall accrue four (4) weeks vacation each
calendar year and may take such vacation at times to be determined in the
manner most convenient to the business of the Employer. In addition, the
Employee may take time off at such times as may be determined by the Board of
Directors to attend such meetings and postgraduate courses as may directly
benefit the Employer and the Employee. Unused days of vacation may not be
carried over to future years. In
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addition, the Employee may take as holidays five (5) days of the Employee's
choosing, so long as it is convenient to and approved by the Employer.
B. The Employee shall accrue ___________ (__) days sick leave
in each calendar month, not to exceed a total of thirty (30) days. Unused days
of sick leave may not be carried over to future years. Any date used for the
purpose of determining the date of permanent or partial disability under this
Agreement shall be postponed until such time as all of the Employee's sick
leave shall be exhausted.
8. Illness or Incapacity. If the Employee becomes unable to
devote the Employee's full time to the business of the Employer because of
illness or incapacity during the term of this Agreement, then during such
period of illness or incapacity, the Employee's compensation shall be as
follows:
A. For the first six (6) months thereof--One Hundred percent
(100%) of the compensation provided for by paragraph 4 of this Agreement.
B. If the Employee shall not have resumed the Employee's
duties within the six (6) month period specified above, then the Employee's
compensation hereunder shall be terminated as of the end of the six (6) month
period, and the Employer shall have no further financial obligation to the
Employee.
9. Death During Employment. If the Employee dies during the term
of the Employee's employment, the Employer shall pay to the estate of the
Employee the basic salary which would otherwise be payable to the Employee up
to the end of the month in which the Employee's death occurs, not including any
bonuses. The Employer shall have no further financial obligations to the
Employee or to the Employee's estate under the terms of this Agreement.
10. Non-Competition Agreement.
During the duration of this Agreement and any extensions or
renewals hereof and for a period of one (1) year after the later of (i) the
date this Agreement is terminated by the Employer for cause or by voluntary
termination by the Employee, or (ii) the expiration of this Agreement at the
end of the initial or any renewal term or extensions thereof, the Employee
agrees as follows:
A. The Employee agrees that the Employee shall not:
(i) in any capacity whatsoever, whether as a
proprietor, partner, investor, corporate stockholder, director, officer,
employee, consultant, independent contractor, co-venturer, employer, agent,
representative, or otherwise, own, engage directly or indirectly in, or be
interested in a business or business activities competing with the Employer in
the United States;
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(ii) in any capacity whatsoever, whether as a
lender, guarantor, accommodation party, financier, investor, or otherwise,
assist or attempt to assist with respect to the providing of capital needs,
borrowing needs, or credit needs of any person, persons or entities of every
nature and description, other than the Employer, who or which shall be engaged
in, or intend to be engaged in, a business or business activities competing
with the Employer in the United States.
B. The Employee hereby agrees that the Employee will not
at any time disclose to any person, individual or entity, who or which is, or
reasonably may be expected to be, in competition with the Employer in the
United States, any confidential information or trade secrets of the Employer,
the contents of any client lists of the Employer, or the general needs of any
client or other contracting parties with the Employer; provided, however, the
foregoing shall not prevent such Employee from responding to the request of a
governmental agency or pursuant to a court order or as otherwise required by
law.
C. The Employee hereby agrees that the Employee shall
not at any time after execution of this Agreement, interfere with, solicit, or
disrupt the relationship, contractual or otherwise, between the Employer and
its clients, suppliers, agents, consultants, officers or employees.
D. The Employee acknowledges (i) that the foregoing
provisions are reasonable as to time and areas as to which their activities are
to be restricted, (ii) that the Employee understands the same and intends to be
fully bound with respect thereto, and (iii) that such limitations upon the
Employee's activities for the time and in the designated market area shall not
prevent the Employee from earning a reasonable livelihood during the two year
period following the termination or expiration of this Agreement.
E. Recognizing that a breach of any covenant contained
in Section 10 hereof would cause the Employer irreparable injury and that
damages at law would be difficult to ascertain, the Employee hereby consents to
the granting of equitable relief (without the posting of any bond by the
Employer) by way of a restraining order or temporary or permanent injunction by
any court of competent jurisdiction to prohibit the breach or enforce the
performance of any covenant contained in Section 10 hereof. Employee shall
only be liable for actual monetary damages to the Company, and not any
consequential or punitive damages for any breach of any covenant of Section 10
hereof.
11. Severability. All agreements and covenants contained herein
are severable, and in the event any of them shall be held to be invalid by any
competent court, this contract shall be interpreted as if such invalid
agreements or covenants were not contained herein.
12. Notices. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and sent by certified or
registered mail, return receipt requested, to the parties at the following
addresses:
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TO THE EMPLOYER:
MLC Group, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
TO THE EMPLOYEE:
Xxxxxxx X. Xxxxxx
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13. Assignment. This Agreement is personal to each of the parties
hereto and neither may assign or delegate any of the party's rights or
obligations hereunder without first obtaining the written consent of the other
party.
14. Miscellaneous.
A. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties hereto.
B. This Agreement shall be governed in all respects by the
laws of or applicable to the State of Delaware. The paragraph headings in this
Agreement are included solely for convenience and shall not affect or be used
in connection with the interpretation of this Agreement.
C. This contract contains the complete agreement concerning
the employment arrangement between the parties and shall, as of the
commencement of the term of employment hereunder, supersede all other
agreements between the parties. The parties stipulate that neither of them has
made any representation with respect to the subject matter of this Agreement or
any representations, including the execution and delivery hereof, except such
representations as are specifically set forth herein, and each of the parties
acknowledges that the party has relied on the party's own judgment in entering
into this Agreement.
D. The waiver by the Employer of a breach of any condition of
this Agreement by the Employee shall not be construed as a waiver of any
subsequent breach by the Employee.
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IN WITNESS WHEREOF, the parties have executed this Agreement as the
date first above written.
EMPLOYER:
MLC HOLDINGS, INC., a Delaware
corporation
By:
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Xxxxxxx X. Xxxxxx, President
EMPLOYEE:
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XXXXXXX X. XXXXXX
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EXHIBIT A
Bonus Compensation Formula
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