EMPLOYMENT AGREEMENT
Agreement dated as of the 1st day of April, 1995, between Pioneer
Commercial Funding Corp., a New York Corporation (the "Company") and Xxxxxx
Xxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive has heretofore served as the Senior Vice
President and Chief Financial Officer of the Company; and
WHEREAS, the Company desires to formalize the terms and
conditions of the Executive's continued employment by the Company in the manner
hereinbelow provided,
NOW, THEREFORE, in consideration of the foregoing, and the mutual
terms, covenants and conditions hereinbelow set forth, it is agreed, as follows:
ARTICLE 1
Employment
Section 1.1 Employment of the Executive. Commencing on the date
first above-written (the "Commencement Date") and continuing through March 31,
1997, the Executive shall be engaged by the Company as Senior Vice President and
Chief Financial Officer, reporting to the Chief Executive of the Company. During
said period of employment, (a) the Executive shall devote substantially all of
her time and efforts to the Company's business, provided, however, that the
Executive may serve on a reasonable number of boards of directors, trade
associations and public service organizations, committees and commissions; and
(b) the Executive shall stand for election as a Director of the Company at the
annual meetings of shareholders held throughout the term of her service under
this Agreement.
ARTICLE 2
Compensation; Benefits
Section 2.1 Salary. In consideration of her services hereunder,
the Executive shall receive a base salary payable at the rate of $90,000 per
annum during the first year of the term of this Agreement, and $100,000 per
annum during the second year of such term, subject to such increases, but not
decreases therein, to be made from time to time during the term hereof as the
Board of Directors, or the Compensation Committee thereof, may deem appropriate.
The payment of such salary shall be made in twice monthly installments and shall
be subject to all applicable withholding obligations imposed upon the Company by
federal, state and local taxing authorities. The Board of Directors, or said
Committee, may in its discretion approve one or more bonuses to the Executive
based on performance or such other
circumstances as the Board deems appropriate.
Section 2.2 Stock Options. In order to stimulate the efforts of
the Executive, strengthen her desire to remain with the Company and provide her
with a more direct interest in its welfare by encouraging and enabling the
Executive to acquire shares of the Company's $.01 par value common stock
("Common Stock"), the Company hereby agrees to grant to the Executive:
(a) an option to purchase 100,000 shares of Common Stock
during the five year period commencing on the Commencement Date at an exercise
price of $5.00 per share; and
(b) in the event that the Executive shall have been
continuously employed by the Company during the period commencing on the
Commencement Date and continuing through April 30, 1996, an option to purchase
50,000 shares of Common Stock during the five year period commencing on May 1,
1996 at an exercise price equal to the closing price of the Common Stock, as
quoted on April 30, 1996 on the principal market on which such shares shall then
be (or if no trading in the Common Stock shall have taken place on such date,
then on the next preceding date on which such trading shall have occurred). If
the Common Stock shall not then be registered under the Securities and Exchange
Act of 1934 and publicly traded on the Nasdaq Stock Market or any other
exchange, the exercise price for said option shall be determined by mutual
agreement between the Company's Board of Directors and the Executive.
(c) The above-described options shall not be "incentive
stock options," as such term is used in Section 422A of the Internal Revenue
Code of 1986, as amended. The option described in Section 2.2(a) hereof shall be
fully vested on the Commencement Date, and shall be exercisable at any time
during the term thereof, regardless of the Executive's employment status with
the Company on the date or dates of exercise thereof. The option described in
Section 2.2(b) hereof shall be fully vested on May 1, 1996, and shall be
exercisable at any time during the term thereof, regardless of the Executive's
employment status with the Company on the date or dates of exercise thereof. All
of the rights and obligations of the Company and the Executive with respect to
the issuance of shares of the Common Stock underlying each of said options shall
be, as set forth in the form of option annexed hereto as Exhibit A.
Section 2.3 Employee Benefits. The Company will provide the
Executive and her spouse during the term of this Agreement with health insurance
coverage (medical and vision) commensurate with the coverages presently provided
to the Executive through the plan currently in effect between the Company and
Xxxxxx Permanente/Xxxxxx Foundation Health Plan, Inc.
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Section 2.4 Vacation. The Executive shall be entitled to three
weeks of paid vacation during each year of the term of this Agreement. The
Executive shall coordinate her vacation plans so that she and the Company's
Chief Executive shall not be away from the Company at the same time.
Section 2.5 Executive Benefits.
(a) Life Insurance. The Company shall also acquire,
continue, renew and/or replace, as necessary, and shall pay all premiums due and
owing with respect to, one or more policies insuring the life of the Executive
in the aggregate amount of $750,000 during the first year of the term of this
Agreement, and $1,000,000 during the second year of such term. The proceeds of
such insurance shall be payable to the Executive's chosen beneficiary pursuant
to, and in satisfaction of the Company's obligations under, Section 5.3 hereof.
(b) Leased Automobile. In consideration of the Executive's
relinquishment of her right to take 11 weeks of accrued vacation, and in lieu of
her receipt of payment for such benefit, the Company shall lease an automobile
for the Executive's exclusive use during the term of this Agreement. The
obligation under such lease to be paid by the Company shall not exceed $800.00
per month, provided, however, that the Company shall be responsible for payment
for the insurance and maintenance of, and the consumption of fuel by, the
automobile.
Section 2.6 Expense Reimbursement. The Company shall pay or
reimburse the Executive for all reasonable expenses actually incurred by her in
performing the services to be rendered by her hereunder. Such
payment/reimbursement shall be made within a reasonably prompt time in
accordance with, and upon the Executive's compliance with, the Company's then
pertaining expense reimbursement policies and procedures.
ARTICLE 3
Proprietary Information
Section 3.1 Definitions. For purposes of this Agreement, the
following definitions shall apply:
(a) "Trade Secrets" shall mean all Software,
documentation, know-how, and information relating to the past, present, or
future business of the Company or any plans therefor, or relating to the past,
present, or future business of a third party or plans therefor which are
disclosed to the Company, which the Company does not disclose to third parties
without restrictions on use or further disclosure; provided, however, Trade
Secrets shall not include the general knowledge and experience of the Executive
obtained during the employment of the
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Executive by the Company.
(b) "Proprietary Information" shall mean Trade Secrets,
and any and all processes, methods, techniques, projects, developments, plans,
research data, financial data, personnel data, customer lists and supplier lists
created by or for the Company which is maintained in confidentiality and
disclosed only to other executives or employees of the Company on a need to know
basis.
(c) "Software" shall mean each of one or more standard
computer programs created in whole or in part by the Company and/or its
executives and employees or by anyone else as an "employee for hire" of the
Company (which each may consist of one or more modules or sub-programs),
together with the media upon which it resides, and all accompanying standard
documentation pertaining thereto, as well as all "derivative works" thereof,
i.e., any source code, object code, software instruction or set of software
instructions, or documentation, in human readable or machine readable form,
which is in whole or in part based upon, or derived from, Software.
Section 3.2 The Executive's Obligations Concerning Trade Secrets.
(a) During the term of this Agreement and at all times
thereafter, the Executive shall treat Trade Secrets on a confidential basis and
not disclose them to others without the prior written permission of the Company,
or use them for any purpose other than for the performance of services for the
Company.
(b) Trade Secrets are the Company's sole and exclusive
property and the Executive shall surrender to the Company possession of all
Trade Secrets in her possession upon any suspension or termination of her
employment. If after the suspension or termination of the Executive's employment
hereunder, she becomes aware of any Trade Secrets in her possession, she shall
promptly surrender possession thereof to the Company.
Section 3.3 The Executive's Obligations Applicable to All
Proprietary Information.
(a) During the term of this Agreement and at all times
thereafter, the Executive shall not disclose any Proprietary Information to
others outside the Company or use the same for any unauthorized purposes without
written approval by the Board of Directors of the Company, unless and until such
Proprietary Information has become public knowledge other than through its
unauthorized dissemination by the Executive.
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(b) The Executive agrees that all files, letters,
memoranda, reports, records, data, sketches, drawings, notebooks, program
Software diagrams, documentation, schematics and printouts in any tangible media
including, but not limited to, paper, photographs, computer disks and tapes and
other forms of human-readable and machine-readable media, containing Proprietary
Information, whether created by the Executive or others, which shall come into
the Executive's custody or possession, shall be and are the exclusive property
of the Company to be used by the Executive only in the performance of her duties
for the Company. All such tangible media or copies thereof and all other
tangible property of the Company in the Executive's custody or possession shall
be delivered to the Company, upon the earlier of (i) a request by the Company or
(ii) termination of the Executive's employment. After such delivery, the
Executive shall not retain any such tangible media or copies thereof or any such
other tangible property.
(c) The Executive agrees that her obligation not to
disclose or to use information, know-how and records of the types set forth in
Sections 3.3(a) and (b) above, and her obligation to return tangible media and
other tangible property, set forth in Section 3.3(b) above, also extends to such
types of information, know-how, records and tangible property of customers of
the Company or suppliers to the Company or other third parties who may have
disclosed or entrusted the same to the Company or to the Executive in the course
of the Company's business.
(d) The Executive shall provide the Company with all
information, documentation and assistance that it may request to perfect,
enforce, or defend the proprietary rights in or based on Trade Secrets. The
Company, in its sole discretion, shall determine the extent of the proprietary
rights, if any, to be protected. All such information, documentation and
assistance shall be provided at reasonable compensation to the Executive, if
provided after any suspension or termination of the Executive's employment.
ARTICLE 4
Competitive Activities
Section 4.1 During the term of her employment hereunder, the
Executive shall not:
(a) Perform any services, directly or indirectly, for any
person or entity competing, directly or indirectly, with the Company;
(b) Own, directly or indirectly, an interest (other than a
common stock ownership interest of not more than 5% of a corporation listed on a
national securities exchange or
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traded through NASDAQ) in any entity competing, directly or indirectly, with the
Company; and
(c) Compete, directly or indirectly, with any products or
services marketed or offered by the Company.
Section 4.2 During the one year period after any suspension or
termination of the Executive's employment with the Company, the Executive shall
not contact, directly or indirectly, any of the Company's customers with whom
she had contact during the last year of her employment hereunder for the purpose
of soliciting business.
ARTICLE 5
Termination of Agreement
Section 5.1 Events of Termination. The employment of the
Executive shall terminate prior to the end of the term of this Agreement under
any of the following circumstances.
(a) The death of the Executive.
(b) In the event that the Executive shall substantially
fail to perform her duties hereunder due to illness or other incapacity, and if
such illness or other incapacity shall continue for a period of six months, the
Company shall have the right, by notice sent to the Executive at her residence
of record with the Company, to terminate the Executive's employment hereunder as
of a date (not less than four months after the date of the sending of such
notice) to be specified in such notice.
(c) In the event of gross malfeasance, gross misconduct or
a felony conviction of the Executive, or for other similar good cause materially
detrimental to the Company, as determined by a court of competent jurisdiction,
the Company shall have the right, by notice thereof sent to the Executive at her
residence of record with the Company, to terminate the Executive's employment
hereunder "for cause" as of a date specified in such notice.
(d) In the event that the Executive resigns as the
Company's Senior Vice President and Chief Financial Officer.
(e) In the event that (i) a majority of the Company's
outstanding Common Stock is acquired by a third party; (ii) substantially all of
the Company's assets are acquired by a third party; or (iii) the Company is
merged with and into another entity, and in either of such events, such third
party or entity or the Executive elects to terminate her employment hereunder.
Section 5.2 The Executive's Entitlements Upon
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Termination - General.
(a) Except to the extent specifically provided for herein,
the Executive shall not be entitled to receive any severance pay or other form
of compensation upon termination of her employment hereunder.
(b) In the event that the Executive's employment hereunder
shall terminate pursuant to any of the provisions of Section 5.1 hereof, the
Executive (or her estate in the event of her death) shall be entitled to receive
all unpaid Compensation1 and bonuses which shall have accrued through the date
of termination.
Section 5.3 The Executive's Entitlements Upon Termination -
Death. In the event of termination of this Agreement due to the Executive's
death, the sole obligation which the Company shall owe to the Executive's estate
(or any other beneficiary of the Executive's choosing) shall be to pay or cause
to be paid the insurance benefits described in Section 2.5(a) hereof.
Section 5.4 The Executive's Entitlements Upon Termination Illness
or Incapacity. In the event of termination of this Agreement due to illness or
other incapacity, the Executive shall also receive severance pay equal to one
year's salary payable in the amount equivalent to her annual salary at the time
when the Company shall have sent to the Executive the notice specified in
Section 5.1(b) hereof. Unless otherwise agreed by the Company, such severance
shall be paid in the same manner as the Executive's salary would have been paid
to her during the course of the applicable period of time.
Section 5.5 The Executive's Entitlements Upon Termination Change
of Control. In the event that the Executive's employment shall terminate
pursuant to any of the provisions of Section 5.1(e) hereof, the Executive shall
be entitled to receive, in lieu of any benefit or provision made pursuant to any
other section or subsection of this Agreement: (a) all salary which otherwise
would be due to her during the remainder of the term of this Agreement pursuant
to Section 2.1 hereof, payable in the manner provided in such section; (b) all
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(1) i.e., the aggregate amount reportable by the Company on the Executive's IRS
W-2 form with respect to the salary and employee and executive benefits which he
would have received through the date on which termination or death occurs,
including all sums payable to the Executive for accrued but unused vacation
time, less all payments made during such year to him or for his benefit pursuant
to Section 2.1 hereof.
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benefits which otherwise would be due to her during the remainder of the term of
this Agreement pursuant to Sections 2.3 and 2.5 hereof, to be provided in the
manners provided in such sections; and (c) the sum of $100,000 which shall be
payable in a lump sum (less required tax withholdings) not later than 30 days
after the date of such termination. The provisions of this Section 5.5 shall
survive the termination of this Agreement, and shall be binding upon any third
party or entity which acquires a majority of the Company's outstanding Common
Stock or substantially all of its assets, or which is the surviving constituent
of a merger with the Company.
ARTICLE 6
Indemnification
Section 6.1 The Executive's Entitlements. Subject to any
limitations imposed by applicable law, the Certificate of Incorporation and/or
Bylaws of the Company, and until such time as the Company shall enter into a
separate indemnification agreement with the Executive, the Company will
indemnify and defend the Executive hereunder to the fullest extent permitted by
applicable law with respect to all claims for compensatory damages (but not
punitive damages or the expenses incurred by the Executive in defending against
such claims) alleged against the Executive in any action, suit or proceeding
commenced against her by reason of her status as a present or former officer,
director or employee of the Company, or any subsidiary or affiliate of the
Company, including actions brought by or in the right of the Company to procure
a judgment in its favor. The provisions of this Article shall survive the
termination of this Agreement.
ARTICLE 7
Litigation Expenses
Section 7.1 Payment by the Company. In the event the Executive
becomes a party to any litigation regarding any matter pertaining to this
Agreement, or any act of commission or omission alleged to have been made by the
Executive while employed by the Company, including actions brought by or in the
right of the Company to procure a judgment in its favor (each of which shall
hereinafter be referred to as a "Covered Proceeding"), the Executive shall have
the right to have her expenses, including, but not limited to all of her legal
fees in prosecuting or defending such proceeding, paid by the Company as such
expenses are incurred during the course of such Covered Proceeding. This right
shall be in addition to any other rights of indemnification the Executive may
have under the Certificate of Incorporation or Bylaws of the Company, or
pursuant to any Indemnity Agreement or to applicable law. The provisions of this
Article shall survive the termination of this Agreement.
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Section 7.2 Decision by the Company Not to Pay Expenses in
Advance. Anything herein or elsewhere contained to the contrary notwithstanding,
in the event that the Board of Directors determines in good faith, after
reviewing the facts available to it at the time of commencement of a Covered
Proceeding, that (a) there is a substantial likelihood that the claims alleged
against the Executive will be sustained on the merits; (b) the facts underlying
such claims would support a termination of this Agreement for cause pursuant to
Section 5.1(c) hereof; and (c) it would not, under such circumstances, be in the
best interest of the Company to pay the expenses incurred by the Executive
including, but not limited to all of her legal fees in prosecuting or defending
such proceeding, as such expenses are incurred, the Company shall give notice in
writing to the Executive of its determination and the facts upon which the same
shall be based (a "Determination"). In such event, unless and until the court
having jurisdiction over the Covered Proceeding (or another court of competent
jurisdiction), after reviewing the relevant facts and the reasons upon which the
Determination has been based, orders the Company to undertake to pay the
Executive's expenses, as the same are incurred, the provisions of Section 7.1
hereof shall not be deemed to apply to such Covered Proceeding.
ARTICLE 8
Miscellaneous
Section 8.1 Assignability. This Agreement shall not be assignable
by the Executive. This Agreement shall not be assignable by the Company without
the prior written consent of the Executive except to a corporation which is the
surviving entity in any merger involving the Company, or to a corporation which
acquires all or substantially all of the stock or assets of the Company.
Section 8.2 Notices. All notices, advices, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given to made on the next business day if delivered by facsimile
transmission, overnight courier or Express Mail, or on the tenth business day
after being mailed by first class, certified mail, postage prepaid, and properly
addressed as follows:
To the Company at:
c/o Manhattan Associates
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxx
To the Executive at:
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00000 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
or to such other address as either party may designate by notice given in
accordance with this Article.
Section 8.3 Benefit. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successor and assigns.
Section 8.4 Entire Agreement; Modification Waiver. This Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter contained herein and supersedes all prior and contemporaneous agreements,
representations and understandings of the parties. No termination, modification
or amendment of this Agreement shall be binding, unless executed in writing by
the parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver.
Section 8.5 Sections Headings. The section headings of this
Agreement are included for convenience only and shall not affect in any way the
construction of interpretation of any of the provisions hereof.
Section 8.6 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York
without giving effect to its conflict of laws principles.
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Section 8.7 Severability. In the event that any one or more of
the provisions contained in this Agreement shall be determined to be invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in any other respect and the remaining
provisions of this Agreement shall not be in any way impaired.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
Pioneer Commercial Funding Corp.
By:________________________________
Xxxxxx X. Xxxxxxxx,
Chairman and Chief Executive
_________________________________
Xxxxxx Xxxxx
