EMPLOYMENT RETENTION AGREEMENT
THIS AGREEMENT between Olympic Financial Ltd. (the "Company") and
Xxxxxx X. Xxxxxx (the "Executive") is dated as of this 7 day of November, 1996.
WITNESSETH:
WHEREAS, the Company and the Executive have agreed to enter into an
agreement providing the Company and the Executive with certain rights to assure
the Company of continuity of management;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
1. EFFECTIVE DATE: TERM. This Agreement shall govern the terms
and conditions of Executive's employment commencing as of the date hereof (the
"Effective Date").
2. PRIOR EMPLOYMENT AGREEMENT. As of the Effective Date, this
Agreement shall supersede the Executive's Employment Agreement with the Company
dated September 21, 1994, as amended.
3. RETENTION PERIOD. The Company agrees to continue the Executive
in its employ, and the Executive agrees to remain in the employ of the Company,
for the period (the "Retention Period") commencing on the Effective Date and
ending on the date of any termination of the Executive's employment in
accordance with Section 6 of this Agreement.
4. POSITION AND DUTIES (a) NO REDUCTION IN POSITION. During the
Retention Period, the Executive's position (including titles), authority and
responsibilities shall be at least commensurate with the highest of those held
or exercised by him at any time during the 90-day period immediately preceding
the Effective Date.
(b) BUSINESS TIME. During the Retention Period, the Executive
shall devote his full business time during normal business hours to the business
and affairs of the Company and use his best efforts to perform faithfully and
efficiently the responsibilities assigned to him hereunder, to the extent
necessary to discharge such responsibilities, except for
(i) reasonable time spent in serving on corporate, civic or
charitable boards or committees of the nature similar to those on which the
Executive served prior to the Change of Control, or otherwise approved by
the Board, in each case only if and to the extent not substantially
interfering with the performance of such responsibilities, and
(ii) periods of vacation and sick leave to which he is
entitled.
It is expressly understood that the Executive's continuing to serve on any
boards and committees on which he is serving or with which he is otherwise
associated immediately preceding the Effective Date shall not be deemed to
interfere with the performance of the Executive's services to the Company.
5. COMPENSATION AND BENEFITS. (a) BASE SALARY. During the Retention
Period, the Executive shall receive a base salary ("Base Salary") at a monthly
rate at least equal to the monthly salary paid to the Executive by the Company
and any of its affiliated companies immediately prior to the Effective Date.
The Base Salary shall be reviewed at least once each year after the Effective
Date, and may be increased (but not decreased) at any time and from time to time
by action of the Board or any committee thereof or any individual having
authority to take such action in accordance with the Company's regular
practices. Neither payment of the Base Salary nor payment of any increased Base
Salary after the Effective Date shall serve to limit or reduce any other
obligation of the Company hereunder. For purposes of the remaining provisions
of this Agreement, the term "Base Salary" shall mean Base Salary as defined in
this Section 5(a) or, if increased after the Effective Date, the Base Salary as
so increased.
(b) ANNUAL BONUS. In addition to the Base Salary, the Executive
shall be awarded for each fiscal year of the Company ending during the Retention
Period an annual bonus, to be based on reasonable and customary criteria
consistent with the Company's past practices (the "Annual Bonus"), with a target
amount at least equal to 40% of his Base Salary (I.E., that percentage of the
Executive's Base Salary designated by the Company's Compensation Committee for
purposes of Section 4.1 of the Company's 1998-2000 Restricted Stock Election
Plan). If a fiscal year of the Company begins, but does not end, during the
Retention Period, the Executive shall receive an amount with respect to such
fiscal year at least equal to the amount of the Annual Bonus multiplied by a
fraction, the numerator of which is the number of days in such fiscal year
occurring during the Retention Period and the denominator of which is 365. Each
amount payable in respect of the Executive's Annual Bonus shall be paid not
later than 90 days after the fiscal year next following the fiscal year for
which the Annual Bonus (or pro-rated portion) is earned or awarded. Neither the
Annual Bonus nor any bonus amount paid in excess thereof after the Effective
Date shall serve to limit or reduce any other obligation of the Company
hereunder.
(c) FRINGE BENEFITS. During the Retention Period, the Company shall
provide the following fringe benefits to Executive:
(i) HEALTH, DISABILITY AND LIFE INSURANCE. Subject to
satisfaction of the eligibility requirements of such plans and the rules
and regulations applicable thereto, Executive and his family members shall
be entitled to be covered by the Company's group health and dental
insurance plans presently in effect or hereafter adopted by the Company and
applicable to employees of the Company generally and Executive shall be
entitled to be covered by the Company's group disability and life insurance
plans presently in effect or hereafter adopted by the Company and
applicable to the employees of the Company in general. The Company shall
pay the premiums associated with such
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coverage. In the event Executive makes a claim against any disability policy
provided to Executive by the Company pursuant to this Section 5(c)(i) and such
policy calls for a waiting period which is applicable to Executive's claim, the
Company shall pay to Executive during such waiting period his monthly base
salary due during such period and shall provide the other benefits due him under
this Section 5(c)(i).
(ii) VACATION. Executive shall be entitled to four weeks
of vacation without loss of compensation or other benefits pursuant to such
general policies and procedures of the Company as are from time to time
adopted by the Company.
(iii) EXPENSE REIMBURSEMENT. Executive shall be reimbursed
by the Company for all reasonable expenses incurred by him in connection
with the conduct of the Company's business for which he furnishes
appropriate documentation.
(iv) AUTOMOBILE. In the event the Company shall institute a
Company car policy, Executive shall receive benefits thereunder in keeping
with his position with the Company. During any period that the Company has
not instituted a Company car policy, the Company shall provide to Executive
use of an automobile reasonably acceptable to Executive to be used by
Executive in conducting the Company's business. In addition, the Company
shall during such period reimburse Executive (1) an amount equal to the
reasonable cost of insuring and maintaining the automobile used by
Executive for the Company's business, and (2) the cost of maintenance and
the cost of gasoline and oil used in the automobile and in the event of a
loss under the policies insuring said automobile, the amount of any
deductible thereunder applicable to such loss. Such insurance and the
coverage and deductibles thereof shall cover both the business and personal
use of such automobile by Employee, his family and invitees and shall
include such other terms and conditions as are reasonably acceptable to
Executive. Any such reimbursements shall be made upon the Company's
receipt of invoices evidencing incurrence of such expenses. Executive
shall also be paid a monthly amount equal to the reasonable value of
personal use of such automobile, determined in accordance with applicable
federal income tax regulations.
(v) CLUB DUES. The Company shall reimburse Executive the
reasonable cost of the monthly or annual dues, as the case may be, paid by
Executive to maintain his status as a member of the Flagship Athletic Club
or of any other athletic club having equal or lesser membership costs in
lieu of such club. The Company shall also provide to Executive and his
family a membership at Olympic Hills Golf Club and shall reimburse the
Executive for the reasonable cost of the monthly or annual dues, as the
case may be, paid by Executive to maintain such membership. If either such
membership is a corporate membership and is subsequently converted to an
individual membership, the Company shall reimburse Executive for any fees
charged in connection with such conversion.
(vi) OFFICE AND SUPPORT STAFF, During the Retention Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other
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appointments, and to secretarial and other assistance, at least equal to
the most favorable of the foregoing provided to the Executive at any time
during the 90-day period immediately preceding the Effective Date.
6. TERMINATION. (a) DEATH OR DISABILITY. The Executive's employment
shall terminate automatically upon his death. The Company may terminate
Executive's employment during the Retention Period, after having established the
Executive's Disability, by giving the Executive written notice of its intention
to terminate his employment, and his employment with the Company shall terminate
effective on the 90th day after receipt of such notice if, within 90 days after
such receipt, the Executive shall fail to return to full-time performance of his
duties. For purposes of this Agreement, "Disability" means disability which,
after the expiration of more than 26 weeks after its commencement, is determined
to be total and permanent by a physician selected by the Company or its insurers
and acceptable to the Executive or his legal representatives (such agreement to
acceptability not to be withheld unreasonably).
(b) VOLUNTARY TERMINATION. Notwithstanding anything in this
Agreement to the contrary, the Executive may, upon not less than 15 days'
advance written notice to the Company, voluntarily terminate employment during
the Retention Period for any reason, provided that any termination by the
Executive pursuant to Section 6(d) of this Agreement on account of Good Reason
(as defined therein) shall not be treated as a voluntary termination under this
Section 6(b).
(c) CAUSE. The Company may terminate the Executive's employment
during the Retention Period for Cause. For purposes of this Agreement, "Cause"
means (i) gross misconduct on the Executive's part which is demonstrably willful
and deliberate and which results in material damage to the Company's business or
reputation or (ii) repeated material violations by the Executive of his
obligations under Section 4 of this Agreement which violations are demonstrably
willful and deliberate.
(d) GOOD REASON. The Executive may terminate his employment during
the Retention Period for Good Reason. For purposes of this Agreement, "Good
Reason" means
(i) a good faith determination by the Executive that, without
his prior written consent, the Company or any of its officers has taken or
failed to take any action (including, without limitation, (A) exclusion of
the Executive from consideration of material matters within this area of
responsibility, other than an insubstantial or inadvertent exclusion
remedied by the Company promptly after receipt of notice thereof from the
Executive, (B) statements or actions which undermine the Executive's
authority with respect to persons under his supervision or reduce his
standing with his peers, other than an insubstantial or inadvertent
statement or action which is remedied by the Company promptly after receipt
of the notice thereof from the Executive, (C) a pattern of discrimination
against or harassment of the Executive or persons under his supervision and
(D) the subjection of the Executive to procedures not generally applicable
to other similarly situated executives) which changes the Executive's
position (including titles),
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authority or responsibilities under Section 4 of this Agreement or reduces
the Executive's ability to carry out his duties and responsibilities under
Section 4 of this Agreement;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of
notice thereof from the Executive;
(iii) the Company's requiring the Executive to be employed at
any location more than 35 miles further from his principal residence than
the location at which the Executive was employed immediately preceding the
Effective Date; or
(iv) any failure by the Company to obtain the assumption of
and agreement to perform this Agreement by a successor as contemplated by
Section 13(b) of this Agreement.
(e) WITHOUT CAUSE. The Company shall give Executive at least 15
days' advance written notice of any termination of Executive's employment which
is not for Cause and not on account of Executive's Disability.
(f) NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company for Cause or by the Executive for Good Reason during
the Retention Period shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 14(c) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
given, in the case of a termination by the Company for Cause, within 10
business days of the Company's having actual knowledge of all of the events
giving rise to such termination, and in the case of a termination by Executive
for Good Reason, within 180 days of the Executive's having actual knowledge of
the events giving rise to such termination, and which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the termination date is other than the date of receipt of such notice,
specifies such termination date (which date shall be not more than 15 days after
the giving of such notice). The failure by the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his rights
hereunder.
(g) DATE OF TERMINATION. For purposes of this Agreement, the term
"Date of Termination" means (i) in the case of a termination for which a Notice
of Termination is required, the date of receipt of such Notice of Termination
or, if later, the date specified therein and (ii) in all other cases, the actual
date on which the Executive's employment terminates during the Retention Period.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH. If the
Executive's employment is terminated during the Retention Period by reason of
the Executive's death, this Agreement shall terminate without further
obligations to the Executive's legal
5
representatives under this Agreement other than those obligations accrued
hereunder at the date of his death, including, for this purpose (i) the
Executive's full Base Salary through the Date of Termination, (ii) the product
of the Annual Bonus and a fraction, the numerator of which is the number of days
in the current fiscal year of the Company through the Date of Termination, and
the denominator of which is 365 (the "Pro-rated Bonus Obligation"), (iii) any
compensation previously deferred by the Executive (together with any accrued
earnings thereon) and not yet paid by the Company, (iv) any other amounts or
benefits owing to the Executive under any of the Company's incentive
compensation plans, stock option plans, restricted stock plans or other similar
plans and (v) any amounts or benefits owing to the Executive under any of the
Company's employee benefit plans or policies (such amounts specified in clauses
(i), (ii), (iii), (iv) and (v) are hereinafter referred to as "Accrued
Obligations"). Unless otherwise directed by the Executive prior to his death,
all Accrued Obligations shall be paid to the Executive's estate.
(b) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability, the Executive shall receive all Accrued
Obligations and, in addition, from the Date of Termination until second
anniversary of such date, shall continue to participate in or be covered under
the benefit plans and programs referred to in Section 5(c)(i) of this Agreement
or, at the Company's option, to receive equivalent benefits by alternate means
at least equal to those provided in accordance with Section 5(c)(i) of this
Agreement. Anything in this Agreement to the contrary notwithstanding, the
Executive shall be entitled to receive disability and other benefits at least
equal to the most favorable level of benefits available to disabled employees
and/or their families in accordance with the plans, programs and policies
maintained by the Company or its affiliates relating to disability at any time
during the 90-day period immediately preceding the Effective Date.
(c) CAUSE AND VOLUNTARY TERMINATION. If, during the Retention
Period, the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason), the
Executive shall receive all Accrued Obligations other than the Pro-rated Bonus
Obligation.
(d) TERMINATION BY COMPANY OTHER THAN FOR CAUSE OR DISABILITY AND
TERMINATION BY EXECUTIVE FOR GOOD REASON. LUMP SUM PAYMENT. If, during the
Retention Period, the Company terminates the Executive's employment other than
for Cause or Disability, or the Executive terminates his employment for Good
Reason, the Executive shall receive all Accrued Obligations. In addition, the
Company shall pay to the Executive in a lump sum, within 15 days after the Date
of Termination, a cash amount equal to two (2) times the sum of the following
amounts:
(1) the Executive's annual Base Salary at the rate specified in
Section 5(a) of this Agreement;
(2) the Annual Bonus;
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(3) an amount equal to the average annual amount paid and/or
reimbursed to the Executive pursuant to Section 5(c)(iv) and (v)
hereof during the two calendar years preceding the Date of
Termination; and
(4) the present value, calculated using the annual federal
short-term rate as determined under Section 1274(d) of the Code, of
(without duplication) the annual cost to the Company (based on the
premium rates or other costs to it) of obtaining coverage equivalent
to the coverage under the plans and programs described in Section
5(c)(i) of this Agreement;
provided, however, that with respect to the life and medical insurance
coverage referred to in Section 5(c)(i) of this Agreement, at the
Executive's election made prior to the Date of Termination, the Company
shall use its best efforts to secure conversion coverage and shall pay the
cost of such coverage in lieu of paying the lump sum amount attributable
to such life or medical insurance coverage.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the
Executive may have with respect to awards granted to him prior to or during
the Retention Period under any stock option, restricted stock or other plans
or agreements with the Company or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company or any of its affiliated
companies shall be payable in accordance with such plan or program.
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment, distribution,
acceleration of vesting or other benefit which the Executive receives or
becomes entitled to receive, whether alone or in combination, and whether
pursuant to the terms of this Agreement or any other agreement, plan or
arrangement with the Company or any of its affiliates or any of their
respective successors or assigns, but determined without regard to any
additional payments required under this Section 9 (collectively, the
"Payments"), would be subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision), or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of (i) all taxes with respect to the Gross-Up
Payment (including any interest or penalties imposed with respect to such
taxes) including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto), and (ii) the Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed on the Payments.
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(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG Peat
Marwick or such other nationally recognized accounting firm then auditing the
accounts of the Company (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is unwilling or unable to perform its obligations pursuant to
this Section 9, the Executive shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, determined pursuant to this Section 9, shall be paid by the
Company to the Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the potential uncertainty in
the application of Section 4999 of the Code (or any successor provision) at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 9(c) and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than 20 business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
8
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
10. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
thereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise. In no event shall the
Executive be
9
obligated to seek other employment by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and no amount
payable under this Agreement shall be reduced on account of any compensation
received by the Executive from other employment. In the event that the
Executive shall in good faith give a Notice of Termination for Good Reason and
it shall thereafter be determined by mutual consent of the Executive and the
Company or by a tribunal having jurisdiction over the matter that Good Reason
did not exist, the employment of the Executive shall, unless the Company and the
Executive shall otherwise mutually agree, be deemed to have terminated, at the
date of giving such purported Notice of Termination, by mutual consent of the
Company and the Executive and, except as provided in the last preceding
sentence, the Executive shall be entitled to receive only those payments and
benefits which he would have been entitled to receive at such date otherwise
than under this Agreement.
11. DISPUTES; LEGAL FEES AND EXPENSES. (a) Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively and finally by expedited arbitration, conducted before a single
arbitrator in Minneapolis, Minnesota, in accordance with the rules governing
employment disputes then in effect of the American Arbitration Association.
The arbitrator shall be approved by both the Company and the Executive.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
(b) In the event that any claim by the Executive under this
Agreement is disputed, the Company shall pay all reasonable legal fees
and expenses incurred by the Executive in pursuing such claim, provided that the
Executive is successful as to at least part of the disputed claim by reason of
arbitration, settlement or otherwise.
12. CONFIDENTIAL INFORMATION; NONCOMPETITION. (a) The Executive
shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies, and their respective businesses, (I) obtained by the
Executive during his employment by the Company or any of its affiliated
companies and (II) not otherwise public knowledge (other than by reason of an
unauthorized act by the Executive). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company, unless compelled pursuant to an order of a court or
other body having jurisdiction over such matter, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it.
(b) It is mutually acknowledged that by virtue of Employee's
former positions with the Company and its subsidiaries, he has become possessed
of certain valuable and confidential information concerning the customers,
business methods, procedures and techniques of the Company and its subsidiaries.
It is further understood that Employee has developed contacts among the
customers of the Company and its subsidiaries, and it is mutually understood and
agreed that the customers of the Company and its subsidiaries and the business
methods and procedures and techniques developed by the Company and its
subsidiaries are valuable assets and properties of the Company and its
subsidiaries. Without limitation, it is also specifically acknowledged that
great trust on the part of the Company and its subsidiaries has resided in
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Employee, since Employee's former duties have included involvement in the
management, promotion and development of the Company's business. Accordingly,
the parties deem it necessary to enter into the protective covenants set forth
below, the terms and conditions of which have been negotiated by and between the
parties hereto:
(i) Employee agrees that during the Retention Period and
until the first anniversary of the Date of Termination, he will not, directly or
indirectly, on his own behalf or on the behalf of any third party, perform
management, accounting, financial, marketing, sales, administrative or executive
duties, in any business conducted within the Territories (as defined below)
which engages in originating or purchasing automobile or truck loans or leases
from automobile or truck dealers, packaging such loans or leases, reselling such
loans or leases or servicing such loans or leases (the "Restricted Activities").
As used in this Addendum, the term "Territories" means any state in which any
loans or leases originated or acquired by the Company originated (determined by
the location of the dealers from whom the loans or leases were purchased or, in
the case of loans or leases originated by the Company, where the borrower or
lessee resides).
(ii) Employee agrees that during the Retention Period and
until the first anniversary of the Date of Termination, he will not, directly or
indirectly, solicit, divert, take away or attempt to solicit, divert, or take
away from the Company, or any subsidiary, any of the dealers and other sources
from which the Company or any subsidiary acquires loans or leases or from whom
the loan or lease packages are received by the Company or any subsidiary.
(iii) Employee agrees that during the Retention Period and
until the first anniversary of the Date of Termination, he will not, directly or
indirectly, on his own behalf or in the service or on behalf of others, solicit,
divert or hire away, or in any manner attempt to solicit, divert or hire away
any person employed by the Company or any subsidiary, whether or not such
employee is a full-time employee or a temporary employee of the Company or any
subsidiary, and whether or not such employment was pursuant to a written or oral
contract of employment and whether or not such employment was for a determined
period or was at will.
(c) Employee acknowledges that the provisions of this Section 12
constitute a material inducement to the Company to enter into the Agreement.
Employee further acknowledges that the Company's remedy at law for a breach by
him of the provisions of this Section 12 will be inadequate. Accordingly, in
the event of a breach or threatened breach by Employee of any provision of this
Section 12, the Company will be entitled to injunctive relief in addition to any
other remedy it may have. If any of the provisions of, or covenants contained
in, this Section 12 are hereafter construed to be invalid or unenforceable in
any jurisdiction, the same will not affect the remainder of the provisions or
the enforceability thereof in any other jurisdiction, which will be given full
effect, without regard to the invalidity or unenforceability in such other
jurisdiction. If any of the provisions of, or covenants contained in, this
Section 12 are held to be unenforceable in any jurisdiction because of the
duration or geographical scope thereof, the parties agree that the court making
such determination will have the power to reduce the duration or geographical
scope of such provision or covenant and, in its reduced form, such
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provision or covenant will be enforceable; provided, however, that the
determination of such court will not affect the enforceability of this Section
12 in any other jurisdiction.
(d) In no event shall an asserted violation of the provisions of
this Section 12 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement or under any
other agreement, plan or arrangement.
13. SUCCESSORS. (a) This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. The Company shall require any successor to
all or substantially all of the business and/or assets of the Company, whether
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as the Company would be required to perform if no such
succession had taken place.
14. MISCELLANEOUS. (a) APPLICABLE LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State of Minnesota,
applied without reference to principles of conflict of laws.
(b) AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) NOTICES. All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx
Xxxxx, XX 00000
If to the Company: Olympic Financial Ltd.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Secretary
(with a copy to the attention of the
General Counsel)
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or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
(d) TAX WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, State or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) CAPTIONS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(g) POOLING TRANSACTIONS. The parties acknowledge that certain of
the provisions of this Agreement may grant to the Executive benefits in excess
of those granted to the Executive pursuant to the prior employment agreement
(the "Prior Agreement") superseded hereby pursuant to Section 2 hereof. The
parties agree that (i) in the event the grant of any such additional benefit
would, in the opinion of Ernst & Young LLP or such other nationally recognized
accounting firm selected by the Company, prevent the Company from receiving a
pooling of interests treatment under Accounting Principles Board Opinion No. 16,
and (ii) in the further event that such a pooling transaction shall be
consummated by the Company and an acquiring entity; then in such events, the
Executive agrees that the grant of any such additional benefits hereunder shall
be amended as of the day prior to the closing of such pooling transaction to the
extent necessary to enable the Company to gain pooling treatment under
Accounting Principles Board Opinion No. 16 for such transaction; provided such
amendment shall not reduce any such benefit such that it is less than that which
was granted to the Executive under the Prior Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, all
as of the day and year first above written.
OLYMPIC FINANCIAL LTD.
By: /s/ Xxxxxx Xxxxxx
--------------------------
Name:
------------------------
Title: Chairman of the Board
-----------------------
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
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