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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
(Xxxxxx X. Xxxxxxxxx)
THIS EMPLOYMENT AGREEMENT is hereby made as of June 19, 1997, by and between
Xxxxxx X. Xxxxxxxxx, 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 Senior Vice President and Chief Financial
Officer of the Employer and Senior Vice President of 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 set
forth herein 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 June 19, 1997
(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).
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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 Five Thousand and 00/100 Dollars ($125,000) 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 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 Twenty Five
Thousand and 00/100 Dollars ($25,000) 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.
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A. The Employee shall accrue three (3) 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
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 one (1) day 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;
(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
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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:
TO THE EMPLOYER:
MLC Holdings, Inc. 00000 Xxxxxx Xxxxx Xxxx Xxxxx 000 Xxxxxx, Xxxxxxxx 00000
TO THE EMPLOYEE:
Xxxxxx X. Xxxxxxxxx, 0000 Xxxxxx Xxxxxx Xxxx, Xxxxxx, XX 00000
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.
IN WITNESS WHEREOF, the parties have executed this Agreement as the date first
above written.
EMPLOYER:
MLC HOLDINGS, INC., a Delaware corporation
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By
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Xxxxxxx X. Xxxxxx, President
EMPLOYEE:
By:
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Xxxxxx X. Xxxxxxxxx
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