EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of October, 1996 by
and between DELTA FINANCIAL CORPORATION, a Delaware corporation (the
"Corporation"), and Xxxxxxx X. Xxxxxxxx (the "Executive").
W I T N E S S E T H :
In consideration of the representations, warranties
and conditions contained herein, the parties hereto agree as follows:
1. Position and Responsibilities.
1.1. The Executive shall serve in an executive
capacity as a Senior Vice President of the Corporation. The Executive
shall perform such functions and undertake such responsibilities as
are customarily associated with such capacity. The Executive shall
hold such directorships and executive officerships in the Corporation
and any subsidiary to which, from time to time, he may be elected or
appointed during the term of this Agreement.
1.2. The Executive shall devote his full time and
best efforts to the business and affairs of the Corporation and to the
promotion of its interests.
2. Term of Employment.
2.1. The term of employment shall be three years,
commencing with the date hereof, unless sooner terminated as provided
in this Agreement. The initial term of employment and any extension
thereof is herein referred to as the "Term."
2.2. Notwithstanding the provisions of Section 2.1
hereof, the Corporation shall have the right, on written notice to the
Executive, to terminate the Executive's employment for Cause, such
termination to be effective as of the date on which notice is given or
as of such later date otherwise specified in the notice.
2.3. For purposes of this Agreement, the term
"Cause" shall mean any of the following actions by the Executive: (a)
failure to comply with any of the material terms of this Agreement;
(b) engagement in gross misconduct injurious to the Corporation; (c)
knowing and willful neglect or refusal to attend to the material
duties reasonably assigned to him by the Board of Directors or the
President of the Corporation; (d) intentional misappropriation of
property of the Corporation to the Executive's own use; (e) the
commission by the Executive of an act of embezzlement; (f) Executive's
conviction for a felony or if criminal penalties are imposed on
Executive relating to any taxes due and owing by Executive; or (g)
Executive's engaging in any activity which would constitute a material
conflict of interest with the Corporation.
2.4. If the Executive's employment with the
Corporation shall be terminated by the Corporation other than pursuant
to Sections 2.2, 4.1 or 4.2 hereof, then the Corporation shall pay:
(a) if such termination occurs within the first year of the Term of
this Agreement, one (1) year's salary, less withholding and payroll
taxes; or (b) if such termination occurs after the first year of the
Term of this Agreement, fifty
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(50%) percent of the remaining salary due under the balance of the
Term of this Agreement, less withholding and payroll taxes. Any
payments made under this Section 2.4 shall (a) be paid in equal
installments over the six months following any such termination, and
(b) be based upon the Executive's salary as it existed immediately
prior to such termination.
3. Compensation.
3.1. The Corporation shall pay or cause Delta
Funding Corporation to pay to the Executive for the services to be
rendered by the Executive hereunder a salary at the rate of $125,000
per annum. The salary shall be payable in equal installments in
accordance with the Corporation's normal payroll practices. Such
salary will be reviewed at least annually and shall be increased (but
not decreased) by the Board of Directors of the Corporation in such
amount as determined in its sole discretion. In addition to the
salary, the Company will pay commissions to the Executive pursuant to
a separate commission agreement between the Company and the Executive
to be entered into simultaneous with this agreement. The Company may
also pay or cause Delta Funding Corporation to pay the Executive an
annual bonus with respect to each fiscal year of the Corporation,
either on an "ad hoc" basis or pursuant to a bonus plan or arrangement
as may be established at the Corporation's discretion for senior
executives of the Corporation or Delta Funding Corporation. Nothing
herein contained shall, however, obligate the Corporation to pay any
bonus to the Executive, it being understood that any such bonus shall
be in the sole
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discretion of the Board of Directors and that the amount thereof, if
any, may vary depending on actual performance of the Corporation and
the Executive as determined in the discretion of the Board.
3.2. On the date the Corporation adopts its 1996
Stock Option Plan (the "1996 Option Plan"), the Executive shall be
granted a non-qualified option pursuant to the terms of the 1996
Option Plan to purchase 25,000 shares of the Corporation's Common
Stock, par value $.01 (the "Common Stock") at the initial public
offering price, which option shall vest 20% per year and have a term
of five years. Any option granted pursuant to this Section 3.2. shall
be issued pursuant to a separate option agreement mutually acceptable
to the Corporation and the Executive.
3.3. The Executive shall be entitled to participate
in, and receive benefits from, any insurance, medical, disability,
bonus, incentive compensation or other employee benefit plan, if any
are adopted, of the Corporation or any subsidiary which may be in
effect at any time during the course of his employment by the
Corporation and which shall be generally available to the Executive on
terms no less favorable than to other senior executives of the
Corporation or its subsidiaries.
3.4. The Corporation agrees to reimburse the
Executive for all reasonable and necessary business expenses
incurred by him on behalf of the Corporation in the course of
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his duties hereunder upon the presentation by the Executive of
appropriate vouchers therefor.
3.5. The Executive will be entitled each year of this
Agreement to a paid vacation of three weeks.
3.6. Upon termination of this Agreement for Cause or
due to the death or incapacity of the Executive (as defined in Section
4.1), the Executive shall be entitled to all compensation (including
pro rata bonus) and benefits accrued and unpaid up to the date of
termination.
3.7. The Executive shall not be required to mitigate
damages or the amount of any payment provided to him under this
Agreement by seeking other employment or otherwise.
3.8. Nothing contained herein shall prohibit the
Board of Directors of the Corporation, in its sole discretion, from
increasing the compensation payable to the Executive pursuant to this
Agreement and/or making available to the Executive other benefits in
addition to those to which the Executive is entitled hereunder.
4. Death; Incapacity.
4.1. If, during the period of employment hereunder,
because of illness or other incapacity, the Executive shall fail for a
period of 90 consecutive days, or for shorter periods aggregating more
than 90 days during any twelve month period, to render the services
contemplated hereunder, then the Corporation, at its option, may
terminate the term of employment hereunder upon not less than 10 days
written notice from the Corporation to the Executive, effective on the
10th day after
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giving of such notice; provided, however, that no such termination
will be effective if prior to the 10th day after giving such notice,
the Executive's illness or incapacity shall have terminated and he
shall be physically and mentally able to perform the services required
hereunder and shall be performing such services.
4.2. In the event of the death of the Executive
during the term hereof, the employment hereunder shall terminate on
the date of death of the Executive.
4.3. The Corporation (or its designee) shall have
the right to obtain for its benefit an appropriate life insurance
policy on the life of the Executive, naming the Corporation (or its
designee) as the beneficiary. If requested by the Corporation, the
Executive agrees to cooperate with the Corporation in obtaining such
policy.
4.4. In the event the employment of Executive is
terminated by the Corporation as the result of the death or incapacity
of the Executive, the Corporation agrees to continue to pay the
Executive (or his estate) his then rate of salary for a period of one
year after such termination.
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5. Other Activities During Employment;
Non-Competition; Solicitation.
5.1. The Executive shall not during the term of this
Agreement undertake or engage in any other employment, occupation or
business enterprise. Subject to compliance with the provisions of this
Agreement, the Executive may engage in reasonable activities with
respect to personal investments of the Executive.
5.2. During Executive's employment, and for the
remaining Term of the Agreement in the event that the Executive leaves
the Company's employ on his own volition during the Term of the
Agreement, neither the Executive nor any entity in which he may be
interested as a partner, trustee, director, officer, employee,
shareholder, option holder, lender of money, guarantor or consultant,
shall be engaged directly or indirectly in any business engaged in by
the Corporation in any area where the Corporation, or any subsidiary,
conducts such business at any time during this Agreement; provided,
however, that the foregoing shall not be deemed to prevent the
Executive from investing in securities if such class of securities in
which the investment is so made is listed on a national securities
exchange or is issued by a company registered under Section 12(g) of
the Securities Exchange Act of 1934, so long as such investment
holdings do not, in the aggregate, constitute more than 5% of the
voting stock of any company's securities; provided, further, however,
that this Section 5.2 shall not
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apply if the Executive's employment is terminated by the
Corporation.
5.3. The Executive will not at any time during his
employment with the Corporation and for a period of one year after
Executive leaves the Corporation's employ for any reason, solicit (or
assist or encourage the solicitation of) any employee of the
Corporation or any of its subsidiaries or affiliates to work for
Executive or for any business, firm, corporation or other entity in
which the Executive, directly or indirectly, in any capacity described
in Section 5.2 hereof, participates or engages (or expects to
participate or engage) or has (or expects to have) a financial
interest or management position.
5.4. The Executive shall not at any time during this
Agreement or after the termination hereof directly or indirectly
divulge, furnish, use, publish or make accessible to any person or
entity any Confidential Information (as hereinafter defined). Any
records of Confidential Information prepared by the Executive or which
come into Executive's possession during this Agreement are and remain
the property of the Corporation and upon termination of Executive's
employment all such records and copies thereof shall be either left
with or returned to the Corporation.
5.5. The term "Confidential Information" shall mean
information disclosed to the Executive or known, learned,
created or observed by him as a consequence of or through his
employment by the Corporation, not generally known in the
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relevant trade or industry, about the Corporation's business
activities, services and processes, including but not limited to
information concerning advertising, sales promotion, publicity, sales
data, research, finances, accounting, methods, processes, business
plans, broker or correspondent lists and records and potential broker
or correspondent lists and records.
6. Assignment. The Corporation shall require any
successor or assign to all or substantially all the assets of the
Corporation (whether by merger or by acquisition of stock, assets or
otherwise) prior to consummation of any transaction therewith, to
expressly assume and agree to perform in writing this Agreement in the
same manner and to the same extent that the Corporation would be
required to perform it if no such succession or assignment had taken
place. This Agreement shall inure to the benefit of and be binding
upon the Corporation, its successors and assigns, and upon the
Executive and his heirs, executors, administrators and legal
representatives. This Agreement shall not be assignable by the
Executive.
7. No Third Party Beneficiaries. This Agreement
does not create, and shall not be construed as creating, any
rights enforceable by any person not a party to this Agreement,
except as provided in Section 6 hereof.
8. Headings. The headings of the sections hereof
are inserted for convenience only and shall not be deemed to
constitute a part hereof nor to affect the meaning thereof.
9. Interpretation. In case any one or more of the
provisions contained in this Agreement shall, for any reason, be
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held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been
contained herein. If, moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held by a court of
competent jurisdiction to be unenforceable because it is excessively
broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be
enforceable to the extent compatible with the applicable law as it
shall then appear.
10. Notices. All notices under this Agreement shall be in
writing and shall be deemed to have been given at the time when mailed
by registered or certified mail, addressed to the address below stated
of the party to which notice is given, or to such changed address as
such party may have fixed by notice:
To the Corporation:
Delta Funding Corporation
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attn: President
- copy to -
Stroock & Stroock & Xxxxx
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
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To the Executive:
Xxxxxxx X. Xxxxxxxx
000 XxXxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
provided, however, that any notice of change of address shall be
effective only upon receipt.
11. Waivers. If either party should waive any breach
of any provision of this Agreement, he or it shall not thereby
be deemed to have waived any preceding or succeeding breach of
the same or any other provision of this Agreement.
12. Complete Agreement; Amendments. The foregoing is
the entire agreement of the parties with respect to the subject
matter hereof and may not be amended, supplemented, canceled or
discharged except by written instrument executed by both parties
hereto.
13. Equitable Remedies. The Executive acknowledges that
he has been employed for his unique talents and that his leaving the
employ of the Corporation would seriously hamper the business of the
Corporation and that the Corporation will suffer irreparable damage if
any provisions of Section 5 hereof are not performed strictly in
accordance with their terms or are otherwise breached. The Executive
hereby expressly agrees that the Corporation shall be entitled as a
matter of right to injunctive or other equitable relief, in addition
to all other remedies permitted by law, to prevent a breach or
violation by the Executive and to secure enforcement of the provisions
of
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Section 5. Resort to such equitable relief, however, shall not
constitute a waiver or any other rights or remedies which the
Corporation may have.
14. Governing Law. This Agreement is to be governed
by and construed in accordance with the laws of the State of
New York, without giving effect to principles of conflicts of
law.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
DELTA FINANCIAL CORPORATION
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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