June 30, 1999
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of the 30th day of
June, 1999 by and between FIDELITY LEASING, INC., a Pennsylvania corporation
(the "Company") and XXXXXX X. XXXXX, XX. (the "Executive").
WHEREAS, Company is in the business of leasing to the small business
manufacturer programs ("Company Business"); and
WHEREAS, Company desires to have the benefit of Executive's knowledge
and experience in the affairs of Company; and
WHEREAS, Executive desires to be employed by Company upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the adequacy of which is hereby acknowledged, the Company and Executive
agree as follows:
1. Employment.
The Company hereby employs Executive as Senior Vice President for
Operations of the Company (the "Office") and Executive hereby accepts such
employment, positions and responsibilities, and agrees to serve the Company in
such capacities upon the terms and conditions set forth herein.
2. Services.
In carrying out his duties Executive shall report to and accept
direction from the President and the Chief Executive Officer of the Company.
Executive shall serve the Company diligently, competently, and to the
best of his abilities during the period of employment. Executive shall devote
substantially all of his time and attention to the business of the Company and
its affiliates, and shall not undertake any other duties which conflict with
these responsibilities.
Executive shall render such services as may reasonably be required of
him to accomplish the business purposes of the Company, which shall include
specific responsibility for planning for and day to day operation of the Company
Business, and such duties as the President or the Chief Executive Officer may
assign to him from time to time and which are appropriate to the Office.
3. Term.
The term of employment of Executive under this Agreement shall commence
on the date hereof and, unless sooner terminated pursuant to Paragraph 6, shall
continue in full force and effect for a period of three (3) years thereafter.
Such three (3) year period is hereafter referred to as the "Contract Period."
Such Contract Period shall be extended for additional one-year terms unless
either Executive or Company shall have given written notice to the contrary at
least two months before each termination date.
4. Compensation.
(a) Base Salary. The Executive's compensation during the Contract
Period shall be determined by the Board, subject to the next sentence and
Paragraph 4(b). During the Contract Period, the Executive shall receive an
annual base salary ("Annual Base Salary") of not less than his annual base
salary of One Hundred and Eighty Thousand Dollars ($180,000) as in effect
immediately before the Contract Date. The Annual Base Salary shall be payable in
accordance with the Company's regular payroll practice for its senior
executives, as in effect from time to time. During the Contract Period, the
Annual Base Salary may be reviewed for possible increase at least annually. Any
increase in the Annual Base Salary shall not limit or reduce any other
obligation of the Company under this Agreement. The Annual Base Salary shall not
be reduced after any such increase, and the term "Annual Base Salary" shall
thereafter refer to the Annual Base Salary as so increased.
(b) Incentive Compensation. During the Contract Period, the Executive
shall participate in such short-term incentive compensation plans and long-term
incentive compensation plans as shall be decided upon in the discretion of the
Board (the "Incentive Compensation").
5. Benefits.
During the period of employment, Executive shall be entitled to receive
the following additional benefits:
(a) Participation in Benefit Plans. During the Contract Period and, to
the extent specifically provided for herein, thereafter: (A) the Executive shall
be entitled to participate in all applicable incentive, savings, and retirement
plans, practices, policies, and programs of the Company to the same extent as
they are generally available to other senior officers, directors or executives
of the Company, and (B) the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in, and shall receive all benefits
under, all applicable welfare benefit plans, practices, policies, and programs
provided by the Company, including, without limitation, medical, prescription,
dental, disability, sickness benefits, employee life insurance, accidental
death, and travel insurance plans and programs, to the same extent as other
senior officers, directors or executives of the Company.
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(b) Fringe Benefits. Without limitation of any benefits or compensation
to be otherwise provided under this Paragraph, Executive shall be entitled to
receive any and all fringe benefits which he received from Company immediately
prior to the execution of this Employment Agreement. Specifically, and without
limitation, Employee shall continue to receive: a car allowance in the amount of
Eight Hundred Dollars ($800) per month, which allowance shall cover all leasing,
insurance, maintenance and other costs associated with Executive's use of an
automobile, except for gasoline costs; a mobile cellular telephone; and, payment
of dues or membership expenses in professional organizations.
(c) Expenses. Company shall reimburse Executive for all reasonable and
necessary expenses incurred by him in carrying out his duties under this
Agreement. Executive shall present to Company, from time to time, an itemized
account of such expenses in such form as may be required by the Company.
6. Termination.
Anything herein contained to the contrary notwithstanding, Executive's
employment hereunder shall terminate as a result of any of the following events:
(a) Executive's death;
(b) Termination by the Company, for Cause. "Cause" shall encompass the
following: (i) Executive has committed any act of fraud; (ii) illegal conduct or
gross misconduct by the Executive, in either case that is willful and results in
material and demonstrable damage to the business or reputation of the Company.
No act or failure on the part of the Executive shall be considered "willful"
unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act or failure to act that is based upon
authority given pursuant to a resolution duly adopted by the Board, or the
advice of counsel for the Company, shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company; (iii) Executive has been convicted of a felony; (iv) the willful
and continued failure of the Executive substantially to perform the Executive's
duties under this Agreement (other than as a result of physical or mental
illness or injury), after the Board or the President or Chief Executive Officer
of the Company delivers to the Executive a written demand for substantial
performance that specifically identifies, with reasonable opportunity to cure,
the manner in which the Board believes that the Executive has not substantially
performed the Executive's duties; or (v) Executive has failed to follow written
directions of the Board of Directors which are consistent with Executive's
duties hereunder and not in violation of applicable law, provided Executive
shall have two business days after written notice to cure such failure.
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(c) Termination by the Company without Cause, upon forty-five (45) days
prior written notice to Executive;
(d) The Executive becomes disabled by reason of physical or mental
disability for more than one hundred eighty (180) days in the aggregate or a
period of ninety (90) consecutive days during any 365-day period and the Board
of Directors determines, in good faith and in writing, that the Executive, by
reason of such physical or mental disability, is rendered unable to perform his
duties and services hereunder (a "Disability"). A termination of the Executive's
employment by the Company for Disability shall be communicated to the Executive
by written notice, and shall be effective on the thirtieth (30th) day after
receipt of such notice by the Executive (the "Disability Effective Date"),
unless the Executive returns to full-time performance of the Executive's duties
before the Disability Effective Date.
(e) A termination of the Executive's employment for Cause shall be
effected in accordance with the following procedures. The Company shall give the
Executive written notice ("Notice of Termination for Cause") of its intention to
terminate the Executive's employment for Cause, setting forth in reasonable
detail the specific conduct of the Executive that it considers to constitute
Cause and the specific provision(s) of this Agreement on which it relies.
(f) Termination by Executive for "Good Reason" upon thirty (30) days'
prior written notice to the Company. "Good Reason" shall mean: (i) the
assignment to the Executive of any duties inconsistent in any respect with
Paragraph 2 of this Agreement, or any other action by the Company that results
in a diminution in the Executive's position, authority, duties, or
responsibilities, other than an isolated, insubstantial, and inadvertent action
that is not taken in bad faith and is remedied by the Company promptly after
receipt of notice thereof from the Executive; (ii) any failure by the Company to
comply with any provision of Paragraph 2 of this Agreement, other than an
isolated, insubstantial, and inadvertent failure that is not taken in bad faith
and is remedied by the Company promptly after receipt of notice thereof from the
Executive; (iii) any purported termination of the Executive's employment by the
Company for a reason or in a manner not expressly permitted by this Agreement;
(iv) any failure by the Company to comply with Paragraph 18(c) of this
Agreement; or (v) any other substantial breach of this Agreement by the Company
that either is not taken in good faith or is not remedied by the Company
promptly after receipt of notice thereof from the Executive; provided, however,
that Termination by Executive for Good Reason shall be effective only if such
failure has not been cured within thirty (30) days after notice of such failure
has been given to the Company. A termination of employment by the Executive for
Good Reason shall be effectuated by giving the Company written notice ("Notice
of Termination for Good Reason") of the termination within two (2) months of the
event constituting Good Reason, setting forth in reasonable detail the specific
conduct of the Company that constitutes Good Reason and the specific
provision(s) of this Agreement on which the Executive relies.;
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(g) Termination by Executive for any reason other than those set forth
in paragraph 6(f) (other than by such Executive's death or disability) upon
thirty (30) day's prior written notice to the Company.
(h) Termination at the end of the Contract Period by reason of
non-renewal. The giving of notice not to renew by the Company, as provided in
Paragraph 3, shall constitute a termination without cause, provided, however,
that the Company may elect to waive the covenant not to compete contained in
Paragraph 9 hereof, in which case no compensation for any period after the
Contract Period shall be required.
(i) The "Date of Termination" means the date of the Executive's death,
the Disability Effective Date, the date on which the termination of the
Executive's employment by the Company for Cause or without Cause or by the
Executive for Good Reason is effective, or the date on which the Executive gives
the Company notice of a termination of employment without Good Reason, as the
case may be.
7. Consideration Payable to Executive Upon Termination or in the Event
of Disability.
(a) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Contract Period, the Company shall pay to the
Executive's designated beneficiaries (or, if there is no such beneficiary, to
the Executive's estate or legal representative), in a lump sum in cash within
sixty (60) days after the Date of Termination, the sum of the following amounts
(the "Accrued Obligations"): (1) any portion of the Executive's Annual Base
Salary through the Date of Termination that has been earned but not yet been
paid; (2) an amount representing the Incentive Compensation for the period that
includes the Date of Termination, computed by assuming that the amount of all
such Incentive Compensation would be equal to the maximum amount of such
Incentive Compensation that the Executive earned the prior fiscal year, and
multiplying that amount by a fraction, the numerator of which is the number of
days worked in the current fiscal year through the Date of Termination, and the
denominator of which is the total number of work days in the relevant current
fiscal year; and (3) any accrued but unpaid Incentive Compensation and vacation
pay. Any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) that has not yet been paid will be paid in
accordance with the terms and conditions under which such amounts were initially
deferred. In the event of termination under this paragraph, all other benefits,
payments or compensation to be provided to Executive hereunder shall terminate
and the rights of Executive in any stock option or incentive plans shall be
governed solely by the terms of the applicable plan.
(b) By the Company for Cause; By the Executive Other than for Good
Reason. If the Executive's employment is terminated by the Company for Cause
during the Contract Period, the Company shall pay the Executive the Annual Base
Salary through the Date of Termination to the extent earned but not yet paid. If
the Executive voluntarily terminates employment during the Contract Period,
other than for Good
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Reason, the Company shall pay the Executive the Annual Base Salary through the
Date of Termination to the extent earned but not yet paid. The amount of any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) will be paid under the terms and conditions under
which such amounts were initially deferred. In the event of termination under
this paragraph, all other benefits, payments or compensation to be provided to
Executive hereunder shall terminate and the rights of Executive in any stock
option or incentive plans shall be governed solely by the terms of the
applicable plan.
(c) By the Company Other than for Cause or Death; by the Executive for
Good Reason. If, during the Contract Period, the Company terminates the
Executive's employment, other than for Cause or Death, or the Executive
terminates employment for Good Reason, the Company shall pay to Executive,
amounts equal to compensation and benefits set forth in Paragraphs 4 and 5 as if
he had remained employed by the Company pursuant to this Agreement, through the
end of the Contract Period or for a period of one (1) year, whichever is longer,
all such sums to be payable at the time when the same would have become due and
payable if Termination had not occurred; provided, that the Incentive
Compensation portion shall be equal to the prorated Incentive Compensation paid
to the Executive in the fiscal year ending prior to termination; provided,
further, that Executive shall continue to receive for the period described above
benefits described in Paragraph 5(a) and, to the extent any benefits described
in Paragraph 5(a) cannot be provided pursuant to a plan or program maintained by
the Company for its executives, the Company shall provide such benefits outside
such plan or program at no additional cost (including without limitation tax
cost) to the Executive and his family; and provided, finally, that during any
period when the Executive is eligible to receive benefits of the type described
in clause (B) of Paragraph 5(a) under another employer-provided plan, the
benefits provided by the Company under this Paragraph 7(c) may be made secondary
to those provided under such other plan. In addition to the foregoing, any
restricted stock of Company, its parent company or affiliates outstanding on the
Date of Termination shall be fully vested as of the Date of Termination and all
options outstanding on the Date of Termination shall be fully vested and
exercisable and shall remain in effect and exercisable through the end of their
respective terms, without regard to the termination of the Executive's
employment. The payments and benefits provided pursuant to this Paragraph 7(c)
are intended as liquidated damages for a termination of the Executive's
employment by the Company other than for Cause or for the actions of the Company
leading to a termination of the Executive's employment by the Executive for Good
Reason, and shall be the sole and exclusive remedy therefor. If Executive is
terminated by reason of Disability, Executive shall assign to Company any
benefits received on account of Company provided disability insurance for the
period on which his severance payment is based (i.e., through the end of the
Contract Period of for a period of one (1) year, whichever is longer). Executive
shall not be required to mitigate the amount of any payment provided for in this
Paragraph 7(c) by seeking other employment or otherwise, nor shall the amount of
any payment or benefit provided for therein be reduced by any compensation of
any retirement benefit heretofore or hereafter earned by Executive as the result
of employment by any other person, firm or corporation.
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8. Confidential Information.
All confidential information or trade secrets which Executive may
obtain during the period of employment relating to the business of the Company
and its affiliates shall not be published, disclosed, or made accessible by him
to any other person, firm, or corporation except in the business and for the
benefits of the Company, and its affiliates. For purposes of this Agreement,
"confidential information" shall include (i) the identity of the Company's
advertisers, lessors and other vendors, and (ii) the Company's rates and billing
practices. The provisions of this paragraph 8 shall survive the termination of
this Agreement, but shall not apply to any information which is or becomes
publicly available otherwise than by any breach of this paragraph 8.
9. Covenant Not to Compete.
Executive shall not, during the period of employment and for the twelve
months, or a period equal to the balance of the Contract Period, whichever is
used to determine payment of consideration under paragraph 7(c) immediately
following termination of employment, for whatever reason, for himself, or on
behalf of any other person, firm, partnership, corporation, or other entity,
directly or indirectly: (i) in the Company Business; or (ii) solicit or hire, or
attempt to solicit or hire, any employee of the Company or its affiliates away
from the Company or its affiliates. Provided, however, for purposes of this
clause (i) of this paragraph, "to engage" shall include Executive's acting as an
owner (of more than 5%), employee, shareholder, director or officer of an entity
so engaged. In the event of Termination of Executive with Cause, the covenants
and restrictions of this Paragraph 9 shall be of no force or effect unless, at
the Company's election, the Company continues to pay amounts of Base Salary
under Paragraph 4(a) and Benefits under paragraphs 5(a) and 5(b) in which case
the covenant not to compete shall be in full force and effect for as long as
such payment continues, or one year, whichever is shorter.
10. Remedies in Case of Breach of Certain Covenants or Termination.
The Company and Executive agree that the damages that may result to the
Company from misappropriation of confidential information or competition as
prohibited by paragraphs 8 and 9 could be estimated only by conjecture and not
by any accurate standard, and, therefore, any breach by Executive of the
provisions of such paragraphs, in addition to giving rise to monetary damages,
will be enjoined.
11. Representations and Warranties.
(a) Executive represents and warrants to the Company that he is under
no contractual or other restriction or obligation which would prevent the
performance of his duties hereunder, or which interfere with the rights of the
Company hereunder. Executive represents and agrees that he has no agreements or
arrangements with the Company or any of its affiliates providing for the
compensation of Executive in any respect other than as set forth in this
Agreement.
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(b) The Company represents and warrants to Executive that it has all
requisite power and authority to execute, deliver, and perform this Agreement
and all necessary corporate proceedings of the Company have been duly taken to
authorize the execution, delivery, and performance of this Agreement by the
Company.
12. Attorneys' Fees.
The Company agrees to pay, as incurred, to the fullest extent permitted
by law, all legal fees and expenses that the Executive may reasonably incur as a
result of any contest (to the extent that the Executive is the prevailing party
with respect to such contest) by the Company, the Executive, or others of the
validity or enforceability of or liability under, or otherwise involving, any
provision of this Agreement. Executive shall be deemed to be the prevailing
party in the ratio that a judgment awarded to him (excluding interest and delay
damages) less any judgment awarded to Company, bears to the amount of damages
sought by Executive (less interest or delay damages) (the "Ratio"). Accordingly,
he shall be entitled to recover all legal fees and expenses reasonably incurred
multiplied by the Ratio.
13. Severability.
In case any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal, or unenforceable in any respect such
validity, 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(s) had never been contained herein, provided
that such invalid, illegal or unenforceable provision(s) shall first be
curtailed, limited or eliminated only to the extent necessary to remove such
invalidity, illegality or unenforceability with respect to the applicable law as
it shall then be applied.
14. Modification of Amement.
This Agreement shall not be modified by any oral agreement, either
expressed or implied, and all modifications hereof shall be in writing and
signed by the parties hereto.
15. Waiver.
The waiver of any right under this Agreement by any of the parties
hereto shall not be construed as a waiver of the same right at a future time or
as a waiver of any other rights under this Agreement.
16. Governing Law.
This Agreement shall be governed by and construed in accordance with
the internal laws of the Commonwealth of Pennsylvania, without giving affect to
the principles of conflicts of laws.
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17. 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. 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 and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean both
the Company as defined above and any such successor that assumes and agrees to
perform this Agreement, by operation of law or otherwise.
18. Notices.
Any notice to be given pursuant to this Agreement shall be sufficient
if in writing and mailed by certified or registered mail, postage-prepaid, to
the addresses listed below:
If to Company:
Fidelity Leasing, Inc.
0000 Xxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
With a copy to:
Ledgewood Law Firm, P.C.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Abt, Esquire
If to Executive:
Xxxxxx X. Xxxxx
0000 Xxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
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IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement as of the date first written above.
FIDELITY LEASING, INC.
By:
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EXECUTIVE:
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Xxxxxx X. Xxxxx, Xx.
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