Exhibit 10.9
EMPLOYMENT AND COMPENSATION AGREEMENT
This EMPLOYMENT AND COMPENSATION AGREEMENT ("Agreement") is made as of
the 1st day of July, 1996, by and between ALLSTATE FINANCIAL CORPORATION, a
Virginia corporation having its principal place of business at 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000 (the "Company"), and Xxxxx Xxxxxx
of Arlington, Virginia (the "Employee"). The Company and the Employee in
consideration of the mutual premises contained herein, mutually agree as
follows:
1. EMPLOYMENT. The Company employs the Employee and the Employee agrees
to serve the Company as Executive Vice President. The Employee shall devote the
Employee's full business time and best efforts to the affairs of the Company,
except as may otherwise be consented to by the Board of Directors. Employee
shall perform such other duties commensurate with the Employee's position as may
be specified from time to time by the President of the corporation or the Board
of Directors.
2. TERM. The term of this Agreement shall commence on the date set forth
above, and shall end at the close of business on June 30, 1998, unless further
extended or sooner terminated as hereinafter provided (the "Term").
3. SALARY. During the Term, the Company shall pay to the Employee the
Employee's salary at an annual rate of One Hundred Fifty Thousand and 00/100
Dollars ($150,000.00), which amount may
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be increased from time to time at the discretion of the Board of Directors of
the Company.
4. OTHER COMPENSATION. The Company shall provide the Employee with the
following additional compensation: (i) Subject to meeting eligibility
provisions, any and all general Employee benefit plans, including without
limitation medical, health, life and disability insurance, pension and profit
sharing plans, now or hereafter granted by the Company to the employees of the
Company as a group, shall be granted to the Employee. If a disability insurance
plan is not provided to all employees, the Company will provide a reasonable
substitute for Employee. (ii) Employee shall be eligible to participate in any
employee stock option plans and any performance based compensation plans
(whether cash, stock or otherwise) that may be adopted by the Company. (iii)
Yearly bonuses to be paid to Employee at the discretion of the Board of
Directors of the Company. (iv) Use of a Company-owned automobile and coverage
under customary and appropriate Company-paid hazard, liability and other
insurance (or receipt of an automobile allowance of not less than $350.00 per
month plus reimbursement for costs of insurance, fuel, maintenance and repairs
for one automobile).
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5. REIMBURSEMENT. Usual and normal monetary allowances for bona fide
business expenses incurred by the Employee in connection with the performance of
the Employee's duties hereunder shall be reimbursed by the Company. Such
allowances shall, without limitation, include expenses such as travel,
entertainment, meals, hotels, telephone, telegraph, postage and such other
normal and customary business expenses.
6. VACATION. The Employee shall be entitled to four (4) weeks paid
vacation per year during the term of employment hereunder. The dates of any
vacation periods shall be arranged in order that such vacation days shall not
materially hinder the normal functioning of the Company's business activities.
7. TRADE SECRETS; NON-COMPETITION.
(a) In the course of the Employee's employment, the Employee will have
access to confidential records, data, pricing information, lists of customers
and prospective customers, lists of vendors, books and promotional literature,
leases and agreements, policies and similar material and information of the
Company or used in the course of its business (hereinafter collectively referred
to as "confidential information"). All such confidential information which the
Employee shall use or come into contact with shall remain the sole property of
the Company. The Employee will not, directly or indirectly, disclose or use any
such confidential information, except as required in the course of such
employment. The Employee shall not for a period of one (1) year following the
end of the Term, disclose or
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use in any fashion any confidential information of the Company or any of its
subsidiaries or affiliates, whether such confidential information is in the
Employee's memory or embodied in writing or other physical form, PROVIDED, that
the foregoing requirements shall not apply to any information (i) that (prior to
disclosure by the Employee) has been disclosed by the Company or any third party
or (ii) that Employee discloses (A) to any branch, agency or regulatory
authority of any federal, state or local government to comply with any statute,
regulation, rule, order or ordinance or (B) to any federal, state or local
court, tribunal or other adjudicatory body in connection with any suit, claim or
question arising before such court, tribunal or other adjudicatory body or
otherwise.
In the event of a breach or a threatened breach by the Employee of the
provisions of this subparagraph (a), the Company shall be entitled to an
injunction restraining the Employee from disclosing any of the aforementioned
confidential information. Nothing contained herein shall be construed as
prohibiting the Company from pursuing any other remedies available to the
Company for such breach or threatened breach, including the recovery of damages
from the Employee.
Subject to subparagraph (c) below, this provision shall survive the
termination of this Agreement.
(b) The Employee further agrees that, during the Term (or, if the
Employee's employment is terminated prior to the end of the Term (whether by the
Company or the Employee), during the
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period prior to such termination) and for a period of one (1) year thereafter,
the Employee will not, except with the prior written consent of the Board of
Directors, (i) be employed either as an employee, consultant, officer or
director, by any other non-bank-owned commercial finance company, (ii) solicit
any business from or have any business dealings with, either directly or
indirectly or through corporate or other entities or associates, any customer or
client of the Company (or any subsidiary or affiliate of the Company), (iii)
initiate any action, either directly or indirectly or through corporate or other
entities or associates, that would reasonably be expected to encourage or to
induce any employee of the Company or of any subsidiary or affiliate of the
Company to leave the employ of the Company or of any such subsidiary or
affiliate or (iv) solicit any business from or have any business dealings
whatsoever with, either directly or indirectly or through corporate entities or
associates, any brokers or referral sources that have within the preceding year
referred transactions to the Company. The Employee specifically acknowledges the
necessity for this subparagraph (b), given the nature of the Company's business.
The Employee agrees that the Company shall be entitled to injunctive relief in
the event of a breach of the provisions of this subparagraph (b), the legal
remedies being inadequate to fully protect the Company. Nothing contained herein
shall be construed as prohibiting the Company from pursuing any other
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remedies available to the Company for such breach, including the recovery of
damages from the Employee.
Subject to subparagraph (c) below, this provision shall survive the
termination of this Agreement.
(c) In the event of a Business Combination or Change of Control (as
defined below) involving the Company (whether or not the Company's Board of
Directors recommends such Business Combination or Change of Control for approval
by the Company's shareholders), subparagraphs (a) and (b) of this Paragraph 7
shall, at the time such Business Combination or Change of Control is
consummated, but only in the event Employee's employment is terminated in
connection therewith under the terms of subparagraph 8(c) below, be null and
void and of no further force or effect. For purposes of this Agreement,
"Business Combination" shall mean (i) a merger, consolidation or any other
business combination of the Company with any non-affiliated party, (ii) the
disposition of all or substantially all of the securities, business or assets of
the Company or (iii) a joint venture, reorganization or other transaction (or
series of transactions) as a result of which all or substantially all of the
business or assets of the Company are transferred, with or without a Change of
Control, or any other similar corporate combination or transaction (or series of
related transactions). For purposes of this Agreement, a "Change of Control"
shall mean a transaction (or series of transactions) or other event (or series
of events) that results in the acquisition of a
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controlling interest in the Company by a person or entity (or group of persons
and/or entities) that did not have a controlling interest in AFC prior to such
transaction (or series of transactions) or event (or series of events). As used
in the preceding sentence, the term "controlling interest" means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise); provided that, in any event, any person or entity (or group of
persons and/or entities) which beneficially acquires, directly or indirectly,
25% or more (in number of votes) of the securities having ordinary voting power
for the election of directors of the Company shall be conclusively presumed to
have a controlling interest in the Company. This provision shall be construed so
that if a Business Combination or Change of Control (as defined herein) occurs
on more than one occasion, the terms and provisions of this Agreement shall
apply to the most recent Business Combination or Change in Control.
8. PAYMENTS UPON TERMINATION. The Company shall pay to the Employee upon
termination of employment during the Term, as follows:
(a) If the Employee's employment is terminated by death, the Company
shall continue to pay and provide to the estate of the Employee for a period
equal to one year, Employee's then applicable base salary pursuant to the
provisions of Paragraph 3 for such period, in bi-monthly installments.
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In addition, the Company, as soon as reasonably possible, but not past
the end of the fiscal year of the death of the Employee, shall also pay to the
estate of the Employee (on a pro rata basis up to the date of the Employee's
death) compensation otherwise due and unpaid to the Employee as of the date of,
or in connection with, the Employee's death, pursuant and subject to the
provisions of subparagraphs 4(i), 4(ii) and 4(iii) herein.
(b) In the event the Employee's employment is terminated because of
permanent disability (as defined below), for a period equal to one year, the
Company shall continue to pay and provide to the Employee the Employee's then
applicable salary for such period in bi-monthly installments, pursuant to the
provisions of Paragraph 3 herein, and benefits for such period as if the
Employee were still employed to be paid not later than the last day of such
period under subparagraphs 4(i), 4(ii) and 4(iii) herein. As used herein, the
Employee shall be deemed to be permanently disabled in the event that the
Employee has not been able (due to mental or physical illness or incapacity) to
render services required by this Agreement for a period of ninety (90)
consecutive days.
Any salary payments to be made by the Company under the provisions of
this subparagraph (b) are to be offset by payments, if any, made to the Employee
under any disability insurance plan maintained by the Company.
Payments of compensation to the Employee as set forth in this subparagraph
(b) shall be made by the Company to the
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Employee only if the Employee is not otherwise subject to termination for Cause
(defined below).
(c) In the event that (i) the employment of the Employee is terminated
by the Company other than under the provisions as set forth in Paragraph 8(a) or
(b) herein or (ii) following a Business Combination or Change of Control, (A)
the Employee is not offered a position with the Company that involves duties,
responsibilities, powers and functions comparable to those enjoyed by the
Employee immediately prior to such Business Combination or Change of Control at
an annual rate of compensation at least equal to that annual rate paid to the
Employee immediately prior to such Business Combination or Change of Control and
(B) the Employee's employment is terminated prior to the end of the Term
(whether by the Employee or the Company), then the Company shall pay to the
Employee in addition to any other amounts otherwise payable to the Employee as
of the date of, or in connection with, such termination, on the date of such
termination a lump sum payment equal to the Employee's base salary (on a pro
rata basis) for one year. In addition, for one year, the Company shall provide
to the Employee benefits for such period as if the Employee were still employed
to be paid not later than the last day of such period under subparagraphs 4(i),
4(ii) and 4(iii) hereof.
Notwithstanding anything else contained in this subparagraph (c), no
compensation shall be payable under this subparagraph (c) or subparagraph (b) if
the Employee's employment was or is
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terminated for Cause (as defined below). As used herein, the term "Cause" shall
mean (i) the Employee's conviction of (or entry of a plea of nolo contendre with
respect to) a felony or other crime involving moral turpitude or (ii) a willful,
substantial and continual failure by the Employee in breach of this Agreement to
perform the duties, responsibilities or obligations assigned to the Employee
pursuant to the terms hereof and the failure to cure such breach within 15 days
following written notice from the Company containing specific findings by the
Board of Directors of the Company detailing such failures.
9. VALIDITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions and portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
10. AMENDMENT AND WAIVER. This Agreement constitutes the entire agreement
between the parties as to employment by the Company of the Employee and may not
be changed orally but only by a written document signed by both parties.
No waiver by either party hereto at any time of any breach by the other
party hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of any other breach by such party at
that time or any other time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
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have been made by either party which are not set forth expressly in this
Agreement.
11. ARBITRATION. Any dispute whatsoever relating to the interpretation,
validity, or performance of this Agreement and any other dispute arising out of
this Agreement which cannot be resolved by the parties to such a dispute shall,
upon thirty (30) days written notice by either party, be settled upon
application of any such party by arbitration in Arlington County, Virginia, in
accordance with the rules then prevailing of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators may be
entered in any court of competent jurisdiction. The cost of any arbitration
proceedings under this paragraph shall be shared equally by the parties to such
a dispute.
12. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia (without regard to
conflicts of law principles).
13. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns and shall become effective upon execution by the Company.
14. NOTICE. All notices, and other communications made pursuant to this
Agreement shall be made in writing and shall be deemed to have been given if
delivered personally or mailed, postage prepaid, to the applicable party hereto
at the applicable address first above written, or in either case, to such other
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address as the Company or Employee shall have specified by written notice to the
other party.
15. PARAGRAPH HEADINGS. All paragraph headings are included herein for
convenience and are not intended to affect in any way the meaning or
interpretation of this Agreement.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
17. PRIOR AGREEMENTS SUPERSEDED. In the event that the Employee has
heretofore entered into an employment agreement with the Company, then this
Agreement hereby revokes, replaces and supersedes the prior employment agreement
between the Company and the Employee.
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IN WITNESS WHEREOF, the parties have executed this agreement, the
Company acting herein by its duly authorized officer, the day and year first
above written.
COMPANY:
ALLSTATE FINANCIAL CORPORATION
By:____________________________
Xxxxx Xxxxxxx, President
EMPLOYEE:
________________________________
Xxxxx Xxxxxx
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