EMPLOYMENT AGREEMENT
Exhibit
10.1
AGREEMENT
made as of the 30th
day of
December, 2005 by and between DELTA FINANCIAL CORPORATION, a Delaware
corporation (the “Corporation”), and Xxxxxx X. Xxxxxx (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 Chairman of the Board 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 best efforts to the business and affairs of the
Corporation and to the promotion of its interests.
1.3. The
principal executive offices of the Corporation shall be maintained in Long
Island, New York and the Executive shall not be required to relocate outside
of
Long Island, New York without his consent.
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
Reasonable 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 “Reasonable Cause” shall mean any of the
following actions by the Executive: (a) failure to comply with any of the
material terms of this Agreement, which shall not be cured within 30 days
after
the Executive’s receipt of written notice from the Board of Directors; (b)
engagement in gross misconduct injurious to the Corporation or an affiliate
of
the Corporation, which shall not be cured within 30 days after the Executive’s
receipt of written notice from the Board of Directors; (c) knowing and willful
neglect or refusal to attend to the material duties reasonably assigned to
him
by the Board of Directors, which shall not be cured within 30 days after
the
Executive’s receipt of written notice from the Board of Directors; (d)
intentional misappropriation of property of the Corporation or an affiliate
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 individual income
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
which shall not be cured within 30 days after the Executive’s receipt of written
notice from the Board of Directors. If the provisions contained in subsections
(a), (b), (c) or (g) above cannot be cured within 30 days due to the nature
of
the breach, the cure period shall then be extended for a reasonable period
of
time; provided, however, the Executive undertakes and continues in good faith
to
cure the same.
3. Compensation
3.1. (a) 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 $250,000 per annum. The salary shall be payable in equal installments
in
accordance with the Corporation’s normal payroll practices.
(b) In
addition, at the discretion of the Compensation Committee of the Board of
Directors (the “Compensation Committee”), after consideration of the
Corporation’s actual performance relative to its financial and operational
objectives for any particular period, and the performance of the Executive,
as
well as such other factors deemed appropriate by the Compensation Committee
in
its discretion, the Corporation may also pay the Executive an annual bonus
with
respect to each fiscal year of the Corporation. Such Bonus, if any, may be
paid
in cash, in shares of Delta Financial Corporation’s Common Stock, par value $.01
per share (the "Common Stock") or in any combination of cash and shares of
Common Stock, as determined in the discretion of the Compensation Committee.
Nothing herein contained shall, however, obligate the Corporation to pay
any
annual bonus to the Executive, it being understood that any such bonus shall
be
in the sole discretion of the Compensation Committee and that the amount
thereof, if any, may vary depending upon actual performance of the Corporation
and the Executive as determined in the discretion of the Board.
3.2. The
Executive shall be entitled to participate in, and receive benefits from,
any
insurance, medical, disability, bonus, incentive compensation (including
grants
of non-qualified stock options under any of Delta’s Stock Option Plans, as
determined by the Corporation) 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. The Corporation
agrees
to reimburse Executive for all medical costs and expenses incurred by him
which
are not covered by the Corporation’s group medical plans, up to an aggregate
maximum amount of $100,000 per annum, upon submission of appropriate and
itemized documentation.
3.3. The
Corporation agrees to pay the Executive a car allowance of $1,200 per month.
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
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
five weeks, no more than half of which can be carried forward to future
years.
3.6. Upon
termination of this Agreement for Cause or due to death or incapacity of
the
Executive (as defined in Section 4.1), the Executive (or his estate) shall
be
entitled to all unpaid compensation (including pro-rata Bonus) and benefits
accrued 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. If
the
Executive’s employment with the Corporation shall be terminated by the
Corporation due to death or incapacity of the Executive (as defined in Section
4.1), then, effective upon the date of termination, all stock options and
restricted stock held by the Executive beneficially (in trust or otherwise)
and/or of record, including, without limitation, all stock options and
restricted stock held in trust for the benefit of the Executive in any Key
Employee Share Option Plan, or similar plan, as may be established at the
Corporation’s discretion, shall vest and become immediately exercisable (and in
the case of stock options, shall remain exercisable by the Executive or his
estate for one year following such termination).
4. Incapacity;
Death
4.1. If,
during the period of employment hereunder, because of illness or other
incapacity, the Executive shall fail for a period of 120 consecutive days,
or
for shorter periods aggregating more than 120 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
30 days written notice from the Corporation to the Executive, effective on
the
30th
day
after giving of such notice; provided, however,
that no
such termination will be effective if prior to the 30th
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.
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 make
a
payment to the Executive (or his estate) within 15 days of such termination
equal to the Executive’s annual salary in effect as of the date of such
termination, plus the average of his annual bonuses over the last three years,
less the amount of employer-paid disability insurance received by Executive
under his benefit plan.
5. Other
Activities During Employment; Non-Competition; Solicitation.
5.1. The
Executive shall not during the Term of this Agreement undertake or engage
in
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
the Term of this Agreement, and for a period of one year after the Executive
leaves the employ of the Corporation, in the event that the Corporation
terminates the Executive’s employment with the Corporation pursuant to Sections
2.2 or 4.1, or (b) the Executive terminates his employment with the Corporation
for any reason, then:
5.2.1 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, or any subsidiary, 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 (“Exchange Act”), so long as such investment holdings do not, in the
aggregate, constitute more than 5% of the voting stock of any company’s
securities; and
5.2.2 The
Executive shall not 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.
5.3. 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.
5.4 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 relevant trade
or
industry, about the Corporation’s or any of its subsidiaries’ or affiliates’
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.
n case
any one or more of the provisions contained in this Agreement shall, for
any
reason, be 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 party to which notice is given, or to such changed
address as such party may have fixed by notice given as set forth herein:
To
the
Corporation:
Delta
Financial Corporation
0000
Xxxxxxxx Xxxx
Xxxxx
000
Xxxxxxxx,
Xxx Xxxx 00000
Attn:
General Counsel
And
To
the
Executive:
Xxxxxx
X.
Xxxxxx
[OMITTED]
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 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 the date
first above written.
| DELTA FINANCIAL CORPORATION | ||
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| By: | /s/ XXXXXXX XXXXX | |
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| Title: Executive Vice President | ||
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| Date: December 30, 2005 | By: | /s/ XXXXXX X. XXXXXX |
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| Title: Chairman of the Board | ||
