EMPLOYMENT AGREEMENT
Exhibit 10.23
THIS AGREEMENT is made as of the 1st day of October, 2005, by and between RENT-WAY,
INC., a Pennsylvania corporation, with offices at One RentWay Place, Erie, Pennsylvania 16505 (the
“Company”) and Xxxxxxx X. Xxxxxxx, an individual residing at 0000 Xxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxx 00000 (the “Employee”).
If the Company terminates this Agreement for any reason other than the Employee’s death
pursuant to Section 5, the Employee’s disability pursuant to Section 6, or for cause pursuant to
Section 9, the Employee shall have the right to receive continuing payments of bi-weekly base
salary (at the rate in effect at the time notice of termination is given) during the 12-month
period following the date on which termination is effective. Such continuing payments of base
salary shall be severance pay and shall not constitute a continuation of the Employee’s employment
for any reason.
Employee shall perform such duties and discharge such responsibilities as the President or his
designee shall from time to time reasonably direct. The Employee agrees to perform such duties and
discharge such responsibilities in a faithful manner and to the best of his ability. The Employee
agrees to devote his full business time and attention to the business and affairs of the Company
and to use his best efforts to promote the interests of the Company. The Employee further agrees
that he will engage in no outside business concerns or activities that conflict with his duties to
the Company, or are directly or indirectly competitive with the Company, without the Company’s
prior written consent.
The President or his designee may from time to time assign to the Employee additional duties
and responsibilities and delegate to other employees of the Company duties and responsibilities
normally discharged by the Employee. All such assignments and delegations of duties and
responsibilities shall be made by the President or his designee and may include a reduction of the
Employee’s duties and responsibilities or a reduction in the Employee’s position as reasonably
determined by the President or his designee.
3.1 The Employee shall receive an annual base salary of $215,000, payable in installments in
accordance with the regular payroll practices of the Company. The Company shall deduct
or withhold
from payments of base salary, and from all other payments made to the Employee pursuant to this
Agreement, all amounts which may be required to be deducted or withheld under any applicable law
now in effect or which may become effective during the term of this Agreement (including but not
limited to Social Security contributions and income tax withholdings). The Employee’s base salary
shall be reviewed annually by the President or his designee and may reasonably be increased or
decreased on the basis of individual and corporate performance in accordance with criteria and
standards established by the President or his designee.
3.2 Incentive Compensation; Bonuses. In addition to base salary, the Employee shall
be entitled to (i) participate in such incentive plans (including the right to defer income and
bonuses) made available by the Company to its executives and key employees and (ii) receive such
additional bonus or discretionary compensation payments as the President or his designee may
determine from time to time. The Employee’s eligibility for incentive plan participation and
additional bonus or discretionary compensation payments shall be reviewed annually by the President
or his designee and shall be awarded on the basis of corporate performance and in accordance with
criteria and standards established in the sole discretion of the President or his designee. The
target amount of the bonus shall be 40% of the Employee’s base salary at the end of the fiscal
period for which the bonus is calculated.
3.3 Expenses. During the Term, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred in connection with the performance of his duties
in accordance with the policies and procedures of the Company as may be in effect from time to
time.
3.4 Benefits. During the Term, the Employee shall be entitled to receive a package of
benefits that includes all of the programs, plans and perquisites currently provided by the Company
to its employees, for so long as such programs, plans and perquisites are continued by the Company
and are available to employees of the Company.
(a) If within ninety (90) days following the occurrence of a Change of Control of the Company
(as defined in Appendix A) the Employee elects to voluntarily terminate his employment with the
Company, the Employee shall be entitled to receive continuing payments of bi-weekly base salary (at
the rate in effect at the time notice of termination is given) for 12 months following the date on
which termination is effective.
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(b) Except as stated in (a) above, a Change of Control of the Company shall not affect the
terms of this Agreement.
10.1 During the course of his employment with the Company, the Employee has had and will have
access to and will gain knowledge with respect to all aspects of the business of the Company,
including financial information; business and marketing practices and procedures; information
concerning employees, customers, suppliers; and other valuable and proprietary information relating
to the business of Company (“Confidential Information”). The parties agree that certain covenants
by the Employee are essential to the growth and stability of the business of the Company. Among
these covenants are the Employee’s promises not to make unauthorized disclosures of the
Confidential Information nor to use the Confidential Information regardless of whether the
Employee’s employment with the Company has terminated. Accordingly, Employee agrees that, except
as required by his duties under this Agreement, he shall not use nor disclose to anyone at anytime
during or after the Term any Confidential Information obtained by him in the course of his
employment with the Company. The Employee agrees to enter into any further agreement regarding
confidentiality that the Company may request. The Employee shall use his best efforts to prevent
the removal of any Confidential Information from the premises of the Company, except as required in
his normal course of employment by the Company. The Employee shall use his best efforts to cause
all persons or entities to whom any Confidential Information shall be disclosed by him hereunder to
observe the terms and conditions set forth herein as though each such person or entity was bound
hereby.
10.2 Employee agrees to hold as the Company’s property all memoranda, books, papers, letters,
customer lists, processes, computer software, records, financial information, policy and procedure
manuals, training and recruiting procedures and other data, and all copies thereof and
therefrom in any way relating to the Company’s business and affairs, whether made by him or
otherwise coming into his possession, and on termination of his employment, or on demand of the
Company at any time, to deliver the same to the Company.
11.1 During the Term of this Agreement and for a period continuing for one (1) year after the
date of its termination, the Employee agrees that he shall not directly or indirectly, for his own
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account or as agent, employee, officer, director, trustee, consultant or shareholder of any
corporation or other entity [except for a two percent (2%) interest or less in any publicly traded
corporation or other entity] engage or attempt to engage anywhere in North America in any business
activity which is the same as, substantially similar to or directly competitive with the business
of the Company, or any subsidiary of the Company, as now or in the future conducted by the Company.
11.2 During the Term of this Agreement and for a period continuing for one (1) year after the
date of its termination, the Employee agrees that he shall not, directly or indirectly, for his own
account or as agent, employee, officer, director, trustee, consultant or shareholder of any
corporation or other entity [except for a two percent (2%) interest or less in any publicly traded
corporation or other entity] (i) employ or solicit the employment of any employee of the Company,
any employee of a subsidiary of the Company, or any former employee of the Company whose employment
with the Company terminated within the preceding six (6) months or (ii) induce or attempt to induce
any employee of the Company, or any employee of a subsidiary of the Company, to terminate his or
her employment with the Company or any subsidiary of the Company.
11.3 The Employee acknowledges and agrees that the foregoing territorial and time limitations
and restrictive covenants are reasonable and properly required for the adequate protection of the
business and affairs of the Company. In the event any such territorial or time limitation is found
to be unreasonable by a court of competent jurisdiction, the Employee agrees and submits to the
reduction of either said territorial or time limitation (or both) to such an area or period as the
court may determine to be reasonable.
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any legal proceeding arising as a result of a breach
or threatened breach of Section 10, 11 or 12 of this Agreement shall be borne by the losing party
to the fullest extent permitted by law and the losing party hereby agrees to indemnify and hold the
other party harmless from and against all such expenses.
17. Miscellaneous. This Agreement shall be governed by the internal domestic laws of
the Commonwealth of Pennsylvania without reference to conflict of laws principles. The Employee
consents to jurisdiction in Pennsylvania and venue in Erie County for purposes of all claims
arising under this Agreement. All headings and subheadings are for convenience only and are not of
substantive effect. This Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements, negotiations,
understandings and writings (or any part thereof) whether oral or written between the parties
hereto relating to the subject matter hereof, all of which are hereby terminated and canceled.
There are no oral agreements in connection with this Agreement. Neither this Agreement nor any
provision of this Agreement may be waived, modified or amended orally or by any course of conduct
but only by an agreement in writing duly executed by both of the parties hereto. If any section,
portion, subsection or subportion of this Agreement shall be determined to be unenforceable or
invalid, then such section, portion, subsection or subportion shall be modified in the letter and
spirit of this Agreement to the extent permitted by applicable law so as to be rendered valid and
any such determination shall not affect the remainder of this Agreement, which shall be and remain
binding and effective as against the parties hereto.
COMPANY:
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EMPLOYEE:
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RENT-WAY, INC. | |||||
By: | ||||||
Xxxxxxx X. Xxxxxxx Date
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Xxxxxxx X. Short, President | Date | ||||
Executive Vice President/ Chief Operating Officer |
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APPENDIX A
A “Change in Control of the Company” shall be deemed to have occurred if, as the result of a
single transaction or a series of transactions, the event set forth in either of the following
paragraphs shall have occurred:
(1) there is consummated a merger or consolidation of the Company with any other corporation
or entity, other than a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving
entity or any parent thereof) at least 60% of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof outstanding immediately after such merger or
consolidation as appropriate; or
(2) the stockholders of the Company approve a plan of liquidation or dissolution of the
Company or an agreement for the sale or disposition by the Company of all or substantially all of
the Company’s assets, other than a sale or disposition by the Company of all or substantially all
of the Company’s assets to an entity, at least 60% of the combined voting power of the voting
securities of which are owned by stockholders of the Company in substantially the same proportions
as their ownership of the Company immediately prior to such sale.
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