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Exhibit 10.1
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AGREEMENT is entered into effective as of June 30, 1999 between
Xxxxxx X. Virgin ("Employee") and T & W FINANCIAL SERVICES COMPANY L.L.C., a
Washington limited liability company ("T&W").
In consideration of the mutual covenants herein contained, the parties
agree as follows:
1. Employment.
Subject to the terms and conditions of this Agreement, T&W agrees to
appoint and employ Employee as the Senior Vice President and Chief Financial
Officer. Employee accepts employment effective as of the effective date of this
Agreement upon the following terms and conditions.
2. Term of Employment.
Employment under this Agreement shall be for a period of two (2) years
commencing on the effective date of this Agreement and terminating on the
earlier to occur of the following:
(a) June 30, 2001;
(b) Employee's death;
(c) at the option of T&W upon thirty (30) days prior written notice
to Employee in the event of the inability of Employee to perform
his duties hereunder by reason of injury or illness
incapacitating Employee for a continuous period exceeding one
hundred twenty (120) days; or
(d) upon the termination of Employee's employment by T&W for cause
in accordance with Section 9.1.
(e) upon the termination of Employee's employment by Employee
without cause in accordance with Section 9.2.
(f) upon the termination of Employee's employment by Employee for
cause in accordance with Section 9.3.
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At the expiration date, this Agreement may be renewed by mutual
agreement of the parties.
2.2 T&W's Personnel Policies. T&W has implemented and adopted a
Policy and Procedure Manual which contains general policies regarding dress and
grooming, attendance and work rules and regulations. Employee acknowledges that
he has received a copy of T&W's Policy and Procedure Manual and agrees to follow
all rules therein pertaining to Employee's employment at T&W. However, the
Policy and Procedure Manual may be modified by T&W at any time without notice
and anything contained in the manual, or any modification to the manual, shall
not constitute a modification of this agreement. In the event of a conflict
between this Agreement and the Policy and Procedure Manual, this Agreement
controls.
3. Duties and Extent of Services.
3.1 Employee's principal duties on behalf of T&W at the effective
date of this Agreement shall be to perform the normal and usual duties of a
chief financial officer, and such other duties and responsibilities as assigned
to Employee by T&W from time to time.
3.2 Employee will devote substantially his entire time and attention
to the business of T&W, and shall not, during such employment, engage in any
other business activity which interferes with Employee's duties and
responsibilities under this Agreement. Employee shall not directly or indirectly
engage or participate in any activities at any time during the term of this
Agreement in conflict with the best interest of T&W.
4. Compensation.
In addition to other benefits referred to herein, T&W shall pay
Employee for all services rendered by Employee under this Agreement an annual
salary of $150,000 per year. Employee's salary shall be paid in semi-monthly
installments on the 15th and last day of each month, commencing on July 31,
1999, and shall be subject to normal payroll withholding. Unless changed by
agreement of the parties, the annual salary to Employee shall remain the same as
provided herein. Employee's annual salary shall be subject to annual review.
5. Additional Benefits.
Corporation agrees at all times during Employee's employment to provide
and maintain for Employee, and Employee shall be entitled to participate in, all
fringe benefits in effect which are available for salaried employees of the
Corporation or as introduced by Corporation during Employee's employment. To the
extent that it has the right to do so with its other salaried employees,
Corporation reserves the right to modify, suspend or discontinue any or all of
such benefits at any time. In addition to the compensation provided in Section
4, Employee shall have the following additional benefits during the term herein:
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5.1 Bonus. In addition to the salary described above, Employee shall
participate in the Senior Management bonus program and shall be entitled to
receive an annual bonus based on Return on Average Assets and annual stock
appreciation of T & W Financial Corporation, with a minimum quarterly bonus of
$12,500.00. The annual bonus as provided herein shall be paid in quarterly
installments paid in quarterly installments 60 days after the end of the 1st,
2nd and 3rd quarter and 75 days after the end of the 4th quarter during the term
of this Agreement; provided, however, any adjustment to the annual audit that
has an impact on the above calculation which was the basis of the quarterly
installment payment on the bonus will be made in the first quarter of the
following year. At the election of Employee, up to fifty percent (50%) of the
annual bonus can be taken in current stock options at a four (4) options to one
dollar ($1.00) ratio.
5.2 Expenses. T&W will reimburse Employee for or pay for Employee
all reasonable and necessary business related expenses incurred by him in
carrying out his duties and responsibilities under this Agreement and expenses
in maintaining license as a Certified Public Accountant. The Employee shall
present to T&W from time to time an itemized account of such expenses in such
form as may be required by T&W.
6. Noncompetition/Nondisclosure.
As a condition of employment with T&W, and in consideration of
continuing employment, the compensation of Employee by T&W during the term of
this Agreement, the use and enjoyment by Employee of T&W's facilities and
equipment, the ongoing disclosure to Employee of T&W's confidential and
proprietary information, the opportunity for Employee to serve T&W's customers,
and the mutual covenants contained herein, T&W and Employee recognize and agree
as follows:
(a) Confidential Information. Employee recognizes and
acknowledges that during the course of his employment hereunder, he will have
access to certain information not generally known to the public, relating to
products, sales, services or business of T&W, which may include without
limitation data, programs, customer or contact lists, contact with T&W's
customers, acquisition of information as to the nature and character of the
business and the names and requirements of the customers, prospects or
projections, techniques, processes, research , work in process, intellectual
property, including but not limited to any patents, trademarks, service marks,
copyrights, ideas, creations, and properties invented, created, written,
developed, furnished, produced, or disclosed by Employee, in the course of
rendering services to T&W except for items in the public domain or items
obtained by Employee from third parties not affiliated with T&W (collectively
the "Confidential Information").
(b) Possession. Employee agrees that upon request by T&W,
and in any event upon termination of employment, except for items in the public
domain or items obtained by Employee from third parties not affiliated with T&W,
Employee shall turn over to T&W all
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documents, notes, papers, data, files, customer lists, office supplies or other
materials or work product in Employee's possession or under his control which
were created pursuant to, or connected with or derived from Employee's services
to T&W, or which are related in any manner to T&W's business activities, whether
or not such materials are at the date of this Agreement in Employee's
possession.
(c) Non-Disclosure of Confidential Information. Employee
agrees that for and during the entire time he is employed by T&W, any
Confidential Information shall be considered and kept as private and privileged
records of T&W and will not be divulged to any person or entity. Further, upon
termination of this Agreement for any reason, Employee agrees that he will
continue to treat as private and privileged any Confidential Information and
will not release any such Confidential Information to any person or entity,
either by statement, deposition, or as a witness, except upon the issuance of a
proper subpoena from a court of competent jurisdiction, and T&W shall be
entitled to an injunction by any competent court to enjoin and restrain the
unauthorized disclosure of such information. Employee hereby agrees to notify
T&W of any request for such information, whether by subpoena or otherwise.
(d) Covenant Not to Divulge Confidential Information.
Employee further recognizes and acknowledges that because the goodwill of T&W's
business is a valuable asset, and because the solicitation of T&W's customers by
Employee after Employee has ceased to be employed by or associated with T&W will
cause irreparable harm to the goodwill of T&W, T&W would not offer employment to
Employee unless Employee assures that such solicitation would not occur.
Employee therefore agrees and covenants that during Employee's employment by T&W
and for a period of thirty-six (36) months after termination of such employment
for any reason, Employee shall not disclose any Confidential Information about
the business of T&W as presently conducted, or as it may evolve in the ordinary
course of business between the date of this Agreement and the expiration of this
covenant.
(e) Non-Competition Agreement. Employee hereby agrees that,
during the term of employment with T&W and at all times thereafter, Employee
shall not, directly or indirectly, provide any competitor or potential
competitor of T&W doing or planning to do business in the same business as T&W
with any information relating in any way to T&W's Confidential Information.
During the term of this Agreement, Employee agrees that he shall not, whether as
an employee, agent, proprietor, partner, officer, director, member, shareholder,
independent contractor, or in any other capacity whatsoever, and in any fashion
in which he is beneficially interested, render any services or engage in any
activities in the United States and Canada in the business of equipment leasing
and related financial services that are in
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direct competition with T&W, or any of its affiliated companies. For a period of
thirty six (36) months after Employee leaves T&W's employment, Employee agrees
that he shall not, whether as an employee, agent, proprietor, partner, officer,
director, member, shareholder, independent contractor, or in any other capacity
whatsoever, and in any fashion in which he is beneficially interested, engage in
the business of equipment leasing and related financial services that are in
direct competition with T&W, or any of its affiliated companies. The period of
time during which Employee is prohibited from engaging in certain activities
pursuant to the terms of this section shall be extended by the length of time
during which Employee is in breach of the terms of this section. However, the
noncompetition provisions of this agreement shall not be applicable if this
agreement is terminated by Employee for cause in accordance with section 9.2 or
if T&W elects not to renew the agreement prior to any automatic renewal period
as provided in section 2.
(f) Because of the difficulty in determining the magnitude
of damages or potential damages to T&W in the event of solicitation of an
existing customer of T&W, or competition in violation of this Agreement,
Employee will pay to T&W liquidated damages equal to the net income Employee
derives in noncompliance with this noncompetition provision. Such liquidated
damages shall be due immediately upon the rendering of the prohibited activity
or services and shall bear interest at the rate of twelve percent (12%) per
annum thereafter.
7. Reasonableness of Restrictions.
7.1 T&W and Employee agree and stipulate that the agreements and
covenants contained in this Agreement, including the covenant not to divulge
Confidential Information, is fair and reasonable for the protection of T&W's
Confidential Information, goodwill and other protectable interests, in light of
all the facts and circumstances of the relationship between Employee and T&W. In
the event a court of competent jurisdiction should decline to enforce any
provision of this Agreement, such provision shall be deemed to be modified or
eliminated as required by the court's order, but all remaining provisions shall
remain in full force and effect.
7.2 Employee further acknowledges, agrees and stipulates that, in
the event of the termination of employment with T&W, Employee's experience and
capabilities are such that Employee can obtain employment in business activities
which are of a different and non-competing nature with his activities as an
employee of T&W, and that the enforcement of a remedy hereunder by way of
injunction shall not prevent Employee from earning a reasonable livelihood.
8. Injunctive Relief.
Employee acknowledges that disclosure of any Confidential Information or
breach or threatened breach of any of the covenants or other agreements
contained herein would give rise to irreparable injury to T&W or customers of
T&W, which injury would be inadequately compensable in monetary damages.
Accordingly, T&W may seek and obtain injunctive relief from the breach or
threatened breach of any provision, requirement, or covenant of this Agreement,
in addition to and not in limitation of any other legal remedies which may be
available. Employee further acknowledges, agrees and stipulates that the
covenants and agreements contained herein are necessary for the protection of
T&W's legitimate business
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interests and are reasonable in scope and content. Any breach by Employee of
this Agreement (specifically including the covenant not to compete) may cause
irreparable injury to T&W. Upon breach or threatened breach, T&W may obtain
temporary restraining orders, injunctions, or other equitable relief from a
court in addition to, and not in lieu of, damages and any other available
remedy.
9. Termination.
9.1 Termination by T&W for Cause. Without limiting in any way other
provisions of this Agreement, Employee may be terminated for cause upon ten (10)
days' prior written notice. In such event, Employee shall be entitled to
compensation only to the date of such termination. For purposes of this
Agreement, cause is defined as:
(a) Conviction of Employee for any crime involving moral
turpitude, or the charging of Employee with any felony involving moral turpitude
which results in a suspended sentence or deferred prosecution;
(b) Fraud, embezzlement, theft, destruction or conversion of
T&W's property;
(c) Employee's sexual, gender or other forms of harassment
of T&W's employees;
(d) Engaging in competition with T&W during the period of
Employee's employment with T&W;
(e) Material breach of this Agreement by Employee;
(f) Divulging T&W trade secrets or other breach of
confidentiality; or
(g) Gross negligence by Employee in the performance of his
duties.
In the event T&W terminates Employee's employment for cause as provided
for in this Section 9.1, and Employee disagrees with the T&W's determination
that just cause for termination exists, then the Employee and T&W agree to seek
a fair and prompt negotiated resolution. However, if this is not successful, the
dispute shall be resolved by binding arbitration in accordance with arbitration
procedures agreed to by Employee and T&W or, if they are unable to agree, by a
court of competent jurisdiction.
9.2 Termination Without Cause by T&W. T&W, in its discretion and for
any reason, may terminate this agreement at any time by delivering thirty (30)
days prior written notice to Employee prior to such intended termination
("Termination Date"). This agreement shall terminate on the Termination Date
and, except as provided in this Section 9.2, the parties shall
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have no further duties or obligations to each other. T&W shall pay to Employee
all amounts that may have accrued under Section 4 and Section 5.1 through the
date of termination but not previously paid to Employee, and T&W shall also pay
an amount equal to six (6) months of the base compensation as provided under
Section 4 for the calendar year in which employment terminated based on results
for the entire year, but prorated for the partial year prior to the Termination
Date.
9.3 Termination by Employee With Cause. In the event that T&W
defaults in any of its obligations to Employee under this Employment and
Noncompetition Agreement, and T&W fails to cure such default within ten (10)
days after receiving written notice thereof, Employee may terminate his
employment and seek any relief which may be available to Employee at law or in
equity, including damages and/or injunctive relief as a result of such breach
with it being specifically understood and agreed that Employee shall be relieved
from the non-competition provisions hereof.
10. Indemnification. T&W shall indemnify Employee, hold Employee
harmless, and defend Employee to the fullest extent permitted by applicable law
from and against all claims, threats, suits (whether instituted by T&W or any
other person or entity), damages, penalties, liabilities, costs and expenses
including, without limitation, legal fees, costs and disbursements (all
collectively referred to as "liabilities") incurred, suffered, or expended by or
threatened against Employee with respect to any action or inaction in the course
or performance of Employee's duties under this Agreement except for liabilities
arising out of the gross negligence or willful misconduct of Employee. This
indemnification shall continue in effect after the expiration or termination of
this Agreement and shall not be deemed exclusive of any other indemnification
right to which Employee may be entitled under applicable law, agreement or the
vote of T&W's Board of Directors.
11. Miscellaneous.
11.1 Assignment. This Agreement shall not be assignable by Employee.
11.2 Amendment and/or Modification. Neither this Agreement nor any
term or provision hereof, may be changed, waived, discharged, amended, modified
or terminated orally, or in any manner other than by an instrument in writing
signed by the parties hereto.
11.3 Binding Effect. Subject to the restrictions on assignment
described above, this Agreement shall be binding upon and inure to the benefit
of the respective parties, their successors and assigns and Employee's heirs and
personal representative.
11.4 Section Headings. The section headings are for convenience only
and in no way define, limit, extend or interpret the scope of this Agreement or
of any particular paragraph hereof.
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11.5 Interpretation and Fair Construction of Contract. This Agreement
has been reviewed and approved by each of the parties. Both T&W and Employee
have received independent legal advice in connection with the negotiation,
execution and performance of their respective obligations under this Agreement.
In the event a court of competent jurisdiction determines that any provision of
this Agreement is ambiguous, the language in all parts of this Agreement shall
be construed as a whole according to its fair meaning and not strictly construed
for nor against either party.
11.6 Validity. If any term of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, illegal, or unenforceable, in
whole or in part, the validity of any of the other terms of this Agreement shall
not, in any way, be affected thereby.
11.7 Variations in Pronouns. All pronouns include the masculine,
feminine, neuter, singular and plural as the identification of persons, places
or entities and the context may require.
11.8 Waiver or Breach. Either party's failure to insist upon strict
performance of any of the covenants and agreements herein contained, or to
exercise any option or right herein conferred, in any one or more instances,
shall not be construed to be a waiver or relinquishment of any such option or
right, or of any other covenants or agreements, but the same shall be and remain
in full force and effect.
11.9 Notices. To be effective, any notice hereunder shall be in
writing, delivered in person or mailed by certified or registered mail, postage
prepaid, to the appropriate party or parties at such other address as the
parties may hereinafter designate from time to time.
11.10 Entire Agreement. This Agreement contains the entire agreement
and understanding of the parties with respect to the entire subject matter
hereof, and there are no representations, inducements, promises or agreements,
oral or otherwise, not embodied herein. Any and all prior discussions,
negotiations, commitments and understandings relating to the subject matter
hereof are merged herein. There are no conditions precedent to the effectiveness
of this Agreement other than as stated herein, and there are no related
collateral agreement existing between the parties that are not referenced
herein.
11.11 Governing Law. This Agreement shall be governed by, construed
and enforced in
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accordance with the laws of the State of Washington. Venue of any dispute
involving the interpretation or enforcement of this Agreement shall be in Xxxxxx
County, Washington.
EMPLOYEE: T & W:
T & W Financial Services Company L.L.C.
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Xxxxxx X. Virgin By T & W Financial Corporation,
its manager,
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Xxxxxx X. Xxxxx, President
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