EXHIBIT 10.2
EMPLOYMENT AGREEMENT BETWEEN LEAF FINANCIAL
CORPORATION (FORMERLY KNOWN AS F.L. PARTNERSHIP
MANAGEMENT, INC.) AND CRIT XXXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of the _ day of
November, 2001 by and between F. L. PARTNERSHIP MANAGEMENT, INC., a Delaware
corporation (the "Company") and CRIT XXXXXX (the "Executive").
WHEREAS, Company is in the business of syndicating partnerships engaged in
equipment leasing and serving as the general partner and manager of those
partnerships ("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 Chairman of the Board and Chief
Executive Officer (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 Board of Directors.
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 acknowledges that Company's current location
is at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX.
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 oversight of the
Company Business, and such duties as the Company's Board of Directors may
assign to him from time to time and which are appropriate to the Office.
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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 Two
Hundred Fifty Thousand Dollars ($250,000) 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. Employee shall be entitled to receive: payment of
country club dues; a car of a make and model typical for executives in
Executive's position, cellular telephone, and payment of dues or membership
expenses in professional organizations.
(e) 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; (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 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; (v) the breach by Executive of Paragraph 12(a) of this Agreement if
such breach impacts the ability of Executive to fully perform his expected
duties hereunder; or (vi) Executive has failed to follow reasonable 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 ten business days after written notice to cure such failure. For
purposes of (ii) hereinabove, (a) 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; and
(b) 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;
(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
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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) the breach by the Company of Paragraph 12(b) of this
Agreement if such breach leads to the termination of this Agreement or to the
Company's failure to pay Executive the compensation and benefits to which he
is entitled under this Agreement for a period in excess of forty-five (45)
days; (v) any failure by the Company to comply with Paragraph 18(c) of this
Agreement; or (vi) 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.;
(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.
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(h) Termination at the end of the Contract Period by reason of non-
renewal. The giving as 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 10 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 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
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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.
8. RIGHT TO PURCHASE SECURITIES OF COMPANY UPON TERMINATION.
If this Agreement is terminated pursuant to Paragraphs 6(b) or 6(g)
hereof during the original three-year Contract period, then the Company shall
have the right, for a period of one hundred eighty (180) days after such
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termination, to purchase from Executive (or any entity controlled by him) any or
all securities of the Company owned by Executive (or any entity controlled by
him) at a price equal to the amount paid by Executive (or such entity) for such
securities, such amount to be paid within thirty (30) days after such notice.
9. 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 9 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
9.
10. COVENANT NOT TO COMPETE.
Executive shall not, daring the period of employment and for the greater
of (i) twelve months, or (ii) a period equal to the balance of the Contract
Period 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) engage in either aspect of 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 10 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.
11. 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 9 and 10 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.
12. 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
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Company to engage in leasing transactions of any kind with any person or to
manage the leasing business of any person. Executive agrees to indemnify and
hold harmless the Company from any costs, fees, expenses, judgments or
settlements arising from any person's claim or threatened claim that the
Executive is not free to enter into this Agreement or perform the services
required 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.
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. Company agrees to indemnify and hold harmless the Executive from any
costs, fees, expenses, judgments or settlements arising from any person's
claim or threatened claim that the Company is not free to enter into this
Agreement.
13. 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.
14. 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.
15. MODIFICATION OF AGREEMENT.
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.
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16. 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.
17. 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.
18. ASSIGNMENT.
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, and the Company may assign this
Agreement to any company engaged in equipment leasing or providing services to
a company engaged in equipment leasing in which Resource America, Inc., the
current ultimate parent of the Company, has an interest. Executive
acknowledges and agrees that, if this Agreement is assigned pursuant to the
previous sentence, he will also, if requested by any affiliate of Resource
America, Inc. engaged in equipment leasing or providing services to a company
engaged in equipment leasing, perform the reasonable duties of a non-employee
Chairman of the Board of any such affiliate.
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.
19. 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:
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IF TO COMPANY:
F.L. Partnership Management, Inc.
0000 Xxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxxxxx, 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:
Crit XxXxxx
Xxx Xxxxxxxxx Xx
Xxxx Xxxxxxx XX 00000
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement as of the date first written above.
F.L. PARTNERSHIP MANAGEMENT, INC.
By: Graphic Omitted
______________________________________________________________________
EXECUTIVE
/s/ CRIT XXXXXX
______________________________________________________________________
Crit XxXxxx
