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EXHIBIT 10
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AGREEMENT is entered into effective as of January 1, 1998 between
XXXXX X. XXXXXX ("Employee") and T & W FINANCIAL SERVICES COMPANY L.L.C., a
Washington limited liability company ("T&W").
In consideration of the mutual convenants 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 its Senior Vice-President of Operations.
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 five (5) years
commencing on the effective date of this Agreement and terminating on the
earlier to occur of the following:
(a) January 1, 2003;
(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 for cause
in accordance with Section 9.2.
At the expiration of the initial term of this Agreement, this Agreement
shall be automatically renewed for two (2) succeeding terms of three (3) years
and two (2) years each, respectively, unless either party shall, at least sixty
(60) days prior to the expiration of the initial term, or any extended term,
give written notice of that party's intention not to renew this Agreement.
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
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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 Employees' 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 such services on behalf of T&W as the Board
of Directors shall reasonably determine.
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
$200,000 per year. Employee's salary shall be paid in semi-monthly installments
on the 15th and last day of each month, commencing in January of 1998 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 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:
5.1 QUARTERLY BONUS. Employee shall receive a Return on Equity (XXX)
incentive bonus on a targeted after tax XXX of twenty percent (20%). The bonus
will be 20 basis points (i.e., .20%) for each on percent Return on Equity above
twenty percent (20%). The operation of the XXX Program is illustrated on the
attached Exhibit "A." The annual bonus as provided herein
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shall be paid in quarterly installments on May 30, August 30, November 30, and
February 30 of each year during the term of this agreement; provided, however,
any adjustment due 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.
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. 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.
5.3 VACATION. Beginning January 1, 1998, Employee shall be entitled to
two (2) weeks paid vacation during each calendar year throughout the term of
this Agreement. Such vacation time shall be non-cumulative; that is, any unused
vacation time shall not carryover to the following calendar year. (See Policy
and Procedures Manual for additional vacation after five (5) years).
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 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 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 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
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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 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
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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 interest, 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 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.
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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 or conversion of T&W's property;
(c) Employee's sexual 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; or
(f) Divulging T&W's trade secrets or other breach of confidentiality.
In the event T&W terminates Employee's employment for cause as provided
for in this Section 9, 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 by Employee With Cause. In the event the 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 the Employee shall be relieved from
the non-competition provisions hereof.
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9.3 Termination Without Cause. If T&W discharges Employee for any
reason other than as set forth in 9.1, T&W shall pay Employee a sum equal to
Employee's salary and bonus for the calendar year in which such employment
terminates based on results for the entire year, but prorated for the partial
year prior to the date of termination.
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.
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.
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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 accordance with the laws of the State of Washington, regardless of
the fact that Employee is now a resident of a different state. Venue of any
dispute involving the interpretation or enforcement of this Agreement shall be
in Xxxxxx County, Washington.
EMPLOYEE: T & W:
/s/ XXXXX X. XXXXXX T & W Financial Services Company L.L.C.
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Xxxxx X. Xxxxxx By T & W Financial Corporation, its manager,
/s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, President
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