EMPLOYMENT AGREEMENT
Agreement made as of this 15th Day of June, 1999, by and
between American Business Financial Services, Inc., a Delaware corporation (the
"Company"), and Xxxxxx Xxxxxxx, an individual (the "Executive").
BACKGROUND
The Company hereby offers employment to the Executive and the
Executive hereby accepts employment pursuant to the terms and conditions
contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the parties agree as
follows:
1. Duties.
During the Term (as hereinafter defined), the Executive shall be the
Chairman of the Company's Consumer Mortgage Group, shall have such executive
duties as are reasonably determined from time to time by the Company's Chairman
and shall be entitled to the powers and authority normally incident to the
office of Chairman of the Company's Consumer Mortgage Group. The Executive shall
devote his full time and attention to the business of the Company and use his
best efforts to promote the interests of the Company.
2. Term.
(a) This Agreement shall continue for a period beginning on the date
hereof and ending on the earliest of the following dates (the "Term"): (i) the
date the Executive dies or becomes permanently disabled (as hereinafter
defined); (ii) the date of termination of the Executive's employment with the
Company for cause (as hereinafter defined); (iii) the date of the voluntary
termination by the Executive of the Executive's employment with the Company by
resignation; (iv) the date the Executive reaches 70 years of age; or (v) upon
notice of the Company that it wishes to terminate the Agreement without cause,
in which case the Company will pay Executive severance in the amount of his
minimum base annual salary at the time of the termination, such payment to be
paid twice monthly over the course of one year.
(b) For purposes of this Agreement the Executive shall be deemed to
be disabled if he is unable, even with reasonable accomodation, to perform the
essential functions of his position for a period in excess of ten (10) weeks;
(c) For purposes of this Agreement, the term "Cause" shall mean
Executive, in the reasonable judgment of the Company (i) materially breached any
of the duties or obligations under this Agreement (ii) embezzled or converted to
his own use any funds of the Company or any client or customer of the Company,
(iii) converted to his own use or unreasonably destroyed any property of the
Company, without the Company's prior written consent, (iv) is convicted of a
felony or is indicted for a crime involving moral turpitude, (v) is adjudicated
an incompetent, (vi) is habitually intoxicated or is diagnosed by an independent
medical doctor to be addicted to a controlled substance or any non-prescription
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drug whatsoever, or (vii) comitted an act which is materially detrimental to the
Company.
(d) The Executive hereby agrees not to voluntarily resign or
terminate his employment with the Company for two years from the date of this
Agreement.
3. Compensation. During the Term, the Executive shall be entitled to a
minimum base annual salary of not less than $335,000. Executive is also entitled
to participate in the Company's cash bonus Plan, in which up to 50% of the
annual base salary may be awarded based on the performance and achievement of
specific goals set forth by the Chairman of the Company. The minimum base annual
salary of the Executive, shall be reviewed annually, and may be adjusted from
time to time by the Chairman of the Company during the Term. The Executive shall
also be entitled to such stock options and other incentive payments as are
determined from time to time by the Company's Board of Directors. The Company
shall withhold from any benefits payable under this Agreement all federal,
state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
4. Other Benefits. During the Term (excluding any severance payment
period), in addition to the compensation set forth in Section 3 hereof, the
Executive shall be entitled, at a minimum, to the following benefits from the
Company:
(i) medical, hospital, life and disability insurance for
Exeucitve which are no less than the amount of these
benefits received by the other members of the Company's
executive team; and
(ii) car allowance of $600.00 per month;
(iii) vacation allowance of four (4) weeks per year; such
vacation to be earned as set forth in the Company's
Employee Handbook; and
(iv) reimbursement for all reasonable expenses incurred by the
Executive in the performance of his duties under this
Agreement.
5. Confidentiality.
(a) The Executive covenants and agrees, so long as the Company
complies with its obligations hereunder, he will not, during the Term or at any
time thereafter, except with the express prior written consent of the Company or
pursuant to the lawful order of any judicial or administrative agency of
government, directly or indirectly, disclose, communicate or divulge to any
person, or use for the benefit of any person, any knowledge or information with
respect to the conduct or details of the Company's business which he, acting
reasonably, believes or should believe to be of a confidential nature and the
disclosure of which is not in the Company's interest.
(b) The Executive covenants and agrees that, so long as the Company
complies with its obligations hereunder, he will not, during the Term, directly
or indirectly, whether as employee, owner, partner, consultant, agent, director,
officer, shareholder or in any other capacity, engage in or assist any person to
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engage in any act or action which he, acting reasonably, believes or should
believe would be harmful or inimical to the interests of the Company, including
the hiring or soliciting of any of the Company's employees.
(c) In the event Executive's employment is terminated without cause
and he receives a cash payment as provided in Section 2(a)(v), the period of the
covenants set forth in Section 5(b) shall be extended for one year, it being
experessly understood and agreed that the application and extension of the
covenants set forth in Section 5(b) pursuant to this paragraph are not intended
to preclude nor shall preclude any employment by Executive subsequent to the
Term of this Agreement.
(d) The parties agree that any breach by the Executive of any of the
covenants or agreements contained in this Section 5 will result in irreparable
injury to the Company for which money damages could not adequately compensate
the Company and therefore, in the event of any such breach, the Company shall be
entitled (in addition to any other rights and remedies which it may have at law
or in equity) to have an injunction issued by any competent court enjoining and
restraining the Executive and/or any other person involved therein from
continuing such breach. The existence of any claim or cause of action which the
Executive may have against the Company or any other person (other than a claim
for the Company's breach of this Agreement) shall not constitute a defense or
bar to the enforcement of such covenants.
(e) If any portion of the covenants or agreements contained in this
Section 5, or the application hereof, is construed to be invalid or
unenforceable, the other portions of such covenants(s) or agreements(s) or the
application thereof shall not be affected and shall be given full foce and
effect without regard to the invalid or unenforceable portions to the fullest
extent possible.
(f) For purposes of this Section 5, the term "the Company" shall
include the Company, any successor to the Company under Section 6 hereof, and
all present and future direct and indirect subsidiaries and affiliates of the
Company.
6. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Company which will
acquire, directly or indirectly, by merger, consolidation, purchase, or
otherewise, all or substantially all of the assets of the Company, and shall
otherwise inure to the benefit of and be binding upon the parties hereto and
their respective heirs, executors, adminstrators, successors and assigns.
Nothing in the Agreement shall preclude the Company from consolidating or
merging into or with or transferring all or substantially all of its assets to
another person. In that event, such other person shall assume this Agreement and
all obligations of the Company hereunder. Upon such a consolidation, merger, or
transfer of assets and assumption, the term "the Company" as used herein, shall
mean such other person and this Agreement shall continue in full force and
effect.
7. (a) Nonassignability. Neither this Agreement or any right or
interest hereunder shall be assignable by the Executive or his legal
representatives without the Company's prior written consent.
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(b) Attachment. Except as required by law, the right to receive
payments under this Agreement shall not be subject to anticipation, sale,
encumbrance, charge, levy, or similar process or assignment by operation of law.
8. Waiver Not to be Continued. Any waiver by a party of any breach of
this Agreement by another party shall not be construed as a continuing waiver or
as a consent to any subsequent breach by the other party.
9. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice:
A. If to the Executive, to:
Xxxxxx Xxxxxxx
0000 Xxxxxxx xxxx
Xxxxxx, XX 00000
B. If to the Company, to:
American Business Financial Services, Inc.
BalaPointe Office Centre
000 Xxxxxxxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
With a copy to: Xxxxx Xxxxx, Esquire
Blank Rome Comisky & XxXxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.
10. Jurisdiction. Company and the Executive consent to the exclusive
jurisdiction of the courts of the Commonwealth of Pennsylvania and the United
States District Court for the Eastern District of Pennsylvania.
11. General Provisions.
(a) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes and replaces
all prior agreements between the parties. No amendment, supplement, waiver or
termination of any of the provisions hereof shall be effective unless in writing
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and signed by the party against whom it is sought to be enforced. Any written
amendment, supplement, waiver or termination hereof executed by the Company and
the Executive shall be binding upon them and upon all other persons, without the
necessity of securing the consent of any other person and no person shall be
deemed to be a third party beneficiary under this Agreement.
(b) The term "person" as used in this Agreement means a natural
person, joint venture, corporation, sole proprietorship, trust, estate,
partnership, cooperative, association, non-profit organization or any other
legally cognizable entity.
(c) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same Agreement.
(d) No failure on the part of any party hereto to exercise and no
delay in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other rights, power or remedy.
(e) The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
modify any of the terms or provisions hereof.
(f) This Agreement shall be governed and construed and the legal
relationships of the parties determined in accordance with the laws of the
Commonwealth of Pennsylvania applicable to contracts executed and to be
performed solely in the Commonwealth of Pennsylvania.
AMERICAN BUSINESS FINANCIAL SERVICES, INC.
(Corporate Seal) By:_______________________________________
Attest:___________________________________
XXXXXX XXXXXXX
__________________________________________
Witness:_____________________
