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Exhibit 10.04
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into
effective as of January 24, 1998, by and between U.S. Leasing, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxx (the "Consultant").
WHEREAS, the Company desires that the Consultant provide certain
consulting services to the Company consistent with the duties and
responsibilities that would be assigned to an Executive Vice President --
Structured Finance, on the terms and conditions contained in this Agreement, and
the Consultant wishes to provide such consulting services on the terms and
conditions contained in this Agreement; and
WHEREAS, the Company and the Consultant have agreed that, upon the
terms and conditions contained in this Agreement, the Consultant will not
compete with the Company during the term of this Agreement and for a period of
two (2) years after the end of the Consulting Term (as defined below), subject
to reduction in certain circumstances;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Consultant, each intending to be
legally bound hereby, agree as follows:
1. RETENTION OF CONSULTANT. Subject to the terms and conditions of this
Agreement, the Company hereby retains the Consultant to perform consulting
services in accordance with Section 4 hereof, and the Consultant hereby agrees
to render such services.
2. TERM. Unless otherwise terminated in accordance with Section 14
hereof, the Consultant shall perform the duties and services specified herein
for a period commencing on the date hereof (the "Effective Date") and ending on
the earlier of (i) April 1, 2000 or (ii) the commencement date of Consultant's
employment with the Company pursuant to an employment agreement substantially in
the form attached hereto as Exhibit A (the "Employment Agreement"). The period
during which the Consultant is obligated to perform such duties and services, as
the same may be reduced by termination pursuant to Section 14 hereof, is
referred to herein as the "Consulting Term."
3. EMPLOYMENT AGREEMENT. It is understood by the Consultant that the
Company is preparing to undertake an initial public offering of its common stock
(the "IPO"). If the IPO is consummated, then effective upon such consummation
the Company and Consultant shall enter into the Employment Agreement and this
Consulting Agreement shall immediately thereupon terminate in accordance with
Section 2 hereof.
4. CONSULTING SERVICES. During the Consulting Term, the Consultant
shall perform such consulting services consistent with the duties and
responsibilities that would be assigned to an
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Executive Vice President -- Structured Finance with respect to the business and
operations of the Company, and such other services as may be requested of him
from time to time by the Chief Executive Officer or Chief Operating Officer of
the Company. All of the consulting services rendered by the Consultant to the
Company in accordance with the terms of this Agreement are referred to herein as
"Services."
5. COMPENSATION. (a) As consideration for the Consultant's provision of
Services hereunder, the Company shall pay the Consultant a fee (the""Fee") of
$20,833.33 each month. The Fee shall be paid in installments consistent with the
Company's normal payroll schedule, commencing on either the first or fifteenth
day of the month, as the case may be, following the earlier of the dates
referred to in the immediately preceding sentence.
(b) The Company agrees to reimburse the Consultant for all
reasonable business expenses incurred by the Consultant in rendering Services
hereunder (including, without limitation, reasonable travel and entertainment
expenses), subject to the Company's reimbursement policies in effect from time
to time. The Consultant agrees to maintain records of his business expenses in
such form and detail as the Company may reasonably request and to make such
records available to the Company as and when requested.
(c) To the extent that, and for a duration not to exceed the period
in which, the Company does not provide welfare benefit plans of a general type
similar to those maintained by the Consultant's immediately prior employer in
which the Consultant is entitled to participate on a post-termination basis
under COBRA, the Company shall reimburse the Consultant for the Consultant's
COBRA contribution payment costs in connection with the Consultant's
post-termination participation in such prior employer's welfare benefit plans.
6. AGREEMENT NOT TO COMPETE.
6.1 As used in this Agreement, "Competing Business" shall mean any
business or enterprise which is engaged in (a) the equipment leasing business,
or (b) any business, business segment or product line engaged in by the Company
on the date of termination of the Consulting Term (clauses (a) and (b)
collectively referred to herein as the "Company's Business").
6.2 The Consultant agrees that, during the Consulting Term and for
two years thereafter (but subject to the provisos contained in this Section 6.2
below and subject to Section 14(c)(i) hereof), he will not, without the prior
written consent of the Company, either directly or indirectly, on his own behalf
or in the service of or on behalf of others as a shareholder, director, officer,
trustee, consultant, independent contractor or employee, engage in, or be
employed by, or provide services to, any Competing Business within the State of
Florida or in any other state in which the Company or any subsidiary or
affiliate thereof is engaged in business or in which of any of their respective
products or services are marketed or sold at the time of such termination.
Notwithstanding the foregoing:
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(a) employment with an investment banking or financial advisory
firm or boutique (or the investment banking or financial advisory division of a
commercial bank) in a position analogous to, or providing services analogous to,
the position in which the Consultant was employed with, or those services
provided by the Consultant at, Xxxxxx Xxxxxxx & Co. Incorporated prior to the
commencement of the Consulting Term shall not violate the covenant contained in
this Section 6.2, so long as the Consultant does not advise or provide other
services in respect of the consolidation of leasing companies; and
(b) so long as the Consultant has not violated any covenant
contained in Article 7, 8 or 9 hereof, the duration of the covenant contained in
this Section 6.2 shall be nine months; provided, however, that in the event of
any violation of any covenant contained in Article 7, 8 or 9 hereof prior to the
expiration of such covenants in accordance with their terms, the nine-month
duration provided for in this Section 6.2(b) shall be null and void and of no
further force and effect, and the two year duration shall again apply; and
(c) the foregoing covenants shall not be deemed to prohibit the
Consultant from acquiring as an investment not more than five percent of the
capital stock of a Competing Business whose stock is traded on a national
securities exchange or through the automated quotation system of a registered
securities association.;
(d) if an Employment Agreement is entered into, then the
duration of the restriction contained in this Section 6.2 following the end of
the Consulting Term shall be solely in accordance with the terms of Section 6.2
of such Employment Agreement; and
(e) if the Consulting Term is terminated by the Company and not
by the Consultant, then the covenants contained in this Section 6.2 shall be
null and void and of no further force and effect.
7. AGREEMENT NOT TO SOLICIT OR SELL TO CUSTOMERS. The Consultant agrees
that, during the Consulting Term and for two years thereafter (but subject to
the provisos contained in this Section 7 below and subject to Section 14(c)(i)
hereof), he will not, without the prior written consent of the Company, either
directly or indirectly, call on, solicit, take away, accept as a client,
customer or prospective client, customer or attempt to call on, solicit, take
away or accept as a client, customer or prospective client or customer, any
person that was a client, customer or prospective client or customer of the
Company or any of its subsidiaries or affiliates. Notwithstanding the foregoing:
(a) employment and activities of the type permitted by clause
(a) of Section 6.2 shall not violate the covenant contained in this Section 7,
so long as the Consultant does not advise or provide other services in direct
support of the consolidation of leasing companies; and
(b) if an Employment Agreement is entered into, then the
duration of the restriction contained in this Section 7 following the end of the
Consulting Term shall be solely in accordance with the terms of Section 7 of
such Employment Agreement.
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8. AGREEMENT NOT TO SOLICIT OR HIRE EMPLOYEES. The Consultant agrees
that, during the Consulting Term and for two years thereafter (but subject to
the provisos contained in this Section 7 below and subject to Section 14(c)(i)
hereof), he will not, either directly or indirectly, on his own behalf or in the
service or on behalf of others, solicit, divert or hire, attempt to solicit,
divert or hire or induce or attempt to induce to discontinue employment with the
Company or any subsidiary or affiliate thereof, any person employed by the
Company or any subsidiary or affiliate thereof, whether or not such employee is
a full time employee or a temporary employee of the Company or any subsidiary or
affiliate thereof and whether or not such employment is for a determined period
or is at will. Notwithstanding the foregoing, if an Employment Agreement is
entered into, then the duration of the restriction contained in this Section 8
following the end of the Consulting Term shall be solely in accordance with the
terms of Section 8 of such Employment Agreement.
9. OWNERSHIP AND NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL
INFORMATION.
9.1 As used in this Agreement, "Confidential Information" shall mean
all customer sales and marketing information, customer account records,
proprietary receipts and/or processing techniques, information regarding vendors
and products, training and operations memoranda and similar information,
personnel records, pricing information, financial information and trade secrets
concerning or relating to the business, accounts, customers, employees and
affairs of the Company, or any subsidiary or affiliate thereof, obtained by or
furnished, disclosed or disseminated to the Consultant, or obtained, assembled
or compiled by the Consultant or under his supervision during the course of his
rendering Services to the Company, and all physical embodiments of the
foregoing, all of which are hereby agreed to be the property of and confidential
to the Company, but Confidential Information shall not include any of the
foregoing to the extent that the Consultant can show that the same (a) is or
becomes publicly known through no fault or breach of this Agreement by the
Consultant, or (b) was known by the Consultant without restriction of
confidentiality prior to the commencement of the Consulting Term.
9.2 The Consultant acknowledges and agrees that all Confidential
Information, and all physical embodiments thereof, are confidential to and shall
be and remain the sole and exclusive property of the Company. Upon request by
the Company, and in any event upon the end of the Consulting Term, as a prior
condition to the Consultant's receipt of any final Fee payments hereunder, the
Consultant shall deliver to the Company all property belonging to the Company or
any of its subsidiaries or affiliates, including, without limitation, all
Confidential Information (and all embodiments thereof), then in his custody,
control or possession, but any forfeiture of such payments shall not be
considered a satisfaction or a release of or liquidated damages for any claim(s)
for damages against the Consultant which may accrue to the Company, as a result
of any breach of this Section 9 by the Consultant.
9.3 The Consultant agrees that he will not, either during the
Consulting Term or at any time thereafter, without the prior written consent of
the Company, use, disclose or make available any Confidential Information to any
person or entity, nor shall he use, disclose, make
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available or cause to be used, disclosed or made available, or permit or allow,
either on his own behalf or on behalf of others, any use or disclosure of such
Confidential Information (a) other than in the proper performance of the
Consultant's duties hereunder, or (b) unless required to do so by order of a
court of law or at equity, by order of a governmental authority or agency or
pursuant to a subpoena, after reasonable notice to the Company and an
opportunity for the Company to contest, in each case to the fullest extent
practicable.
10. INVENTIONS. The Consultant hereby assigns and agrees to assign to
the Company or its nominee all his interests in (a) all works of authorship
reduced to a tangible medium of expression and (b) all patentable inventions,
improvements, and valuable discoveries that, in either case, are conceived or
made by the Consultant, solely or jointly with another, during the Consulting
Term and that are directly related to the business or activities of the Company
and that the Consultant conceives in the course of his engagement by the
Company, regardless of whether or not such works of authorship, inventions or
improvements qualify as "works for hire." Whenever requested to do so by the
Company, the Consultant shall execute at the expense of the Company any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
11. REASONABLENESS OF RESTRICTIONS. In the event that any provision
relating to time period or geographic area of any restriction set forth in
Sections 6, 7, 8, 9 or 10 shall be declared by a court of competent jurisdiction
to exceed the maximum time period or area of restriction that the court deems
reasonable and enforceable, the time period or area of restriction which the
court finds to be reasonable and enforceable shall be deemed to become, and
thereafter shall be, the maximum time period or geographic area of such
restriction.
12. ENFORCEABILITY. Any provision of Sections 6, 7, 8, 9 or 10 which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, but shall be enforced to the
maximum extent permitted by law, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
13. INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Consultant of any of the covenants contained in
Sections 6, 7, 8, 9 or 10 of this Agreement will cause irreparable harm and
damage to the Company, the monetary amount of which may be virtually impossible
to ascertain. As a result, the Consultant recognizes and hereby acknowledges
that the Company shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the
covenants contained in Sections 6, 7, 8, 9 or 10 of this Agreement by the
Consultant or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.
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14. TERMINATION; COMPENSATION; STOCK REPURCHASE.
(a) Either party shall have the right to terminate the Consulting
Term at any time.
(b) If the Consulting Term is terminated by the Company pursuant to
Section 14(a) prior to the time at which it would otherwise have expired under
Section 2 hereof, then the Company shall continue to pay the Consultant the Fee
for the remaining portion of the Consulting Term.
(c) If the Consulting Term is terminated by the Consultant pursuant
to Section 14(a) prior to the time at which it would otherwise have expired
under Section 2 hereof, then:
(i) if such termination occurs on or after July 1, 1998 and if
the IPO shall not have been consummated prior to such termination, the
provisions of Sections 6, 7 and 8 of this Agreement shall not survive any such
termination;
(ii) the Consultant shall be entitled to receive a terminal Fee
payment in an amount equal to the then outstanding principal balance of and
accrued interest on the full-recourse promissory note of even date herewith made
by the Consultant in favor of the Company in connection with the Subscription
Agreement between the Company and the Consultant of even date herewith (the
"Subscription Agreement"), which Fee payment shall not be paid to the Consultant
but instead shall be accrued by the Company and set off on the date of such
termination of the Consulting Term against the then-outstanding obligations of
the Consultant under such full-recourse promissory note, such set-off to be
effected first against accrued interest and thereafter against the then
principal balance of such promissory note; and
(iii) the Consultant (or, if the Consultant is not then living,
his executors and administrators) shall immediately thereupon and for 20 days
thereafter have the right, but not the obligation, to require the Company to
repurchase from the Consultant all of the shares of the Company's Common Stock
theretofore sold to the Consultant pursuant to the Subscription Agreement, at a
purchase price equal to the greater of $3.00 per share or the then-current fair
market value per share as determined in good faith by the Company's Board of
Directors. If the Consultant exercises his right to require the Company to
repurchase such shares in accordance with this Section 14(c)(iii), then the
Company shall repurchase such shares at the price as aforesaid, such repurchase
to be consummated within five days after notice from the Consultant of his
exercise of such right.
15. PRIOR AGREEMENTS. The Consultant represents to the Company that:
(a) other than those set forth in this Agreement, there are no agreements,
arrangements or understandings, written or oral, with the Company with respect
to his retention as a consultant, his employment, payment of compensation or
entitlement to benefits for himself, or his heirs or beneficiaries of any kind;
(b) there are no restrictions, agreements or understandings whatsoever to which
the Consultant is a party
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or by which he is bound which would prevent or make unlawful his execution of
this Agreement or his retention as a consultant hereunder; (c) his execution of
this Agreement and his retention as a consultant hereunder do not constitute a
breach of any contract, agreement or understanding, oral or written, to which he
is a party or by which he is bound; and (d) he is free and able to execute this
Agreement and to enter into the consulting arrangement hereunder on the terms
and subject to the conditions hereof.
16. GENERAL PROVISIONS.
16.1 Indulgences, Etc. Any failure or delay on the part of any
party to exercise any right, remedy, power or privilege under this Agreement
will not operate as a waiver thereof, nor will any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor will any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of that right, remedy, power or privilege with respect to
any other occurrence.
16.2 Notices. All notices, requests, demands and other
communications required or permitted under this Agreement must be in writing and
will be deemed to have been duly given, made and received only when delivered
(personally, by facsimile transmission or by courier service such as Federal
Express, or by other messenger) or when deposited in the United States mails,
registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below:
(i) If to the Consultant:
Xxxxxx X. Xxxxxx
000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
(ii) If to the Company:
U.S. Leasing, Inc.
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. New
with a copy given in the manner prescribed above to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
Xxx Xxxxxx Xxxxxx, Xxxxxx-Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
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Any party may alter the address to which communications or copies are to be sent
by giving notice of any change of address to the other party in conformity with
the provisions of this paragraph for the giving of notice.
16.3 Binding Nature of Agreement; Assignment. This Agreement shall
be binding upon and inure to the benefit of the Company and its successors and
assigns and shall be binding upon the Consultant, his heirs and legal
representatives. The Company may assign this Agreement at any time to any
affiliate, provided that such assignee assumes all of the obligations of the
Company hereunder; the Consultant may not assign this Agreement.
16.4 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which will be deemed to be an original and
all of which will together constitute one and the same instrument.
16.5 Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision will be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
16.6 Entire Agreement. This Agreement (including the Exhibit
attached hereto) contains the entire understanding between the parties hereto
with respect to the subject matter of this Agreement, and supersedes all prior
and contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, with respect to the subject matter of this
Agreement. The express terms of this Agreement control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by an agreement
in writing.
16.7 Remedies. The rights conferred upon the Company pursuant to
Section 13 hereof shall not be exclusive of, but shall be in addition to, any
other rights or remedies which the Company may have at law, in equity or
otherwise.
16.8 Section Headings. The section headings in this Agreement are
for convenience only; they form no part of this Agreement and will not affect
its interpretation.
16.9 Governing Law. This Agreement, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of Florida,
excluding the choice of law rules thereof. The Company and the Consultant each
hereby irrevocably submit to the jurisdiction of the state or federal courts
located in Dade County, Florida in connection with any suit, action or other
proceeding arising out of or relating to this Agreement and hereby agree not to
assert, by way of motion, as a defense, or otherwise in any such suit, action or
proceeding that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced by such courts.
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16.10 Survival. The provisions of Sections 6, 7, 9, 10, 11, 12, 13
and 16 hereof shall survive the termination of this Agreement to the extent
necessary to effectuate the respective purposes of such provisions.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
U.S. LEASING, INC.
By: /s/ XXXXXX NEW
---------------------------------------------
Name: Xxxxxx New
Title: Chairman and CEO
CONSULTANT
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Exhibit A: Form of Employment Agreement
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EXHIBIT A
FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of ____________, 1998 (the "Effective Date"), by and between U.S.
LEASING, INC., a Delaware corporation (the "Company"), and XXXXXX X. XXXXXX (the
"Employee").
R E C I T A L S
The Company desires to obtain the services of the Employee in the
employment of the Company on the terms and subject to the conditions set forth
in this Agreement, and the Employee desires to make his services available to
the Company on the terms and subject to the conditions set forth in this
Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, agreements and mutual
covenants set forth herein, the parties hereto, intending to be bound legally,
hereby agree as follows:
1. DEFINITIONS. The following terms when used herein, unless the
context otherwise requires, shall be defined as follows:
1.1 "Cause" shall have the meaning set forth in Section 5.1
hereof.
1.2 "Company" shall mean U.S. Leasing, Inc., a Delaware
corporation.
1.3 "Competing Business" shall have the meaning set forth
in Section 6.1 hereof.
1.4 "Confidential Information" shall have the meaning set
forth in Section 9.1 hereof.
1.5 "Term of Employment" shall have the meaning set forth
in Section 3 hereof.
2. EMPLOYMENT.
2.1 General. The Company hereby agrees to employ the Employee,
as Executive Vice President -- Structured Finance during the Term of Employment
on the terms and subject to the conditions contained in this Agreement, and the
Employee hereby agrees to accept such employment on the terms and subject to the
conditions contained in this Agreement.
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2.2 Duties of Employee.
(a) During the Term of Employment, the Employee shall:
(i) report directly to the Chief Executive Officer
until such time as the Company has hired a Chief Operating Officer, whereupon
Employee shall report to the Chief Operating Officer of the Company (the Chief
Executive Officer, prior to the hiring of the Chief Operating Officer, and the
Chief Operating Officer are sometimes hereinafter referred to as the "Reporting
Officer");
(ii) diligently perform all duties and
responsibilities as may be assigned to him by the Company's Board of Directors
and by the Reporting Officer; and
(iii) exercise such power and authority as may from
time to time be delegated to him by the Company's Board of Directors and by the
Reporting Officer.
(b) The Employee shall devote his full business time and
attention to the business and affairs of the Company as necessary to perform his
duties and responsibilities hereunder, render such services to the best of his
ability, and use his best efforts to promote the interests of the Company. The
Employee shall be permitted, to the extent that such activities do not interfere
with or detract from the Employee's performance of his duties and
responsibilities hereunder, to (i) manage the Employee's personal, financial and
legal affairs, and (ii) serve on corporate, civic or charitable boards or
committees unless the Company's Board of Directors or Chief Executive Officer
reasonably determines that such service in any instance would be inimical to or
otherwise not in the best interests of the Company.
(c) The Employee shall not be required to perform any
duties or responsibilities which would be reasonably likely to result in
non-compliance or violation of any applicable law or regulation. The Company
shall be entitled to rely upon the advice of its in-house and/or outside counsel
in concluding that any such non-compliance or violation is not reasonably likely
to result, and the Employee shall be bound by the Company's conclusion if so
advised.
(d) In furtherance of the performance of his duties
hereunder, but not in limitation of the Employee's responsibility to perform
such duties, the Employee shall be provided with reasonable administrative and
technical support consistent with his position and with the Company's ordinary
practices for the assignment of personnel.
3. TERM. Subject to the provisions of Section 5 of this Agreement, the
Company shall employ the Employee for a term of two years (the "Term of
Employment") commencing on the Effective Date and expiring on January 24, 2000.
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4. COMPENSATION.
4.1 Salary. The Employee shall receive an initial annual salary of
$250,000.00 during the Term of Employment, and such salary shall be payable in
installments consistent with the Company's normal payroll schedule commencing on
either the first or fifteenth day of the month, as the case may be. The
Employee's performance and then-existing annual salary will be reviewed by the
Compensation Committee of the Company's Board of Directors on the first and on
each successive anniversary of the Effective Date during the Term of Employment,
at which time the Employee's annual salary may be adjusted (but in no event to
an amount less than $250,000 per year).
4.2 Benefits and Perquisites.
(a) During the Term of Employment, the Employee shall be
entitled to participate in all plans, programs and arrangements adopted for the
general benefit of the Company's employees and officers, such as stock option
plans, 401(k) plans, pension plans, profit sharing plans, medical plans, group
or other insurance plans and benefits and other perquisites generally available
to employees and officers, to the extent that the Employee is and remains
eligible to participate therein and subject to the eligibility provisions of
such plans, programs and arrangements in effect from time to time. The Company
also expects to develop annual bonus or other incentive arrangements for
executive officers of the Company, and the Employee shall participate in such
arrangements on a basis substantially similar to that of the Company's other
executive officers.
(b) For each calendar year during the Term of Employment, the
Employee shall be entitled to not less than four weeks of paid vacation,
prorated for any period of employment of less than an entire year.
(c) To the extent that, and for a duration not to exceed the
period in which, the Company does not provide welfare benefit plans of a general
type similar to those maintained by the Employee's immediately prior employer in
which the Employee is entitled to participate on a post-termination basis under
COBRA, the Company shall reimburse the Employee for the Employee's COBRA
contribution payment costs in connection with the Employee's post-termination
participation in such prior employer's welfare benefit plans.
4.3 Withholding. Notwithstanding any provision in this Agreement to
the contrary, all payments required to be made by the Company hereunder to the
Employee in connection with the Employee's employment hereunder shall be subject
to withholding of such amounts relating to taxes as the Company may reasonably
determine it is required to withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts, in whole or in part, the
Company may, in its sole discretion, accept other provisions for the payment of
taxes, provided that the Company is satisfied that all requirements of law
affecting its responsibilities to withhold have been satisfied.
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4.4 Reimbursement of Expenses. The Company agrees to reimburse the
Employee for all reasonable business expenses incurred by the Employee in the
discharge of his duties hereunder (including, without limitation, reasonable
travel and entertainment expenses), subject to the Company's reimbursement
policies in effect from time to time. The Employee agrees to maintain records of
his business expenses in such form and detail as the Company may reasonably
request and to make such records available to the Company as and when requested.
4.5 Moving and Transition Expenses. The Company shall promptly
reimburse the Employee for the actual cost of all reasonable moving and
relocation expenses (as agreed upon between the Company and the Employee)
reasonably incurred by the Employee in relocating from the New York, New York
metropolitan area to the Miami, Florida metropolitan area. The Employee shall
complete such relocation as soon as is reasonably practicable, in Employee's
reasonable judgment, for the Employee and his family. During the Term of
Employment but prior to such relocation, the Company will reimburse the Employee
for the actual cost of transition expenses, which shall consist of the
reasonable expenses of commuting for business purposes from the Employee's home
in the New York, New York metropolitan area to the Company's principal place of
business in the Miami, Florida metropolitan area.
5. TERMINATION.
5.1 Termination for Cause.
(a) Notwithstanding any provision in this Agreement to the
contrary, this Agreement may be terminated by the Company for "Cause" at any
time during the Term of Employment. For purposes of this Agreement, "Cause" for
the termination of the Employee's employment hereunder shall be deemed to exist
if in the reasonable judgment of the Company's Board of Directors: (i) the
Employee is convicted of fraud, theft or embezzlement against the Company; (ii)
the Employee is convicted of a felony or a crime involving moral turpitude;
(iii) the Employee breaches any of the terms of this Agreement, which breach
results in material harm to the business and/or operations of the Company and
its subsidiaries taken as a whole; or (iv) the Employee engages in gross or
willful misconduct that causes material harm to the business and/or operations
of the Company and its subsidiaries taken as a whole.
(b) If the Company intends to terminate the Employee for Cause
as defined herein, then the Company shall notify the Employee in writing
executed by or on behalf of the Company's Chief Executive Officer. Such written
notice shall specify the particular act or acts, or failure to act, which is or
are the basis for the decision so to terminate the Employee's employment for
Cause. The Employee shall be given the opportunity within the 30 calendar days
after delivery of the notice (i) to meet with the Company's Board of Directors
to defend such act or acts, or failure to act, and (ii) if the Board determines
by majority vote that such act or failure to act can be corrected, to correct
such act or failure to act. Upon failure of the Employee, within such 30-day
period, to correct such act or failure to act, if permitted, or upon failure of
the Board within such
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30-day period to cancel the notice of termination for Cause, the termination of
the Employee's employment by the Company for Cause under this Section 5.1 shall
be immediately effective.
(c) Upon any termination pursuant to this Section 5.1, the
Employee shall be entitled to be paid solely the Employee's salary then in
effect through the effective date of termination and any other compensation and
benefits as may be provided in accordance with the terms and provisions of any
applicable plans or programs of the Company, and (except as specifically set
forth in this Agreement) the Company shall have no further liability or other
obligation of any kind whatsoever to the Employee in his capacity as such.
5.2 Termination by the Company Without Cause. The Company may, in
its sole and absolute discretion, terminate the employment of the Employee
hereunder, at any time prior to the expiration of the Term of Employment,
without "Cause" (as such term is defined in Section 5.1 above), or otherwise
without any cause, reason or justification, provided that the Company provides
to the Employee at least 60 days' prior written notice (the "Termination
Notice") of such termination. In the event of any such termination by the
Company, (a) the Employee's employment with the Company shall cease and
terminate on the date specified in the Termination Notice (or, if no date is so
specified, on the date which is 60 days following the date of such notice), and
(b) the Employee shall be entitled to receive and be paid solely the Employee's
salary then in effect for the greater of (x) the 12-month period following the
Employee's termination or (y) the remaining Term of Employment, payable over
tsuch period at the Company's regular and customary intervals for the payment of
salaries as then in effect and any other compensation and benefits as may be
provided in accordance with the terms and provisions of any applicable plans or
programs of the Company, and (except as specifically set forth in this
Agreement) the Company shall have no further liability or other obligation of
any kind whatsoever to the Employee in his capacity as such. In addition, the
Company shall reimburse the Employee for the actual cost of moving expenses
reasonably incurred by the Employee in relocating back to the New York, New York
metropolitan area, including, without limitation, all reasonable costs and
expenses attributable to house-hunting trips by the Employee and/or his spouse,
provided, that relocation expenses reimbursed pursuant to this Section 5.2 shall
not exceed $20,000 in the aggregate.
5.3 Death of the Employee. If the Employee shall die during the Term
of Employment, then the Employee's employment with the Company shall immediately
cease and terminate and the Employee's estate, heirs (at law), devisees,
legatees or other proper and legally entitled descendants, or the personal
representative, executor, administrator or other proper legal representative on
behalf of such descendants, shall be entitled to receive and be paid solely the
Employee's salary through the date of death and any other compensation and
benefits as may be provided in accordance with the terms and provisions of any
applicable plans or programs of the Company, and (except as specifically set
forth in this Agreement) the Company shall have no further liability or other
obligation of any kind whatsoever to the Employee in his capacity as such.
5.4 Disability of the Employee. If the Employee becomes
incapacitated during the Term of Employment by reason of sickness, accident or
other mental or physical disability such
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that he is substantially unable to perform the essential functions of his duties
and responsibilities hereunder, with or without reasonable accommodation, for a
period of 120 consecutive days, or for shorter or intermittent periods
aggregating 120 days during any 12-month period (a "Disability"), the Company
thereafter shall have the right, in its sole and absolute discretion, to
terminate the Employee's employment under this Agreement by sending written
notice of such termination to the Employee or its legal guardian or other proper
legal representative and thereupon his employment hereunder shall immediately
cease and terminate. In the event of any such termination, the Employee shall be
entitled to receive and be paid solely the Employee's salary then in effect
through the effective date of termination and any other compensation and
benefits as may be provided in accordance with the terms and provisions of any
applicable plans or programs of the Company, and (except as specifically set
forth in this Agreement) the Company shall have no further liability or other
obligation of any kind whatsoever to the Employee in his capacity as such.
5.5 Termination by the Employee.
(a) The Employee may terminate the Employee's employment with
the Company hereunder at any time and for any reason. Employee must provide to
the Company written notice of such termination not less than 60 days prior to
the date such termination is to be effective. Upon any termination pursuant to
this Section 5.5, the Employee shall be entitled to be paid solely the
Employee's salary then in effect through the effective date of termination and
any other compensation and benefits as may be provided in accordance with the
terms and provisions of any applicable plans or programs of the Company, and
(except as specifically set forth in this Agreement) the Company shall have no
further liability or other obligation of any kind whatsoever to the Employee in
his capacity as such.
(b) In addition to the rights to terminate set forth in Section
5.5(a), the Employee may terminate his employment hereunder for Good Reason, as
defined in this Section 5.5(b). For purposes of this Agreement, "Good Reason"
means (i) the assignment to the Employee of duties or responsibilities
materially inconsistent with and inferior to his title and position, (ii) any
material decrease in the aggregate compensation of the Employee, or any failure
to pay such compensation when due (other than a failure to pay resulting from
mere technical error or mistake), or (iii) any demand by the Company that the
Employee relocate to a principal office other than the Company's principal
executive offices unless consented to by the Employee. In the event of a
resignation for Good Reason, Company shall reimburse the Employee for the actual
cost of moving expenses reasonably incurred by the Employee in relocating back
to the New York, New York metropolitan area, including, without limitation, all
reasonable costs and expenses attributable to house-hunting trips by the
Employee and/or his spouse, provided, that relocation expenses reimbursed
pursuant to this Section 5.5(b) shall not exceed $20,000 in the aggregate. In
all respects and for all purposes of this Agreement, a termination by the
Employee of his employment hereunder for Good Reason shall have the same effect
as, and shall entitle the Employee to the same rights and benefits as, a
termination of the Employee's employment by the Company without Cause under this
Agreement.
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6. AGREEMENT NOT TO COMPETE.
6.1 As used in this Agreement, "Competing Business" shall mean any
business or enterprise which is engaged in (a) the equipment leasing business,
or (b) any business, business segment or product line engaged in by the Company
on the date of termination of the Employee's employment with the Company
(clauses (a) and (b) collectively referred to herein as the "Company's
Business").
6.2 The Employee agrees that, during the Term of Employment and for
two years following the termination of his employment by the Company for Cause
or his resignation without Good Reason, he will not, without the prior written
consent of the Company, either directly or indirectly, on his own behalf or in
the service of or on behalf of others as a shareholder, director, officer,
trustee, consultant, independent contractor or employee, engage in, or be
employed by, or provide services to, any Competing Business within the State of
Florida or in any other state in which the Company or any subsidiary or
affiliate thereof is engaged in business or in which of any of their respective
products or services are marketed or sold at the time of such termination.
Notwithstanding the foregoing:
(a) employment with an investment banking or financial advisory
firm or boutique (or the investment banking or financial advisory division of a
commercial bank) in a position analogous to, or providing services analogous to,
the position in which the Employee was employed with, or those services provided
by the Employee at, Xxxxxx Xxxxxxx & Co. Incorporated prior to the commencement
of the Term of Employment shall not violate the covenant contained in this
Section 6.2, so long as the Employee does not advise or provide other services
in respect of the consolidation of leasing companies; and
(b) so long as the Employee has not violated any covenant
contained in Article 7, 8 or 9 hereof, the duration of the covenant contained in
this Section 6.2 shall be nine months; provided, however, that in the event of
any violation of any covenant contained in Article 7, 8 or 9 hereof prior to the
expiration of such covenants in accordance with their terms, the nine-month
duration provided for in this Section 6.2(b) shall be null and void and of no
further force and effect, and the two year duration shall again apply; and
(c) the foregoing covenants shall not be deemed to prohibit the
Employee from acquiring as an investment not more than five percent of the
capital stock of a Competing Business whose stock is traded on a national
securities exchange or through the automated quotation system of a registered
securities association.
7. AGREEMENT NOT TO SOLICIT OR SELL TO CUSTOMERS. The Employee agrees
that, during the Term of Employment and for two years following the termination
of his employment by the Company for Cause or his resignation without Good
Reason, he will not, without the prior written consent of the Company, either
directly or indirectly, call on, solicit, take away, accept as a client,
customer or prospective client, customer or attempt to call on, solicit, take
away or accept as a client,
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customer or prospective client or customer, any person that was a client,
customer or prospective client or customer of the Company or any of its
subsidiaries or affiliates. Notwithstanding the foregoing, employment and
activities of the type permitted by clause (a) of Section 6.2 shall not violate
the covenant contained in this Section 7, so long as the Employee does not
advise or provide other services in direct support of the consolidation of
leasing companies.
8. AGREEMENT NOT TO SOLICIT OR HIRE EMPLOYEES. The Employee agrees that
during the Term of Employment and for two years following the termination of his
employment with Cause or his resignation without Good Reason, he will not,
either directly or indirectly, on his own behalf or in the service or on behalf
of others, solicit, divert or hire, attempt to solicit, divert or hire or induce
or attempt to induce to discontinue employment with the Company or any
subsidiary or affiliate thereof, any person employed by the Company or any
subsidiary or affiliate thereof, whether or not such employee is a full time
employee or a temporary employee of the Company or any subsidiary or affiliate
thereof and whether or not such employment is for a determined period or is at
will.
9. OWNERSHIP AND NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL
INFORMATION.
9.1 As used in this Agreement, "Confidential Information" shall mean
all customer sales and marketing information, customer account records,
proprietary receipts and/or processing techniques, information regarding vendors
and products, training and operations memoranda and similar information,
personnel records, pricing information, financial information and trade secrets
concerning or relating to the business, accounts, customers, employees and
affairs of the Company, or any subsidiary or affiliate thereof, obtained by or
furnished, disclosed or disseminated to the Employee, or obtained, assembled or
compiled by the Employee or under his supervision during the course of his
employment by the Company, and all physical embodiments of the foregoing, all of
which are hereby agreed to be the property of and confidential to the Company,
but Confidential Information shall not include any of the foregoing to the
extent that the Employee can show that the same (a) is or becomes publicly known
through no fault or breach of this Agreement by the Employee, or (b) was known
by the Employee without restriction of confidentiality prior to the commencement
of the Term of Employment.
9.2 The Employee acknowledges and agrees that all Confidential
Information, and all physical embodiments thereof, are confidential to and shall
be and remain the sole and exclusive property of the Company. Upon request by
the Company, and in any event upon termination of the Employee's employment with
the Company for any reason whatsoever, as a prior condition to the Employee's
receipt of any final salary or benefit payments hereunder, the Employee shall
deliver to the Company all property belonging to the Company or any of its
subsidiaries or affiliates, including, without limitation, all Confidential
Information (and all embodiments thereof), then in his custody, control or
possession, but any forfeiture of such salary or benefit shall not be considered
a satisfaction or a release of or liquidated damages for any claim(s) for
damages against the Employee which may accrue to the Company, as a result of any
breach of this Section 9 by the Employee.
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9.3 The Employee agrees that he will not, either during the Term of
Employment or at any time thereafter, without the prior written consent of the
Company, use, disclose or make available any Confidential Information to any
person or entity, nor shall he use, disclose, make available or cause to be
used, disclosed or made available, or permit or allow, either on his own behalf
or on behalf of others, any use or disclosure of such Confidential Information
(a) other than in the proper performance of the Employee's duties hereunder, or
(b) unless required to do so by order of a court of law or at equity, by order
of a governmental authority or agency or pursuant to a subpoena, after
reasonable notice to the Company and an opportunity for the Company to contest,
in each case to the fullest extent practicable.
10. INVENTIONS. The Employee hereby assigns and agrees to assign to the
Company or its nominee all his interests in (a) all works of authorship reduced
to a tangible medium of expression and (b) all patentable inventions,
improvements, and valuable discoveries that, in either case, are conceived or
made by the Employee, solely or jointly with another, during the Term of
Employment and that are directly related to the business or activities of the
Company and that the Employee conceives in the course of his employment by the
Company, regardless of whether or not such works of authorship, inventions or
improvements qualify as "works for hire." Whenever requested to do so by the
Company, the Employee shall execute at the expense of the Company any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
11. REASONABLENESS OF RESTRICTIONS. In the event that any provision
relating to time period or geographic area of any restriction set forth in
Sections 6, 7, 8, 9 or 10 shall be declared by a court of competent jurisdiction
to exceed the maximum time period or area of restriction that the court deems
reasonable and enforceable, the time period or area of restriction which the
court finds to be reasonable and enforceable shall be deemed to become, and
thereafter shall be, the maximum time period or geographic area of such
restriction.
12. ENFORCEABILITY. Any provision of Sections 6, 7, 8, 9 or 10 which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, but shall be enforced to the
maximum extent permitted by law, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
13. INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Employee of any of the covenants contained in
Sections 6, 7, 8, 9 or 10 of this Agreement will cause irreparable harm and
damage to the Company, the monetary amount of which may be virtually impossible
to ascertain. As a result, the Employee recognizes and hereby acknowledges that
the Company shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the
covenants contained in Sections 6, 7, 8, 9 or 10 of this Agreement by the
Employee or any of his affiliates, associates,
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partners or agents, either directly or indirectly, and that such right to
injunction shall be cumulative and in addition to whatever other remedies the
Company may possess.
14. NO ASSIGNMENT. The Employee shall not assign or delegate his
employment obligations pursuant to this Agreement to any other person.
15. EMPLOYER'S AUTHORITY. The relationship between the parties hereto
is that of employer and employee. The Employee agrees to observe and comply with
the rules and regulations of the Company, as adopted by the Company from time to
time with respect to the performance of the duties of the Employee.
16. GOVERNING LAW. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Florida, excluding
the choice of law rules thereof. The Company and the Employee each hereby
irrevocably submit to the jurisdiction of the state or federal courts located in
Dade County, Florida in connection with any suit, action or other proceeding
arising out of or relating to this Agreement and hereby agree not to assert, by
way of motion, as a defense, or otherwise in any such suit, action or proceeding
that the suit, action or proceeding is brought in an inconvenient forum, that
the venue of the suit, action or proceeding is improper or that this Agreement
or the subject matter hereof may not be enforced by such courts.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements, both oral and
written, between the parties hereto with respect to such subject matter. This
Agreement may not be modified in any way unless by a written instrument signed
by both the Company and the Employee.
18. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or three days after sent by registered or certified United
States mail, return receipt requested, postage prepaid, or the next business day
following dispatch by a reputable overnight courier service, addressed as
follows:
(a) If to the Employee:
Xxxxxx X. Xxxxxx
000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
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(b) If to the Company:
U.S. Leasing, Inc.
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. New
with a copy given in the manner prescribed above to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
Xxx Xxxxxx Xxxxxx, Xxxxxx-Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
or to such other addresses as either party hereto may from time to time give
notice of to the other party hereto in the aforesaid manner.
19. BENEFITS; BINDING EFFECT. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns.
20. SEVERABILITY. Except as otherwise provided in Sections 11 and 12,
the invalidity of any one or more of the words, phrases, sentences, clauses,
sections or subsections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences, clauses, sections
or subsections contained in this Agreement or any part thereof shall be declared
invalid, this Agreement shall be construed as if such invalid word or words,
phrase or phrases, sentence or sentences, clause or clauses, section or sections
or subsection or subsections had not been inserted. If such invalidity is caused
by length of time or size of area, or both, the otherwise invalid provision will
be considered to be reduced to a period or area which would cure such
invalidity.
21. DAMAGES. In the event that either party hereto brings suit for the
collection of any damages resulting from, or the injunction of any action
constituting, a breach of any of the terms or provisions of this Agreement, then
the non-prevailing party shall pay all reasonable court costs and attorneys'
fees of the other party.
22. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the. meaning or
interpretation of this Agreement.
23. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the parties hereto and
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their respective heirs, personal representative, legal representative,
successors and assigns, any rights or remedies under or by reason of this
Agreement.
24. AMENDMENT; MODIFICATION; WAIVER. No amendment, modification or
waiver of the terms of this Agreement shall be valid unless made in writing and
duly executed by the Company and the Employee. No delay or failure at any time
on the part of the Company or the Employee in exercising any right, power or
privilege under this Agreement, or in enforcing any provision of this Agreement,
shall impair any such right, power or privilege, or be construed as a waiver of
any default or as any acquiescence therein, or shall affect the right of the
Company or the Employee thereafter to enforce each and every provision of this
Agreement in accordance with its terms. The waiver by either party hereto of a
breach or violation of any term or provision of this Agreement shall neither
operate nor be construed as a waiver of any subsequent breach or violation.
25. SURVIVAL. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement or the Term of
Employment for any reason to the extent necessary to the intended provision of
such rights and the intended performance of such obligations.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
U.S. LEASING, INC., a Delaware corporation
By:
---------------------------------------
Name:
Title:
EMPLOYEE:
------------------------------------------
Xxxxxx X. Xxxxxx
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