EMPLOYMENT RETENTION AGREEMENT
THIS AGREEMENT between Olympic Financial Ltd. (the "Company") and
Xxxxx X. Xxxxxxxx (the "Executive") is dated as of this 7 day of November,
1996.
W I T N E S S E T H :
WHEREAS, the Company and the Executive have agreed to enter into an
agreement providing the Company and the Executive with certain rights to
assure the Company of continuity of management;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is hereby agreed by and between the Company
and the Executive as follows:
1. EFFECTIVE DATE; TERM. This Agreement shall govern the terms
and conditions of Executive's employment commencing as of the date hereof
(the "Effective Date").
2. PRIOR EMPLOYMENT AGREEMENT. As of the Effective Date, this
Agreement shall supersede the Executive's Employment Agreement with the
Company dated August 1, 1991, as amended.
3. RETENTION PERIOD. The Company agrees to continue the
Executive in its employ, and the Executive agrees to remain in the employ of
the Company, for the period (the "Retention Period") commencing on the
Effective Date and ending on the date of any termination of the Executive's
employment in accordance with Section 6 of this Agreement.
4. POSITION AND DUTIES. (a) NO REDUCTION IN POSITION. During
the Retention Period, the Executive's position (including titles), authority
and responsibilities shall be at least commensurate with the highest of those
held or exercised by him at any time during the 90-day period immediately
preceding the Effective Date.
(b) BUSINESS TIME. During the Retention Period, the Executive
shall devote his full business time during normal business hours to the
business and affairs of the Company and use his best efforts to perform
faithfully and efficiently the responsibilities assigned to him hereunder, to
the extent necessary to discharge such responsibilities, except for
(i) reasonable time spent in serving on corporate, civic or
charitable boards or committees of the nature similar to those on
which the Executive served prior to the Change of Control, or
otherwise approved by the Board, in each case only if and to the
extent not substantially interfering with the performance of such
responsibilities, and
(ii) periods of vacation and sick leave to which he is entitled.
It is expressly understood and agreed that the Executive's continuing to
serve on any boards and committees on which he is serving or with which he is
otherwise associated immediately preceding the Effective Date shall not be
deemed to interfere with the performance of the Executive's services to the
Company.
5. COMPENSATION AND BENEFITS. (a) BASE SALARY. During the
Retention Period, the Executive shall receive a base salary ("Base Salary")
at a monthly rate at least equal to the monthly salary paid to the Executive
by the Company and any of its affiliated companies immediately prior to the
Effective Date. The Base Salary shall be reviewed at least once each year
after the Effective Date, and may be increased (but not decreased) at any
time and from time to time by action of the Board or any committee thereof or
any individual having authority to take such action in accordance with the
Company's regular practices. Neither payment of the Base Salary nor payment
of any increased Base Salary after the Effective Date shall serve to limit or
reduce any other obligation of the Company hereunder. For purposes of the
remaining provisions of this Agreement, the term "Base Salary" shall mean
Base Salary as defined in this Section 5(a) or, if increased after the
Effective Date, the Base Salary as so increased.
(b) ANNUAL BONUS. In addition to the Base Salary, the Executive
shall be awarded for each fiscal year of the Company ending during the
Retention Period an annual bonus, to be based on reasonable and customary
criteria consistent with the Company's past practices (the "Annual Bonus"),
with a target amount at least equal to 35% of his Base Salary (I.E., that
percentage of the Executive's Base Salary designated by the Company's
Compensation Committee for purposes of Section 4.1 of the Company's 1998-2000
Restricted Stock Election Plan). If a fiscal year of the Company begins, but
does not end, during the Retention Period, the Executive shall receive an
amount with respect to such fiscal year at least equal to the amount of the
Annual Bonus multiplied by a fraction, the numerator of which is the number
of days in such fiscal year occurring during the Retention Period and the
denominator of which is 365. Each amount payable in respect of the
Executive's Annual Bonus shall be paid not later than 90 days after the
fiscal year next following the fiscal year for which the Annual Bonus (or
pro-rated portion) is earned or awarded. Neither the Annual Bonus nor any
bonus amount paid in excess thereof after the Effective Date shall serve to
limit or reduce any other obligation of the Company hereunder.
(c) FRINGE BENEFITS. During the Retention Period, the Company
shall provide the following fringe benefits to Executive:
(i) HEALTH, DISABILITY AND LIFE INSURANCE. Subject to
satisfaction of the eligibility requirements of such plans and the
rules and regulations applicable thereto, Executive and his family
members shall be entitled to be covered by the Company's group health
and dental insurance plans presently in effect or hereafter adopted by
the Company and applicable to employees of the Company generally and
Executive shall be entitled to be covered by the Company's group
disability and life insurance plans presently in effect or hereafter
adopted by the Company and applicable to the employees of the Company
in general. The Company shall pay the premiums associated with such
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coverage. In the event Executive makes a claim against any disability
policy provided to Executive by the Company pursuant to this Section
5(c)(i) and such policy calls for a waiting period which is applicable
to Executive's claim, the Company shall pay to Executive during such
waiting period his monthly base salary due during such period and
shall provide the other benefits due him under this Section 5(c)(i).
(ii) VACATION. Executive shall be entitled to four weeks of
vacation without loss of compensation or other benefits pursuant to
such general policies and procedures of the Company as are from time
to time adopted by the Company.
(iii) EXPENSE REIMBURSEMENT. Executive shall be reimbursed
by the Company for all reasonable expenses incurred by him in
connection with the conduct of the Company's business for which he
furnishes appropriate documentation.
(iv) AUTOMOBILE. In the event the Company shall institute a
Company car policy, Executive shall receive the benefits thereunder in
keeping with his position with the Company. During any period that
the Company has not instituted a Company car policy, the Company shall
provide to Executive use of an automobile reasonably acceptable to
Executive to be used by Executive in conducting the Company's
business. In addition, the Company shall during such period reimburse
Executive (1) an amount equal to the reasonable cost of insuring and
maintaining the automobile used by Executive for the Company's
business, and (2) the cost of maintenance and the cost of gasoline and
oil used in the automobile and in the event of a loss under the
policies insuring said automobile, the amount of any deductible
thereunder applicable to such loss. Such insurance and the coverage
and deductibles thereof shall cover both the business and personal use
of such automobile by Employee, his family and invitees and shall
include such other terms and conditions as are reasonably acceptable
to Executive. Any such reimbursements shall be made upon the
Company's receipt of invoices evidencing incurrence of such expenses.
Executive shall also be paid a monthly amount equal to the reasonable
value of personal use of such automobile, determined in accordance
with applicable federal income tax regulations.
(v) CLUB DUES. The Company shall reimburse Executive the
reasonable cost of the monthly or annual dues, as the case may be,
paid by Executive to maintain his status as a member of the Flagship
Athletic Club or of any other athletic club having equal or lesser
membership costs in lieu of such club. The Company shall also provide
to Executive and his family a membership at Minnesota Valley Golf Club
and shall reimburse the Executive for the reasonable cost of the
monthly or annual dues, as the case may be, paid by Executive to
maintain such membership. If either such membership is a corporate
membership and is subsequently converted to an individual membership,
the Company shall reimburse Executive for any fees charged in
connection with such conversion.
(vi) OFFICE AND SUPPORT STAFF. During the Retention Period,
the Executive shall be entitled to an office or offices of a size and
with furnishings and other
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appointments, and to secretarial and other assistance, at least equal
to the most favorable of the foregoing provided to the Executive at
any time during the 90-day period immediately preceding the Effective
Date.
6. TERMINATION. (a) DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon his death. The Company may
terminate Executive's employment during the Retention Period, after having
established the Executive's Disability, by giving the Executive written
notice of its intention to terminate his employment, and his employment with
the Company shall terminate effective on the 90th day after receipt of such
notice if, within 90 days after such receipt, the Executive shall fail to
return to full-time performance of his duties. For purposes of this
Agreement, "Disability" means disability which, after the expiration of more
than 26 weeks after its commencement, is determined to be total and permanent
by a physician selected by the Company or its insurers and acceptable to the
Executive or his legal representatives (such agreement to acceptability not
to be withheld unreasonably).
(b) VOLUNTARY TERMINATION. Notwithstanding anything in this
Agreement to the contrary, the Executive may, upon not less than 15 days'
advance written notice to the Company, voluntarily terminate employment
during the Retention Period for any reason, provided that any termination by
the Executive pursuant to Section 6(d) of this Agreement on account of Good
Reason (as defined therein) shall not be treated as a voluntary termination
under this Section 6(b).
(c) CAUSE. The Company may terminate the Executive's employment
during the Retention Period for Cause. For purposes of this Agreement,
"Cause" means (i) gross misconduct on the Executive's part which is
demonstrably willful and deliberate and which results in material damage to
the Company's business or reputation or (ii) repeated material violations by
the Executive of his obligations under Section 4 of this Agreement which
violations are demonstrably willful and deliberate.
(d) GOOD REASON. The Executive may terminate his employment
during the Retention Period for Good Reason. For purposes of this Agreement,
"Good Reason" means
(i) a good faith determination by the Executive that,
without his prior written consent, the Company or any of its officers
has taken or failed to take any action (including, without limitation,
(A) exclusion of the Executive from consideration of material matters
within his area of responsibility, other than an insubstantial or
inadvertent exclusion remedied by the Company promptly after receipt
of notice thereof from the Executive, (B) statements or actions which
undermine the Executive's authority with respect to persons under his
supervision or reduce his standing with his peers, other than an
insubstantial or inadvertent statement or action which is remedied by
the Company promptly after receipt of the notice thereof from the
Executive, (C) a pattern of discrimination against or harassment of
the Executive or persons under his supervision and (D) the subjection
of the Executive to procedures not generally applicable to other
similarly situated executives) which changes the Executive's position
(including titles),
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authority or responsibilities under Section 4 of this Agreement or
reduces the Executive's ability to carry out his duties and
responsibilities under Section 4 of this Agreement;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial
or inadvertent failure remedied by the Company promptly after receipt
of notice thereof from the Executive;
(iii) the Company's requiring the Executive to be employed at
any location more than 35 miles further from his principal residence
than the location at which the Executive was employed immediately
preceding the Effective Date; or
(iv) any failure by the Company to obtain the assumption of
and agreement to perform this Agreement by a successor as contemplated
by Section 13(b) of this Agreement.
(e) WITHOUT CAUSE. The Company shall give Executive at least 15
days' advance written notice of any termination of Executive's employment
which is not for Cause and not on account of Executive's Disability.
(f) NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company for Cause or by the Executive for Good Reason
during the Retention Period shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 14(c) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice given, in the case of a termination by the Company for Cause,
within 10 business days of the Company's having actual knowledge of all of
the events giving rise to such termination, and in the case of a termination
by Executive for Good Reason, within 180 days of the Executive's having
actual knowledge of the events giving rise to such termination, and which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the termination date is other than the
date of receipt of such notice, specifies such termination date (which date
shall be not more than 15 days after the giving of such notice). The failure
by the Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing his rights hereunder.
(g) DATE OF TERMINATION. For purposes of this Agreement, the term
"Date of Termination" means (i) in the case of a termination for which a
Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein and (ii) in all other
cases, the actual date on which the Executive's employment terminates during
the Retention Period.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH.
If the Executive's employment is terminated during the Retention Period by
reason of the Executive's death, this Agreement shall terminate without
further obligations to the Executive's legal
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representatives under this Agreement other than those obligations accrued
hereunder at the date of his death, including, for this purpose (i) the
Executive's full Base Salary through the Date of Termination, (ii) the
product of the Annual Bonus and a fraction, the numerator of which is the
number of days in the current fiscal year of the Company through the Date of
Termination, and the denominator of which is 365 (the "Pro-rated Bonus
Obligation"), (iii) any compensation previously deferred by the Executive
(together with any accrued earnings thereon) and not yet paid by the Company,
(iv) any other amounts or benefits owing to the Executive under any of the
Company's incentive compensation plans, stock option plans, restricted stock
plans or other similar plans and (v) any amounts or benefits owing to the
Executive under any of the Company's employee benefit plans or policies (such
amounts specified in clauses (i), (ii), (iii), (iv) and (v) are hereinafter
referred to as "Accrued Obligations"). Unless otherwise directed by the
Executive prior to his death, all Accrued Obligations shall be paid to the
Executive's estate.
(b) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability, the Executive shall receive all Accrued
Obligations and, in addition, from the Date of Termination until the second
anniversary of such date, shall continue to participate in or be covered
under the benefit plans and programs referred to in Section 5(c)(i) of this
Agreement or, at the Company's option, to receive equivalent benefits by
alternate means at least equal to those provided in accordance with Section
5(c)(i) of this Agreement. Anything in this Agreement to the contrary
notwithstanding, the Executive shall be entitled to receive disability and
other benefits at least equal to the most favorable level of benefits
available to disabled employees and/or their families in accordance with the
plans, programs and policies maintained by the Company or its affiliates
relating to disability at any time during the 90-day period immediately
preceding the Effective Date.
(c) CAUSE AND VOLUNTARY TERMINATION. If, during the Retention
Period, the Executive's employment shall be terminated for Cause or
voluntarily terminated by the Executive (other than on account of Good
Reason), the Executive shall receive all Accrued Obligations other than the
Pro-rated Bonus Obligation.
(d) TERMINATION BY COMPANY OTHER THAN FOR CAUSE OR DISABILITY AND
TERMINATION BY EXECUTIVE FOR GOOD REASON. LUMP SUM PAYMENT. If, during the
Retention Period, the Company terminates the Executive's employment other
than for Cause or Disability, or the Executive terminates his employment for
Good Reason, the Executive shall receive all Accrued Obligations. In
addition, the Company shall pay to the Executive in a lump sum, within 15
days after the Date of Termination, a cash amount equal to two (2) times the
sum of the following amounts:
(1) the Executive's annual Base Salary at the rate specified in
Section 5(a) of this Agreement;
(2) the Annual Bonus;
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(3) an amount equal to the average annual amount paid and/or
reimbursed to the Executive pursuant to Section 5(c)(iv) and (v)
hereof during the two calendar years preceding the Date of
Termination; and
(4) the present value, calculated using the annual federal
short-term rate as determined under Section 1274(d) of the Code, of
(without duplication) the annual cost to the Company (based on the
premium rates or other costs to it) of obtaining coverage equivalent
to the coverage under the plans and programs described in Section
5(c)(i) of this Agreement;
provided, however, that with respect to the life and medical insurance
coverage referred to in Section 5(c)(i) of this Agreement, at the
Executive's election made prior to the Date of Termination, the Company
shall use its best efforts to secure conversion coverage and shall pay
the cost of such coverage in lieu of paying the lump sum amount
attributable to such life or medical insurance coverage.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the
Executive may have with respect to awards granted to him prior to or during
the Retention Period under any stock option, restricted stock or other plans
or agreements with the Company or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company or any of its affiliated
companies shall be payable in accordance with such plan or program.
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment, distribution, acceleration
of vesting or other benefit which the Executive receives or becomes entitled
to receive, whether alone or in combination, and whether pursuant to the
terms of this Agreement or any other agreement, plan or arrangement with the
Company or any of its affiliates or any of their respective successors or
assigns, but determined without regard to any additional payments required
under this Section 9 (collectively, the "Payments"), would be subject to the
excise tax imposed by Section 4999 of the Code (or any successor provision),
or any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive of
(i) all taxes with respect to the Gross-Up Payment (including any interest or
penalties imposed with respect to such taxes) including, without limitation,
any income taxes (and any interest and penalties imposed with respect
thereto), and (ii) the Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed on the Payments.
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(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by KPMG Peat Marwick or such other nationally recognized accounting firm then
auditing the accounts of the Company (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested by the
Company. In the event that the Accounting Firm is unwilling or unable to
perform its obligations pursuant to this Section 9, the Executive shall
appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the potential uncertainty
in the application of Section 4999 of the Code (or any successor provision)
at the time of the initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 9(c) and the Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
the Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than 20 business days after the
Executive is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to
be paid. The Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including, without
limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
8
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limiting the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if the Company directs
the Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free
basis, and shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and further provided that
any extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested amount
is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 9(c)) promptly
pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the receipt
by the Executive of an amount advanced by the Company pursuant to Section
9(c), a determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to
the expiration of 30 days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
10. FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others whether by
reason of the subsequent employment of the Executive or otherwise. In no
event shall the Executive be
9
obligated to seek other employment by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement, and
no amount payable under this Agreement shall be reduced on account of any
compensation received by the Executive from other employment. In the event
that the Executive shall in good faith give a Notice of Termination for Good
Reason and it shall thereafter be determined by mutual consent of the
Executive and the Company or by a tribunal having jurisdiction over the
matter that Good Reason did not exist, the employment of the Executive shall,
unless the Company and the Executive shall otherwise mutually agree, be
deemed to have terminated, at the date of giving such purported Notice of
Termination, by mutual consent of the Company and the Executive and, except
as provided in the last preceding sentence, the Executive shall be entitled
to receive only those payments and benefits which he would have been entitled
to receive at such date otherwise than under this Agreement.
11. DISPUTES; LEGAL FEES AND EXPENSES. (a) Any dispute or
controversy arising under or in connection with this Agreement shall be
settled exclusively and finally by expedited arbitration, conducted before a
single arbitrator in Minneapolis, Minnesota, in accordance with the rules
governing employment disputes then in effect of the American Arbitration
Association. The arbitrator shall be approved by both the Company and the
Executive. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
(b) In the event that any claim by the Executive under this
Agreement is disputed, the Company shall pay all reasonable legal fees and
expenses incurred by the Executive in pursuing such claim, provided that the
Executive is successful as to at least part of the disputed claim by reason
of arbitration, settlement or otherwise.
12. CONFIDENTIAL INFORMATION; NONCOMPETITION. (a) The Executive
shall hold in a fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the Company or any
of its affiliated companies, and their respective businesses, (i) obtained by
the Executive during his employment by the Company or any of its affiliated
companies and (ii) not otherwise public knowledge (other than by reason of an
unauthorized act by the Executive). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior
written consent of the Company, unless compelled pursuant to an order of a
court or other body having jurisdiction over such matter, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it.
(b) It is mutually acknowledged that by virtue of Employee's
former positions with the Company and its subsidiaries, he has become
possessed of certain valuable and confidential information concerning the
customers, business methods, procedures and techniques of the Company and its
subsidiaries. It is further understood that Employee has developed contacts
among the customers of the Company and its subsidiaries, and it is mutually
understood and agreed that the customers of the Company and its subsidiaries
and the business methods and procedures and techniques developed by the
Company and its subsidiaries are valuable assets and properties of the
Company and its subsidiaries. Without limitation, it is also specifically
acknowledged that great trust on the part of the Company and its subsidiaries
has resided in
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Employee, since Employee's former duties have included involvement in the
management, promotion and development of the Company's business.
Accordingly, the parties deem it necessary to enter into the protective
covenants set forth below, the terms and conditions of which have been
negotiated by and between the parties hereto:
(i) Employee agrees that during the Retention Period and until the
first anniversary of the Date of Termination, he will not, directly or
indirectly, on his own behalf or on the behalf of any third party, perform
management, accounting, financial, marketing, sales, administrative or
executive duties, in any business conducted within the Territories (as
defined below) which engages in originating or purchasing automobile or truck
loans or leases from automobile or truck dealers, packaging such loans or
leases, reselling such loans or leases or servicing such loans or leases (the
"Restricted Activities"). As used in this Addendum, the term "Territories"
means any state in which any loans or leases originated or acquired by the
Company originated (determined by the location of the dealers from whom the
loans or leases were purchased or, in the case of loans or leases originated
by the Company, where the borrower or lessee resides).
(ii) Employee agrees that during the Retention Period and until
the first anniversary of the Date of Termination, he will not, directly or
indirectly, solicit, divert, take away or attempt to solicit, divert, or take
away from the Company, or any subsidiary, any of the dealers and other
sources from which the Company or any subsidiary acquires loans or leases or
from whom the loan or lease packages are received by the Company or any
subsidiary.
(iii) Employee agrees that during the Retention Period and until
the first anniversary of the Date of Termination, he will not, directly or
indirectly, on his own behalf or in the service or on behalf of others,
solicit, divert or hire away, or in any manner attempt to solicit, divert or
hire away any person employed by the Company or any subsidiary, whether or
not such employee is a full-time employee or a temporary employee of the
Company or any subsidiary, and whether or not such employment was pursuant to
a written or oral contract of employment and whether or not such employment
was for a determined period or was at will.
(c) Employee acknowledges that the provisions of this Section 12
constitute a material inducement to the Company to enter into the Agreement.
Employee further acknowledges that the Company's remedy at law for a breach
by him of the provisions of this Section 12 will be inadequate. Accordingly,
in the event of a breach or threatened breach by Employee of any provision of
this Section 12, the Company will be entitled to injunctive relief in
addition to any other remedy it may have. If any of the provisions of, or
covenants contained in, this Section 12 are hereafter construed to be invalid
or unenforceable in any jurisdiction, the same will not affect the remainder
of the provisions or the enforceability thereof in any other jurisdiction,
which will be given full effect, without regard to the invalidity or
unenforceability in such other jurisdiction. If any of the provisions of, or
covenants contained in, this Section 12 are held to be unenforceable in any
jurisdiction because of the duration or geographical scope thereof, the
parties agree that the court making such determination will have the power to
reduce the duration or geographical scope of such provision or covenant and,
in its reduced form, such
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provision or covenant will be enforceable; provided, however, that the
determination of such court will not affect the enforceability of this
Section 12 in any other jurisdiction.
(d) In no event shall an asserted violation of the provisions of
this Section 12 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement or under any other
agreement, plan or arrangement.
13. SUCCESSORS. (a) This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. The Company shall require any successor
to all or substantially all of the business and/or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation, acquisition
of stock, or otherwise, by an agreement in form and substance satisfactory to
the Executive, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent as the Company would be required to
perform if no such succession had taken place.
14. MISCELLANEOUS. (a) APPLICABLE LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Minnesota, applied without reference to principles of conflict of laws.
(b) AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) NOTICES. All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Xxxxx X. Xxxxxxxx
00000 Xxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
If to the Company: Olympic Financial Ltd.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Secretary
(with a copy to the attention of
the General Counsel)
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or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be
effective when actually received by the addressee.
(d) TAX WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, State or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(f) CAPTIONS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(g) POOLING TRANSACTIONS. The parties acknowledge that certain of
the provisions of this Agreement may grant to the Executive benefits in
excess of those granted to the Executive pursuant to the prior employment
agreement (the "Prior Agreement") superseded hereby pursuant to Section 2
hereof. The parties agree that (i) in the event the grant of any such
additional benefit would, in the opinion of Ernst & Young LLP or such other
nationally recognized accounting firm selected by the Company, prevent the
Company from receiving a pooling of interests treatment under Accounting
Principles Board Opinion No. 16, and (ii) in the further event that such a
pooling transaction shall be consummated by the Company and an acquiring
entity; then in such events, the Executive agrees that the grant of any such
additional benefits hereunder shall be amended as of the day prior to the
closing of such pooling transaction to the extent necessary to enable the
Company to gain pooling treatment under Accounting Principles Board Opinion
No. 16 for such transaction; provided such amendment shall not reduce any
such benefit such that it is less than that which was granted to the
Executive under the Prior Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf,
all as of the day and year first above written.
OLYMPIC FINANCIAL LTD.
By: /s/ [ILLEGIBLE]
------------------------------
Name:
----------------------------
Title: Chairman of the Board
----------------------------
/s/ Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx
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