Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is dated as of July 1, 2001,
between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Executive"), Ameritrans Capital Corporation
("Ameritrans"), and Elk Associates Funding Corporation ("Elk") (collectively,
Ameritrans and Elk are hereinafter referred to as the "Employer").
In consideration of the premises and the mutual covenants hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Employment of Executive.
Employer hereby agrees to employ Executive, and Executive hereby agrees to
be and remain in the employ of Employer, upon the terms and conditions
hereinafter set forth.
2. Employment Period.
Subject to the earlier termination as provided in section 5, the term of
Executive's employment under this Agreement shall commence on the date hereof
(the "Commencement Date"), and shall continue for a period of five (5) years
(the "Initial Employment Period"). Unless Employer gives notice of non- renewal
at least six (6) months prior to the expiration of the Initial Employment Period
or Executive gives notice of non-renewal at least six (6) months prior to the
expiration of the Initial Employment Period, the term of this Agreement shall be
extended for an additional five (5) year period beyond the end of the Initial
Employment Period on the same terms and conditions in effect under this
Agreement at the time of extension and providing for an annual base salary equal
to the Base Salary (as hereinafter defined) in effect at the time of renewal,
plus an annual increase each year thereafter during the renewal term of the
greater of (i) four percent (4%) or (ii) the increase in the Consumer Price
Index during each such year (the Initial Employment Period and any extension
thereof is hereafter referred to as the "Employment Period"). If either Employer
or Executive elects not to renew the Agreement by providing the other party with
a notice of non-renewal, then the Agreement shall terminate as of the fifth
anniversary of the Effective Date, and the consulting agreement between Employer
and Executive in the form attached hereto as Exhibit A (the "Consulting
Agreement"), shall automatically become effective.
3. Duties and Responsibilities.
3.1. General. During the Employment Period, Executive shall have the title
of Chairman and President of the Employer and shall have duties commensurate
with his office and title as the chief executive officer of each of Ameritrans
and Elk. Executive shall report directly to and take direction from the Board of
Directors of the Employer (the "Board"). Executive understands that he will be
required to work with and coordinate certain business activities with other
executives of the Employer in connection with certain projects as directed by
the Board. Executive shall devote all of his business time and expend his best
efforts, energies, and skills to the Employer; provided, however, that (i)
during the Employment Period, Executive shall be permitted to establish and
report to an office located in any state in which a substantial amount of
Employer's business is conducted, (ii) Executive shall be allowed to devote such
reasonable time as he deems necessary to his personal and family business
matters and to fulfill his duties as a member of the Board of Trustees of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ University and as a member of the Investment Committee of the Board
of Trustees, (iii) Executive shall be allowed to devote such reasonable
time as he deems necessary to fulfill his duties as a member of the Board of
Trustees of the ▇▇▇▇▇▇ Institute and any committees on which Executive may
serve, (iv) Employer acknowledges that Executive currently is and may remain as
a director and an officer or employee of Gemini Capital Corporation, and (iv)
Executive shall be permitted to serve as an officer and director of, or as "of
counsel" and shall devote only nominal time to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ PC
("GW&F") so long as such time, attention, and duties in (i), (ii), (iii), and
(iv), above, do not (A) interfere with his duties and responsibilities to
Employer or (B) violate his obligations under Sections 7 and 8, herein, or any
duty, consistent with his status with Employer, as he may be assigned from time
to time by the Board.
4. Compensation and Related Matters.
4.1. Base Salary. For each of the twelve-month periods during the
Employment Period, commencing with the twelve-month period beginning on the
Effective Date (each such period, an "Employment Year"), Employer shall pay to
Executive a base salary equal to $240,000 for the first Employment Year,
$255,000 for the second Employment Year, $270,000 for the third Employment Year,
$295,000 for the fourth Employment Year, and $310,000 for the fifth Employment
Year (with respect to each Employment Year, the "Base Salary"). The Base Salary
for each Employment Year shall be payable in accordance with the normal payroll
procedures of Employer.
4.2. Annual Bonus. For each fiscal year during the Employment Period (each,
a "Bonus Year"), Executive shall be eligible to receive a bonus based on the
achievement of corporate and/or individual performance objectives set by the
Board for such Bonus Year at the discretion of the Board (a "Bonus"). Any Bonus
earned for any Bonus Year shall be payable promptly following the determination
thereof, but in no event later than 45 days after the end of such year.
4.3. Other Benefits. During the Employment Period, subject to, and to the
extent Executive is eligible under their respective terms, Executive shall be
entitled to receive such benefits as are, or are from time to time hereafter,
generally provided by Employer to Employer's senior management employees
(including any executive vice president or chief financial officer) (other than
those provided under or pursuant to separately negotiated individual employment
agreements or arrangements) under any pension or retirement plan, disability
plan, or insurance, group life insurance, family medical and dental insurance,
accidental death and dismemberment insurance, travel accident insurance, or
other similar plan or program of Employer. In addition, during the Employment
Period, Employer shall (i) reimburse Executive for the cost of the annual
premiums (up to $5,000 per year) on term life insurance on Executive's life
equal to $500,000 of coverage under Executive's current life insurance policy
and (ii) assign to Executive upon termination of the Employment Period the
existing life insurance policies described on Exhibit B, hereto. During the
Employment Period, Employer shall also reimburse Executive for reasonable costs
with respect to the following: (i) the lease of a car (up to $900/month); (ii)
parking for Executive's automobile in Manhattan (if Executive drives to work (up
to $450/month); (iii) tolls and gas for the automobile in connection with
commuting to work; (iv) automobile insurance for one car (up to $2,200/year);
(v) use of a cell phone and home telephone for business purposes (up to
$300/month), (iv) reimbursement of $5,500 per year for the premium on
Executive's disability policy, (vii) reimbursement of $5,000 toward Executive's
country club dues, (viii) make regular contributions to Executive's SEP ▇▇▇
account of 15% of Executive Base Salary and Bonus, subject to limitations under
the plan, and (ix) reimburse Executive for expenses incurred in connection with
travel, meals, and incidentals relating to activities as a trustee of the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ University and The ▇▇▇▇▇▇ Institute.
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4.4. Expense Reimbursement. Employer shall reimburse Executive for all
business expenses reasonably incurred by him in the performance of his duties
under this Agreement upon his presentation of signed and itemized accounts of
such expenditures, all in accordance with Employer's procedures and policies as
adopted and in effect from time to time and applicable to its senior management
employees.
4.5. Vacations. Executive shall be entitled to 30 business days vacation
for each calendar year during the Employment Period, which vacations shall be
taken at such time or times as shall not unreasonably interfere with Executive's
performance of his duties under this Agreement. Time spent on services performed
as a trustee shall be considered business-related.
4.6. Stock Options. In order to provide further incentive to Executive and
align the interests of Executive with those of the stockholders of Employer,
Employer shall grant to Executive, from time to time, options to purchase shares
of common stock of Employer, par value per share $.01 (the "Common Stock"), in
an amount determined by the Company's board of directors or committee thereof,
as the case may be. The options shall be granted pursuant to the Employer's
existing Stock Option Plan consistent with the terms and conditions therein. The
options shall have such other terms and conditions as set forth in a stock
option agreement. Employer shall register the sale of any Common Stock to
Executive upon the exercise of any such options pursuant to a Registration
Statement on Form S-8, provided that Form S-8 is available to Employer under the
Securities Act of 1933 and the rules and regulations of the Securities and
Exchange Commission at the time Executive exercises such options.
4.7. Office Space; Resources. Employer shall provide Executive with
sufficient office space, furnishings, equipment, computer resources, and
supplies considered reasonable and necessary for Executive to carry out his
duties.
5. Termination of Employment Period.
5.1. Termination Without Cause; Voluntary Termination by Executive.
Employer may, by notice to Executive at any time during the Employment Period,
terminate the Employment Period without Cause (as defined below). The effective
date of such termination of Executive from Employer shall be the date that is
thirty (30) days following the date on which such notice is given, except as
otherwise specifically provided herein. Executive may, by notice to Employer at
any time during the Employment Period, voluntarily resign from Employer and
terminate the Employment Period. The effective date of such termination of
Executive from Employer shall be the date that is thirty (30) days following the
date on which such notice is given.
5.2. By Employer for Cause. Employer may, at any time during the Employment
Period, by notice to Executive, terminate the Employment Period for "Cause." As
used herein, "Cause" shall mean (i) incompetence, fraud, personal dishonesty,
defalcation, or acts of gross negligence or gross misconduct on the part of
Executive in the course of his employment, (ii) substantial and continued
failure by Executive to perform his duties hereunder, (iii) use of alcohol by
Executive or his illegal use of drugs (including narcotics) which in either case
is, or could reasonably be expected to become, materially injurious to the
reputation or business of Employer or which impairs, or could reasonably be
expected to impair, the performance of Executive's duties hereunder, (iv)
Executive's conviction by a court of competent jurisdiction of, or pleading
"guilty" or "no contest" to, (x) a felony, or (y) any other criminal charge
(other than minor traffic violations) which has or could reasonably be expected
to have a material adverse impact on Employer's reputation and standing in the
community, or (v) Executive's violation of any of the provisions of Sections 7
or 8, herein. Any notice given by Employer pursuant to this Section
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5.2 shall specify in writing in reasonable detail the event or the nature of
Executive's action or inaction that is the cause for giving such notice.
Executive will have 30 days to cure, to the reasonable satisfaction of Employer,
any action or inaction charged by Employer for Cause under (ii) or (v), above.
In the event of a termination of the Employment Period for Cause under (i),
(iii), or (iv), above, the Employment Period shall terminate immediately upon
notice by Employer of termination for Cause and the reason therefor, unless such
actions or inactions can be cured and Executive has satisfactorily cured such
actions or inactions.
5.3. By Executive for Good Reason.
(a) Executive may, at any time during the Employment Period by notice
to Employer, terminate the Employment Period under this Agreement for "Good
Reason" (as defined below). For the purposes hereof, Executive shall have
"Good Reason" to terminate employment with Employer on account of any of
the following events without Executive's consent: (i) any reduction in the
Base Salary; (ii) the failure of Employer to provide employee benefits
consistent with Section 4.3, herein; (iii) any requirement by Employer that
Executive report to anyone other than the Board; or (iv) a "Change in
Control" (as defined below); provided, however, that the circumstances set
forth in this Section 5.3 shall not be Good Reason if within 30 days of
notice by Executive to Employer, Employer cures such circumstances. The
effective date of such termination of Executive from Employer shall be the
date that is thirty (30) days following the date on which such notice is
given.
(b) For purposes of this Section 5.3, a "Change in Control" shall be
deemed to have taken place if any "Person" (as such term is defined in
Section 3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange Act")
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes
a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing 50%
or more of the combined voting power of Employer's then outstanding
securities eligible to vote for the election of the Board (the "Voting
Securities"); provided, however, that the event described in this paragraph
(b) shall not be deemed to be a Change in Control by virtue of any of the
following acquisitions: (i) by Employer or any subsidiary of Employer in
which Employer owns more than 50% of the combined voting power of such
entity (a "Subsidiary"), (ii) by any employee benefit plan (or related
trust) sponsored or maintained by Employer or any Subsidiary, (iii) by any
underwriter temporarily holding Employer's Voting Securities pursuant to an
offering of such Voting Securities, or (vi) pursuant to any acquisition by
Executive or any group or persons including Executive (or any entity
controlled by Executive or any group of persons including Executive).
5.4. Disability. During the Employment Period, if, as a result of physical
or mental incapacity or infirmity, Executive shall be unable to perform his
duties under this Agreement for (i) a continuous period of at least 180 days, or
(ii) periods aggregating at least 180 days during any period of 12 consecutive
months (each, a "Disability Period"), and at the end of the Disability Period
there is no reasonable probability that Executive can promptly resume his duties
hereunder, Executive shall be deemed disabled (the "Disability") and Employer,
by notice to Executive, shall have the right to terminate the Employment Period
for Disability at, as of, or after the end of the Disability Period. The
existence of the Disability shall be determined by a reputable, licensed
physician selected by Executive in good faith, whose determination shall be
final and binding on the parties. Executive shall cooperate in all reasonable
respects to enable an examination to be made by such physician.
5.5. Death. The Employment Period shall end on the date of Executive's
death.
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5.6. Any termination under this Section 5 shall act as a notice of
non-renewal of this Agreement pursuant to Section 2 herein.
6. Termination Compensation.
6.1. Termination Without Cause by Employer. If the Employment Period is
terminated by Employer without Cause pursuant to the provisions of Section 5.1
hereof, Employer will pay to Executive a lump-sum payment in an amount equal to
(i) Executive's Base Salary through the date of termination and an amount equal
to the sum of the Base Salary multiplied by the number of years (and fractional
portions thereof) remaining in the Employment Period, and (ii) an amount equal
to all of the consulting fees payable under the terms of the consulting
agreement entered into by and between Employee and Executive dated as of July 1,
2001 (the "Consulting Agreement") (the sum of (i) and (ii), collectively, shall
hereinafter be referred to as the "Severance Payment"); provided, however, the
Severance Payment shall not be less than an amount equal to three (3) years of
the Executive's Base Salary as in effect at the time this Agreement is
terminated as provided herein, plus the Bonus paid, if any, for the most recent
Bonus Year. In calculating the Severance Payment, such payment shall include any
adjustments in the Base Salary (as set forth in Section 4.1) that would have
occurred during the remainder of the Employment Period, had Executive's
employment not been terminated. Employer shall have the obligation to continue
the benefits provided for in Section 4 past the date of termination through the
balance of the Employment Period remaining at the time of termination.
6.2. Termination by Executive for Good Reason. If the Employment Period is
terminated by Executive for Good Reason pursuant to the provisions of Section
5.3, hereof, Employer will pay to Executive in a lump-sum the Severance Payment,
as set forth in Section 6.1, hereof; provided, however, the Severance Payment
shall not be less than an amount equal to three (3) years of the Executive's
Base Salary, as in effect at the time this Agreement is terminated as provided
herein, plus the Bonus for the most recent Bonus Year.
6.3. Notice of Non-Renewal by either Employer or Executive; or Voluntary
Termination by Executive. If the Employment Period terminates due to (i) notice
of non-renewal from Employer or Executive prior to the expiration of the Initial
Employment Period or (ii) due to the voluntary resignation of Executive at any
time during the Employment Period, then upon the occurrence of such event, the
Consulting Agreement shall automatically become effective.
6.4. Certain Other Terminations. If the Employment Period is terminated by
Employer on account of Executive's Disability pursuant to the provisions of
Section 5.4, or by death, pursuant to the provisions of Section 5.5, Employer
shall pay to Executive, within thirty (30) calendar days of the date of
termination, Executive's Base Salary through the date of termination. Provided
the date of termination under Section 5.4. or 5.5 is after the end of a calendar
year for which a Bonus is payable, but prior to the date of payment, Employer
shall also pay to Executive or Executive's representatives, as the case may be,
when due pursuant to provisions of Section 4.2 hereof, the Bonus for such Bonus
Year. In the event that the Employment Period is terminated by Employer on
account of Disability pursuant to the provisions of Section 5.4 or on account of
death pursuant to the provisions of Section 5.5 and provided Executive has been
employed for at least six months during the Bonus Year of termination, Employer
shall also pay to Executive a portion of the Bonus for the Bonus Year of
termination prorated through the date of termination. Employer shall have no
obligation to continue any other benefits provided for in Section 4 past the
date of termination.
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6.5. Payment; No Other Termination Compensation. Any payment pursuant to
this Section 6, with respect to which a payment date has not otherwise been
specified, shall be made in a lump sum within ten (10) business days following
the date of such termination.
7. Confidentiality.
Unless otherwise required by law or judicial process, Executive shall
retain in confidence during the Employment Period and after termination of
Executive's employment with Employer pursuant to this Agreement all confidential
information known to Executive concerning Employer and its businesses. The
obligations of Executive pursuant to this Section 7 shall survive the expiration
or termination of this Agreement.
8. Noncompetition.
During the Employment Period, Executive shall not directly or indirectly,
whether by way of employment, consulting, advising, ownership, partnership,
joint venture, or other method, engage in any Competitive Activity (as defined
below). "Competitive Activity" shall exclude those activities described in
Section 3.1, hereof, and shall include business activity which is the same as or
substantially similar to or is or would be competitive with the business
activity in which Employer is engaged.
9. Nonsolicitation.
During the Employment Period and for a period of one year thereafter (the
"Nonsolicitation Period"), Executive shall not directly or indirectly solicit to
enter into the employ of any other Entity, or hire, any of the employees of
Employer. During the Employment Period, and for a period of one year thereafter,
Executive shall not, directly or indirectly, solicit, hire, or take away or
attempt to solicit, hire, or take away (i) any customer or client of Employer or
(ii) any former customer or client (that is, any customer or client who ceased
to do business with Employer during the three (3) years immediately preceding
such date) of Employer or encourage any customer or client of Employer to
terminate its relationship with Employer without Employer's prior written
consent. The obligations of Executive pursuant to this Section 9 shall survive
the expiration or termination of this Agreement.
10. Successors; Binding Agreement.
This Agreement and all rights of Executive hereunder shall inure to the
benefit of and be enforceable by Executive and Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
divisees, and legatees. If Executive should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee, or other beneficiary or, if there be
no such beneficiary, to Executive's estate.
11. Survivorship.
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
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12. Miscellaneous.
12.1. Notices. Any notice, consent, or authorization required or permitted
to be given pursuant to this Agreement shall be in writing and sent to the party
for or to whom intended, at the address of such party set forth below, by
registered or certified mail, postage paid (deemed given five days after deposit
in the U.S. mails) or personally delivered or sent by facsimile transmission
(deemed given upon receipt), or at such other address as either party shall
designate by notice given to the other in the manner provided herein.
If to Employer: Ameritrans Capital Corporation
Elk Associates Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
If to Executive: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
12.2. Taxes. Employer is authorized to withhold (from any compensation or
benefits payable hereunder to Executive) such amounts for income tax, social
security, unemployment compensation, and other taxes as shall be necessary or
appropriate in the reasonable judgment of Employer to comply with applicable
laws and regulations.
12.3. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without reference
to the principles of conflicts of laws therein.
12.4. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
the city in which Employer's main corporate headquarters is then located in
accordance with the rules of the American Arbitration association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
12.5. Headings. All descriptive headings in this Agreement are inserted for
convenience only, and shall be disregarded in construing or applying any
provision of this Agreement.
12.6. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which, together, shall
constitute one and the same instrument.
12.7. Severability. If any provision of this Agreement, or any part
thereof, is held to be unenforceable, the remainder of such provision and this
Agreement, as the case may be, shall nevertheless remain in full force and
effect.
12.8. Entire Agreement and Representation. This Agreement contains the
entire agreement and understanding between Employer and Executive with respect
to the subject matter hereof. No representations or warranties of any kind or
nature relating to Employer or its several businesses, or relating to Employer's
assets, liabilities, operations, future plans, or prospects have been made by or
on
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behalf of Employer to Executive. This Agreement supersedes any prior agreement
between the parties relating to the subject matter hereof.
12.9. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision or provisions of this Agreement, which shall remain in full
force and effect. If any provision of this Agreement is held to be invalid,
void, or unenforceable in any jurisdiction, any court or arbitrator so holding
shall substitute a valid, enforceable provision that preserves, to the maximum
lawful extent, the terms and intent of such provisions of this Agreement. If any
of the provisions of, or covenants contained in, this Agreement are hereafter
construed to be invalid or unenforceable in any jurisdiction, the same shall not
affect the remainder of the provisions or the enforceability thereof in any
other jurisdiction, which shall be given full force and effect, without regard
to the invalidity or unenforceability is such other jurisdiction. Any such
holding shall affect such provision of this Agreement, solely as to that
jurisdiction, without rendering that or any other provisions of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction. If any covenant
should be deemed invalid, illegal, or unenforceable because its scope is
considered excessive, such covenant will be modified so that the scope of the
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal, and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
AMERITRANS CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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ELK ASSOCIATES FUNDING CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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