EXHIBIT 10.4
EMPLOYMENT AGREEMENT
WHEREAS, Norwest Corporation intends to enter into an Agreement and Plan of
Reorganization dated the date hereof ("Agreement") with Aman Collection
Services, Inc., a South Dakota corporation ("Aman"); and
WHEREAS, contingent upon final closing of the reorganization, Norwest Financial,
Inc., ("Employer") a wholly owned subsidiary of Norwest Corporation and the
assignee of Norwest Corporation's rights under the Agreement, desires to employ
Xxxxxx X. Xxxx ("Employee") and Employee wishes to be so employed.
NOW THEREFORE, this Employment Agreement is hereby entered into this 21st day of
March, 1996, by and between Employee and Employer.
1. EMPLOYMENT. Employer agrees to employ Employee, and Employee agrees to be
employed by Employer, as an executive of Aman for a period commencing at
the Effective Date of the Merger, as defined in the Agreement, and expiring
upon the earlier of three years from that date or upon Employee's ceasing
to perform executive services for Employer for any reason, including
without limitation, Employee's death (the "Employment Period"). This
Employment Agreement shall be entirely null and void if said reorganization
is not consummated. The execution of this Employment Agreement terminates
any prior employment contracts (written or implied) which Employee has with
Aman, contingent upon consummation of the reorganization. During the
Employment Period, Employee will devote his full business hours and
energies to the business of Employer to accomplish all duties reasonably
assigned, will perform all reasonable business duties assigned to Employee
by Employer, will devote his best efforts to advance the interests of
Employer, and will not devote any time or energy to the efforts of any
other business, except reasonable investment and charitable activities.
2. COMPENSATION.
(a) For services performed by Employee for Employer during each year of
the Employment Period, Employer will pay Employee a gross annual base
salary of $135,000 ; Employee shall receive an annual increase of not
less than a cost-of-living increase based on the Consumer Price
Index-All Urban Consumers.
(b) (A) In addition to base salary, Employee shall be entitled to an
annual bonus equal to 5% of the amount by which pre-tax income of
Aman for each calendar year (excluding expenses accrued pursuant
to this or similar agreements in computing pre-tax income)
exceeds the amounts shown below, determined in accordance with
generally accepted accounting principles used in Aman's financial
statements for the year ended December 31, 1995, consistently
applied, and excluding the application of any corporate overhead:
1996 - $4,877,000
1997 - $6,067,000
1998 - $6,685,000
1999 - $7,457,000
Such bonus for 1996 shall be payable with respect to an entire
year even though this Agreement shall be effective for only a
portion of such year. Such bonus for 1999 shall be computed by
prorating for the number of full months that Employee is employed
by Employer during 1999. Provided, however, the bonus to be paid
for any year shall not exceed 90% of Employee's salary for that
year. The bonus shall be earned as of December 31 of each year.
(B) Except as provided herein, (i) each year's bonus shall be paid in
cash in three equal annual installments, (ii) the first
installment shall be paid on the first day of March in the year
following the year for which the bonus was earned, and (iii) the
remaining installments of the award shall be paid on the first
day of March of the next two succeeding years.
(C) If (i) Employee's employment by Employer ends prior to expiration
of three (3) years from the Effective Date of the Merger because
of voluntary termination by Employee, other than with Good
Reason, as defined below, or because of involuntary termination
for Cause, as defined below, then Employee's rights to any unpaid
bonus(es) shall be canceled and forfeited; provided, however, if
Employee's termination date under this paragraph (C) is on or
after December 31 of a year but before March 1 of the next
following year, Employee shall be entitled to receive the
installment(s) of his bonus(es) payable on such March 1 of such
next following year but in no case shall any subsequent
installment(s) of any such bonus(es) (that would have become
payable after such March 1 had Employee remained employed by
Employer) be paid to Employee.
(D) If Employee's employment by Employer is continued by Employee
after expiration of three (3) years from the Effective Date of
the Merger, and thereafter Employee's employment is terminated
for Cause, then Employee's rights to any unpaid bonus(es) shall
be forfeited and canceled; provided, however, if Employee's
termination date under this paragraph (D) is on or after December
31 of a year but before March 1 of the next following year,
Employee shall be entitled to receive the installment(s) of his
bonus(es) payable on such March 1 of such next following year but
in no case shall any subsequent installment(s) of any such
bonus(es) (that would have become payable after such March 1 had
Employee remained employed by Employer) be paid to Employee.
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(E) If Employee's employment by Employer ends prior to expiration of
three (3) years from the Effective Date of the Merger because of (x)
voluntary termination by Employee with Good Reason or (y)
involuntary termination other than for Cause or Unacceptable
Performance, Employer shall pay to Employee on the last day of the
Employment Period a lump-sum payment, without discount, equal to the
aggregate of such base salary during the three-year term (less any
salary payments previously made and without giving effect to any
cost of living increases to take effect in future years) plus the
aggregate bonus(es) earned, less any bonus payments previously made,
during the Employment Period, without discount.
(F) If Employee's employment ends other than because of (x) the
voluntary termination by Employee with Good Reason or (y) the
involuntary termination other than for Cause or Unacceptable
Performance, Employer shall continue to pay Employee's salary
through the last day of the month in which such employment ends.
(G) If Employee's employment by Employer expires due to death or
disability during a year, any bonus that Employee would have been
paid if his Employment Period had not expired during the year shall
be computed by prorating for the number of full months in the year
during the Employment Period, and shall be paid on March 1 of the
next following year.
(c) Employer shall have the right to offset any amounts owed by Employee
to Employer under the Indemnification Agreement signed in connection
with the Agreement against any bonus earned by Employee under this
paragraph 2.
(d) Employee shall participate in any Aman benefits as Employer may
establish. During the Employment Period, Employee shall receive paid
vacation in accordance with Employer's vacation policy, giving credit
for employment by Aman, with said vacation to be taken at times and in
increments reasonably agreed to by Employer and Employee.
3. RESTRICTIVE COVENANTS. In consideration for Norwest Corporation's
consummation of the Agreement and the promises contained in this
Employment Agreement, Employee agrees as set forth below in this paragraph
3.
(a) Employee shall not, directly or indirectly, own, manage, operate,
invest in, control, be employed by, participate in, be a financial
sponsor of, provide consultation services to, or be connected in any
manner with, the ownership, management, or control of any other
collection services business or any other financial services business
anywhere in the United States of America, provided, however, that
nothing in this Agreement shall restrict Employee from investing in
any investment company or in not more than 5% of the common equity of
any publicly owned company. The restrictions in this paragraph 3(a)
shall be in full
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force and effect from the Effective Date of the Merger until three
years after Employee ceases performing services for Employer, whether
under this Employment Agreement or otherwise, for any reason
whatsoever.
(b) Employee shall never use in connection with any business the name
"Aman" or any form of, modification of, or any derivation of any of
said name, or any trademark, servicemark, tradename, slogan, logo or
the like that is or has been used by Aman Collection Services, Inc.
(c) Employee acknowledges and recognizes that Employee will be employed by
Employer in a confidential relationship and may receive and have access
to the confidential business information, customer names, contracts and
other customer data, business methods, techniques and trade secrets of
Employer ("Confidential Information"). Employee may develop ideas,
conceptions, inventions, processes, methods, products and improvements;
and Employee may receive disclosures of ideas, conceptions, inventions,
processes, methods, productions and improvements made by other
employees of Employer ("Employer Inventions"). Employee may
participate with Employer in improving and developing Confidential
Information and Employer Inventions. Confidential Information and
Employer Inventions developed on behalf of Employer are neither
commonly known or readily accessible to others and are used by Employer
in its business to obtain a competitive advantage over Employer's
competitors who do not know or use the Confidential Information or
Employer Inventions. Protection of the Confidential Information and
Employer Inventions against unauthorized disclosure and use is of
critical importance to Employer in maintaining its competitive
position. Employee agrees that Employee will not, at any time, during
or after the Employment Period, make an independent use of, or disclose
to any other person or organization, except as authorized by Employer
in writing, any Confidential Information or Employer Inventions. Upon
termination of the Employee's employment for any reason, Employee shall
promptly deliver to Employer all Confidential Information and Employer
Inventions, and all copies thereof, that may be in the possession of,
or under the control of, Employee.
(d) Employee shall never, directly or indirectly, influence or advise any
other party to employ anyone who is or was in the service or employ of
Employer at any time during the preceding three years, nor shall
Employee influence or advise any such employee to leave the service or
employ of Employer except when the employee is being terminated by
Employer.
4. DEFINITIONS.
(a) Cause means: violation of a company policy including, without
limitation, Employer's Code of Ethics; personal dishonesty, misconduct,
or a breach of fiduciary duty; or failure to perform any obligation
contained in this Employment Agreement continued for 30 days without
correction after notice specifically
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identifying the obligation not being performed; or a failure to comply
with the terms of the Indemnification Agreement signed in connection
with the Agreement; or violation of any criminal law (other than
traffic violations or similar minor offenses).
(b) Unacceptable Performance means failure to attain reasonable business
goals established by Employer continued for 30 days without correction
after notice specifically identifying the obligations not being
performed.
(c) Good Reason means (i) the assignment to the Employee of any duties
inconsistent in any respect with the Employee's position (including
status, office, title and reporting requirement), authority, duties or
responsibilities or any other action by the Employer which results in a
diminution in such position, authority, duties or responsibilities,
excluding for this purpose isolated, insubstantial and inadvertent
actions not taken in bad faith and which are remedied by the Employer
promptly after receipt of notice thereof given by the Employee; (ii)
the Employer's requiring the Employee to be based in any city other
than Aberdeen, SD; (iii) any purported termination by the Employer of
the Employee's employment otherwise than for Cause or Unacceptable
Performance; (iv) Employer's failure to perform any obligation
contained in this Employment Agreement continued for 30 days without
correction after notice specifically identifying the obligation not
being performed.
5. INJUNCTIVE RELIEF. Employee understands that Employer's remedy at law for
any breach of any of Employee's obligations under this Employment
Agreement would be inadequate and agrees that temporary and permanent
injunctive relief may be granted in any proceeding which may be brought to
enforce any provisions of this Employment Agreement, without the necessity
of proof of actual damage. Employee agrees that injunctive relief is not
an exclusive remedy and Employer shall have the right to seek, in addition
to injunctive relief any remedy in law or equity.
6. DAMAGES. Neither Employer nor Employee shall seek nor be entitled to any
punitive damages from the other in any actions arising under this
Employment Agreement.
7. SEVERABILITY. If the scope of any restriction contained herein is too
broad to permit enforcement of the restriction to its full extent,
including, without limitation, each restriction in paragraph 3 above, then
the restriction will be enforced to the maximum extent permitted by law,
and Employee agrees that the scope of any restrictions may be judicially
modified accordingly, in any proceeding brought to enforce the restriction
without affecting the enforceability of the remainder of this Agreement.
8. BINDING EFFECT. This Employment Agreement constitutes the entire
understanding of the parties regarding Employee's employment, may be
modified only in writing
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and will bind and inure to the benefit of Employee and Employee's personal
representative and Employer and Employer's successor and assigns.
9. GOVERNING LAW AND VENUE. This Employment Agreement shall be governed by
the law of the State of Iowa, except Iowa law on conflicts of law. The
venue of any action arising in connection with this Employment Agreement
shall be in the State of Iowa, except that Employer may, at its option,
bring any action seeking an injunction and arising in connection with
paragraph 3 of this Employment Agreement in the State of South Dakota.
Employee shall not attempt to raise any claim arising under any other
paragraph of this Employment Agreement in any such action for an
injunction brought in South Dakota.
WHEREAS, the parties hereto have executed this Employment Agreement as of the
date and year first above written.
NORWEST FINANCIAL, INC.
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxx
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Employee Title: Senior Vice President
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