Employment Agreement with Craig J. Brunet
Exhibit
10.3
NEWTEK
BUSINESS SERVICES, INC.
Employment
Agreement with
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PREAMBLE.
This
Agreement entered into this 13th day of July 2006, by and between Newtek
Business Services, Inc. (the “Company”) and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Executive”),
effective immediately.
WHEREAS,
the
Executive is to be employed by the Company as an Executive Vice President;
and
WHEREAS,
the
parties desire by this writing to set forth the employment relationship of
the
Company and the Executive.
NOW,
THEREFORE,
it is
AGREED
as
follows:
1. Defined
Terms
When
used
anywhere in the Agreement, the following terms shall have the meaning set forth
herein.
(a) “Board”
shall
mean the Board of Directors of the Company.
(b) “Change
in Control”
shall
mean any one of the following events: (i) the acquisition of ownership, holding
or power to vote 50% or more of the Company’s voting stock, (ii) the acquisition
of the ability to control the election of a majority of the Company’s directors,
(iii) the acquisition of a controlling influence over the management or policies
of the Company by any person or by persons acting as a “group” (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934), or (iv) during
any period of two consecutive years, individuals (the “Continuing Directors”)
who at the beginning of such period constitute the Board of Directors of the
Company (the “Existing Board”) cease for any reason to constitute at least one
half thereof, provided that any individual whose election or nomination for
election as a member of the Existing Board was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be considered a
Continuing Director. For purposes of this paragraph only, the term “person”
refers to an individual or a corporation, partnership, trust, association,
joint
venture, pool, syndicate, sole proprietorship, unincorporated organization
or
any other form of entity not specifically listed herein.
(c) “Code”
shall
mean the Internal Revenue Code of 1986, as amended from time to time, and as
interpreted through applicable rulings and regulations in effect from time
to
time.
(d) “Code
§280G Maximum”
shall
mean the product of 2.99 and the Executive’s “base amount” as defined in Code
§280G(b)(3).
(e) “Company”
shall
mean Newtek Business Services, Inc., and any successor to its
interest.
(f) “Effective
Date”
shall
mean the date of execution referenced in the Preamble of this
Agreement.
(g) “Executive”
shall
mean ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(h) “Good
Reason”
shall
mean any of the following events, which has not been consented to in advance
by
the Executive in writing: (2) the requirement that the Executive perform his
principal executive functions on a permanent and regular basis more than seventy
five (75) miles from his primary office (New York, NY) as of the Effective
Date;
(2) a material reduction in the Executive’s base compensation as the same may be
increased from time to time; (3) the failure by the Company to continue to
provide the Executive with compensation and benefits provided for on the
Effective Date, as the same may be increased from time to time, or with benefits
substantially similar to those provided to him under any of the Executive
benefit plans in which the Executive now or hereafter becomes a participant,
or
the taking of any action by the Company which would directly or indirectly
reduce any of such benefits or deprive the Executive of any material fringe
benefit enjoyed by him; (4) the assignment to the Executive of duties and
responsibilities materially different from those associated with his position
on
the Effective Date; and (5) a material diminution or reduction in the
Executive’s responsibilities or authority in connection with his employment with
the Company, except for the well-being of the Company in the judgment of the
Board.
(i) “Just
Cause”
shall
mean the Executive’s (1) willful misconduct, (2) breach of fiduciary duty, (3)
intentional failure to perform stated duties, conviction of a felony, (4)
conviction of a misdemeanor punishable by imprisonment of not less than 6
months, (5) performance of duties in a negligent or reckless manner, (6)
material breach of any provision of this Agreement.
2. Employment.
The
Executive is employed as an Executive Vice President of Strategic Planning
and
Marketing of the Company. The Executive shall render such management services
for the Company and its affiliates as are customarily performed by persons
situated in a similar executive capacity and which are consistent with the
duties of a senior executive manager. The Executive shall report to the Chief
Executive Officer. The Executive shall, with respect to all matters to which
he
devotes attention, meet with and communicate regularly with other senior
management of the Company and its subsidiaries. The Executive shall also
promote, by entertainment or otherwise, as and to the extent permitted by law,
the business of the Company and its subsidiaries. The Executive’s other duties
shall be such as the Company's Chief Executive Officer may from time to time
reasonably direct, including normal duties as an officer of the Company,
participation on an executive management committee of the Company for so long
as
so constituted by the Chief Executive Officer, and election and/or appointment
as a board member or officer of the Company’s current and future principal
business subsidiaries.
3. Base
Compensation.
The
Company agrees to pay the Executive during the term of this Agreement a salary
at the rate of $240,000 per annum, payable in cash not less frequently than
monthly. Additionally, the Board shall review, not less often than annually,
the
rate of the Executive’s salary and may decide to further increase his
salary.
4. Benefits.
(a) Participation
in Retirement, Medical and Other Plans.
The
Executive shall participate in any plan that the Company maintains for the
benefit of its employees if the plan relates to (i) pension, profit-sharing,
or
other retirement benefits, (ii) medical insurance or the reimbursement of
medical or dependent care expenses, or (iii) other group benefits, including
disability and life insurance plans.
(b) Executive
Benefits; Expenses.
The
Executive shall participate in any fringe benefits which are or may become
available to the Company’s senior management Executives, including for example
incentive compensation plans, club memberships, and any other benefits which
are
commensurate with the responsibilities and functions to be performed by the
Executive under this Agreement. The Executive shall be reimbursed for all
reasonable out-of-pocket business expenses which he shall incur in connection
with his services under this Agreement upon substantiation of such expenses
in
accordance with the policies of the Company, including the Company’s Employee
Handbook and Code of Conduct.
5. Term.
The
Company hereby employs the Executive, and the Executive hereby accepts such
employment under this Agreement, for the period commencing on the Effective
Date
and ending on December 31, 2007 or such earlier date as is determined in
accordance with Section 10 (the “Term”).
6. Loyalty;
Non-competition.
(a) During
the period of his employment hereunder and except for illnesses, reasonable
vacation periods, and reasonable leaves of absence, the Executive shall devote
substantially all his full business time, attention, skill, and efforts to
the
faithful performance of his duties hereunder; provided, however, from time
to
time, Executive may serve on the boards of directors of, and hold any other
offices or positions in, companies or organizations, at the request of the
Company or which will not present, in the opinion of the Board, any conflict
of
interest with the Company or any of its subsidiaries or affiliates, nor
unfavorably affect the performance of Executive’s duties pursuant to this
Agreement, nor violate any applicable statute, regulation or the CPR. “Full
business time” is hereby defined as that amount of time usually devoted to like
companies by similarly situated executive officers. During the term of his
employment under this Agreement, the Executive shall not engage in any business
or activity contrary to the business affairs or interests of the Company, or
to
the pertinent laws, rules, and regulations of the United States of America,
and
the State of New York.
(b) Nothing
contained in this Section 6 shall be deemed to prevent or limit the Executive’s
right to invest in the capital stock or other securities of any business
dissimilar from that of the Company or, solely as a passive or minority
investor, in any business.
7. Standards.
The
Executive shall perform his duties under this Agreement in accordance with
(a)
such reasonable standards as the Board may establish from time to time, (b)
the
Company’s Code of Conduct, (c) the Company’s Employee Handbook, and (d) the
laws, rules and regulations of the United States of America and the State of
New
York. The Company will provide Executive with the working facilities and staff
customary for similar executives and necessary for him to perform his duties.
The Executive shall at all times remain a member in good standing of the bar
of
the State of New York. All determinations of reasonableness to be made by the
Board under this Agreement are to be made in the reasonable and good faith
judgment of the Board.
8. Vacation
and Sick Leave.
At such
reasonable times as the Board shall in its discretion permit, the Executive
shall be entitled, without loss of pay, to absent himself voluntarily from
the
performance of his employment under this Agreement, all such voluntary absences
to count as vacation time; provided that:
(a) The
Executive shall be entitled to an annual vacation in accordance with the
policies that the Board periodically establishes for senior management
Executives of the Company, but in no event less than three weeks per
annum.
(b) The
Executive shall not receive any additional compensation from the Company on
account of his failure to take a vacation, and the Executive shall not
accumulate unused vacation from one fiscal year to the next, except in either
case to the extent authorized by the Chief Executive Officer.
(c) In
addition to the aforesaid paid vacations, the Executive shall be entitled
without loss of pay, to absent himself voluntarily from the performance of
his
employment with the Company for such additional periods of time and for such
valid and legitimate reasons as the Board may in its discretion determine.
Further, the Board may grant to the Executive a leave or leaves of absence,
with
or without pay, at such time or times and upon such terms and conditions as
such
Board in its discretion may determine.
(d) In
addition, the Executive shall be entitled to an annual sick leave benefit as
established by the Board.
9. Indemnification.
The
Company shall indemnify and hold harmless Executive from any and all loss,
expense, or liability that he may incur due to his services for the Company
as
an officer and or director (including any liability he may ever incur under
Code
§ 4999, or a successor, as the result of severance benefits he may collect
pursuant to Sections 10 or 11) during the full Term of this Agreement and
shall at all times maintain adequate insurance for such purposes. However,
the
Company will not indemnify or hold harmless Executive (a) from any and all
loss,
expense, or liability that he may incur due to Executive’s intentional
misconduct, recklessness, dereliction of duty, gross negligence, or negligence,
(b) arising from or related to Executive’s employment or representations as an
attorney prior to his commencement of employment with Company or (c) arising
from or related to conflicts of interest between Company and clients that
Executive represented in his prior employment or representations as an attorney
prior to Executive’s commencement of employment with Company. This
indemnification shall be in addition to the obligations assumed by the Company
to provide indemnification to Executive owed to him by Harvest Strategies,
LLC
in his role as officer and manager of that company prior to the acquisition
of
the assets and liabilities of Harvest Strategies, LLC.
10. Termination
and Termination Pay.
Subject
to Section 11 hereof, the Executive’s employment hereunder may be terminated
under the following circumstances:
(a) Just
Cause.
The
Board, based on a good faith determination and upon written notice, can
immediately terminate at any time for just cause the Executive’s employment. The
Executive shall have no right to receive compensation or other benefits for
any
period after termination for Just Cause.
(b) Without
Just Cause.
The
Board, upon written notice, can immediately terminate Executive’s employment for
a reason other than Just Cause, in which case the Executive shall be paid an
amount equal to the balance of compensation provided for by Section 3 hereof
for
the balance of the Term.
(c) Resignation
by Executive with Good Reason.
The
Executive may at any time upon written notice to the Company, immediately
terminate employment for Good Reason, in which case the Executive shall be
entitled to receive the following compensation and benefits: (1) the salary
provided pursuant to Section 3 of this Agreement, up to the expiration date
(the
“Expiration Date”) of the Term, including any renewal term, of this Agreement,
and (2) the cost to the Executive of obtaining all health, life, disability
and
other benefits which the Executive would have been eligible to participate
in
through the Expiration Date based upon the benefit levels substantially equal
to
those that the Company provided for the Executive at the date of termination
of
employment. Said payment shall be made in monthly payments but shall cease
once
the Executive accepts new full time employment.
(d) Resignation
by Executive without Good Reason.
The
Executive may voluntarily terminate employment with the Company during the
Term
of this Agreement, upon at least 60 days’ prior written notice to the Board of
Directors, in which case the Executive shall receive only his compensation,
vested rights, and Executive benefits up to the date of his resignation without
Good Reason.
(e) Retirement,
Death, or Disability.
If the
Executive’s employment terminates during the Term of this Agreement due to his
death, a disability that results in his collection of any long-term disability
benefits, or retirement at or after age 62, the Executive (or the beneficiaries
of his estate) shall be entitled to receive the compensation and benefits that
the Executive would otherwise have become entitled to receive pursuant to
subsection (d) hereof upon a termination without Good Reason.
(f) Termination
Related to Change in Control. In
the
event this Agreement is terminated as described in subsections (1) or (2) below,
Executive shall be entitled to the greater of (x) the balance of the
compensation due him under this Agreement for the full Term or (y) base
compensation for a six (6) month period:
(1)
termination
by the Company within the period beginning three (3) months preceding a Change
in Control and ending six (6) months following a Change in Control for any
reason; or
(2) termination
by the Executive within the 6 month period following a Change in Control for
Good Reason.
11. No
Mitigation.
The
Executive shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, and no such
payment shall be offset or reduced by the amount of any compensation or benefits
provided to the Executive in any subsequent employment.
12. Trade
Secrets; Confidences and Secrets.
During
the course of Executive’s employment, Executive will come into contact with the
Company’s confidential business information, confidential proprietary
information, and trade secrets (collectively, the “Trade Secrets”). During the
Term of this Agreement and thereafter Executive will maintain the Trade Secrets
in confidence and will take no action that will in any way lessen or diminish
the Trade Secrets’ confidential and proprietary nature. Executive will in all
events protect and preserve the confidential and proprietary nature of the
Trade
Secrets, whether during the Term of this Agreement or thereafter. Whether during
or after the Term of this Agreement or thereafter, Executive will upon
reasonable notice account for any and all Trade Secrets in his possession or
control, and will, upon reasonable request, (a) turn-over any and all such
Trade
Secrets in Executive’s possession or control, (b) provide a sworn statement of
such Trade Secrets in Executive’s possession or control, (c) provide the Company
such access to computers, web-sites, electronic mail boxes and web pages that
Executive may possess and/or control in order for the Company to ascertain
the
extent to which Executive is in possession of the Trade Secrets, and/or (4)
provide the Company with a sworn statement that Executive is not in possession
or control of such Trade Secrets.
13. Successors
and Assigns.
(a) This
Agreement shall inure to the benefit of and be binding upon any corporate or
other successor of the Company which shall acquire, directly or indirectly,
by
merger, consolidation, purchase or otherwise, all or substantially all of the
assets or stock of the Company.
(b) Since
the
Company is contracting for the unique and personal skills of the Executive,
the
Executive shall be precluded from assigning or delegating his rights or duties
hereunder without first obtaining the written consent of the
Company.
14. Corporate
Authority.
Company
represents and warrants that the execution and delivery of this Agreement by
it
has been duly and properly authorized by the Board and that when so executed
and
delivered this Agreement shall constitute the lawful and binding obligation
of
the Company.
15. Amendments.
No
amendments or additions to this Agreement shall be binding unless made in
writing and signed by all of the parties, except as herein otherwise
specifically provided.
16. Applicable
Law.
The
validity, interpretation, and performance of this Agreement shall be governed
by
and construed in accordance with the substantive law of the State of New York,
without giving effect to conflict of law principles. Any action, lawsuit,
demand, claim or counterclaim shall be resolved by a judge alone, and both
parties hereby expressly waive and forever disclaim the right to a trial before
a civil jury.
17. Severability.
The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
18. Entire
Agreement.
This
Agreement, together with any understanding or modifications thereof as agreed
to
in writing by the parties, shall constitute the entire agreement between the
parties hereto with respect to the matters addressed and shall supersede all
previous agreements with respect to such matters.
19. Counterparts.
This
Agreement may be executed by either of the parties hereto in counterparts,
each
of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement on the day and year first hereinabove
written.
| Witnessed by: | NEWTEK BUSINESS SERVICES, INC. |
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Its:
Chairman, CEO
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Witnessed
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