EMPLOYMENT AGREEMENT
THIS AGREEMENT between Olympic Financial Ltd. (the "Company") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (the "Executive") is dated as of this 6th day of January,
1997.
W I T N E S S E T H :
WHEREAS, the Company and the Executive wish to enter into an
agreement setting forth the terms and conditions upon which the Executive shall
be employed by the Company;
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. This Agreement shall govern the terms and
conditions of the Executive's employment, which shall commence as of a date to
be mutually agreed upon between the Company and the Executive (the "Effective
Date").
2. GRANT OF OPTIONS. Not later than the Effective Date, the
Company will grant to the Executive an option to purchase 1,200,000 shares of
the Company's common stock at an exercise price of $14.87 per share, subject to
the terms and conditions of the stock option agreement (the "Option Agreement")
between the Company and the Executive of even date herewith attached hereto as
Exhibit A (the "Option"). The Option will vest in three equal installments on
the first three anniversaries of the date of grant, and will have a maximum term
of 10 years, subject to earlier termination upon termination of employment in
accordance with the terms of options granted to other senior executives of the
Company. The Option grant will not be subject to shareholder approval. The
Company will undertake to file a registration statement on Form S-8 with respect
to the Option shares as soon as practicable after the date of grant. Option
vesting will be accelerated in the event of the Executive's death, Disability
(as herein defined), termination without Cause (as herein defined), termination
for Good Reason (as herein defined), or a Change in Control (as defined in the
Option Agreement).
3. EMPLOYMENT PERIOD. The Company agrees to employ the Executive,
and the Executive agrees to remain in the employ of the Company, for the period
(the "Employment Period") commencing on the Effective Date and ending on the
date of any termination of the Executive's employment in accordance with Section
7 of the Agreement.
4. POSITION; DUTIES; RESPONSIBILITIES. (a) POSITION AND DUTIES.
During the Employment Period, the Executive shall serve as Chief Executive
Officer of the Company, and shall report directly to the Board or one or more
designated members thereof.
(b) BUSINESS TIME. During the Employment 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 Effective Date, 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 (other than his
prior employer) shall not be deemed to interfere with the performance of the
Executive's services to the Company.
5. PLACE OF PERFORMANCE. During the Employment Period, the
Executive's principal places of performance will be at the Company's offices in
Minneapolis, Minnesota and at a location to be determined outside of
Philadelphia, Pennsylvania, with the Executive dividing his time between the two
locations on such basis as shall be mutually agreeable to the Executive and the
Company, except for reasonably required travel on behalf of the Company.
6. COMPENSATION AND BENEFITS. (a) BASE SALARY. During the
Employment Period, the Executive shall receive a base salary ("Base Salary") at
an annual rate of not less than $100,000, paid in accordance with the Company's
regular payroll practices. 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 of Directors (the "Board") or
any committee thereof. 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
2
Section 6(a) or, if increased after the Effective Date, the Base Salary as so
increased.
(b) ANNUAL BONUS. (i) In addition to the Base Salary, the
Executive shall be awarded for each fiscal year of the Company ending during the
Employment 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 $300,000. If a fiscal year of the Company
begins, but does not end, during the Employment 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 Employment 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.
(ii) The Executive's Annual Bonus shall be applied toward
participation in the Company's 1994-1997 and 1998-2000 Restricted Stock Election
Plans on a basis commensurate with an executive having a base salary of $500,000
(or, if greater, the Executive's annual Base Salary).
(c) FRINGE BENEFITS. During the Employment 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 or, if more
favorable, plans applicable to the Company's executives. The Company shall
pay the premiums associated with such coverage. In the event Executive
makes a claim against any disability policy provided to Executive by the
Company pursuant to this Section 6(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).
3
(ii) VACATION. Executive shall be entitled to not less than
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 in accordance with Company policy.
(iv) AUTOMOBILE. The Company shall at Executive's option
either (A) provide to Executive use of an automobile to be used by
Executive in conducting the Company's business; or (B) pay to Executive a
monthly auto expense not less than Four Hundred Dollars ($400) per month.
In addition, the Company shall reimburse Executive (1) an amount equal to
the cost of insuring and maintaining the automobile used by Executive for
the Company's business and for the Executive's personal use, 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 permit Executive and his family
to a membership at Olympic Hills 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.
4
(vi) OFFICE AND SUPPORT STAFF. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to secretarial and other
assistance, at least equal to the most favorable of the foregoing provided
to the Executive by his predecessor employer at any time during the 90-day
period immediately preceding the Effective Date.
7. TERMINATION. (a) DEATH OR DISABILITY. The Executive's
employment shall terminate automatically upon his death. The Company may
terminate Executive's employment during the Employment 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 Employment Period for any reason, provided that any termination by the
Executive pursuant to Section 7(d) of this Agreement on account of Good Reason
(as defined therein) shall not be treated as a voluntary termination under this
Section 7(b).
(c) CAUSE. The Company may terminate the Executive's employment
during the Employment 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 Employment 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
5
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), 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 6 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 perform his
services at any location more than 35 miles from the places of performance
described in Section 5 hereof; 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 14(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 Employment Period shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 15(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
6
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 Employment
Period.
8. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH. If the
Executive's employment is terminated during the Employment Period by reason of
the Executive's death, this Agreement shall terminate without further
obligations to the Executive's legal 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 (including any accrued but unpaid bonus
for prior year(s)), 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 in writing 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 date when
the Employment Period would otherwise have terminated, shall continue to
participate in or be covered under the benefit plans and programs referred to in
Section 6(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 6(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 of the Company and/or their families in
accordance with the plans,
7
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 Employment
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
Employment 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 6(a) of this Agreement;
(2) the Annual Bonus;
(3) an amount equal to the average annual amount paid and/or
reimbursed to the Executive pursuant to Section 6(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
6(c)(i) of this Agreement;
provided, however, that with respect to the life and medical insurance
coverage referred to in Section 6(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.
9. 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 during
8
the Employment Period under any stock option, restricted stock or other plans or
agreements with the Company or any of its affiliated companies including,
without limitation, the Option. 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.
10. 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 10 (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 and employment 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.
(b) Subject to the provisions of Section 10(c), all determinations
required to be made under this Section 10, 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 10, 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 10, shall be paid by the Company to the
9
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 10(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
(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
10
limiting the foregoing provisions of this Section 10(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
▇▇▇ 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 ▇▇▇ 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 10(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 10(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 10(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.
11. 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 obligated to seek
11
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.
12. 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.
13. 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.
12
(b) It is mutually acknowledged that by virtue of the Executive's
positions with the Company and its subsidiaries, he will have 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 the Executive will be developing 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 will reside in the
Executive, since his duties will include 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) The Executive agrees that during the Employment 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 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 Agreement, the term "Territories" means any state in which any loans or
leases acquired by the Company originated (determined by the location of the
dealers from whom the loans or leases were purchased).
(ii) The Executive agrees that during the Employment 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 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) The Executive agrees that during the Employment 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
13
employment and whether or not such employment was for a determined period or was
at will.
(c) The Executive acknowledges that the provisions of this Section
13 constitute a material inducement to the Company to enter into this Agreement.
The Executive further acknowledges that the Company's remedy at law for a breach
by him of the provisions of this Section 13 will be inadequate. Accordingly, in
the event of a breach or threatened breach by the Executive of any provision of
this Section 13, the Company will be entitled to any provision of this Section
13, 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 13 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 13 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 provision or
covenant will be enforceable; provided, however, that the determination of such
court will not affect the enforceability of this Section 13 in any other
jurisdiction.
(d) In no event shall an asserted violation of the provisions of
this Section 13 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.
14. 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.
15. 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.
14
(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: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Company: Olympic Financial Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
(with a copy to the attention
of the General Counsel)
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.
15
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/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
16