EXHIBIT 10.61
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as the "Agreement") is made
as of the 7th day of April, 1998, in Lakewood, Colorado, by and between CAPITAL
ASSOCIATES, INC., a Delaware corporation and CAPITAL ASSOCIATES INTERNATIONAL,
INC., a Colorado corporation (hereinafter collectively referred to as the
"Corporations"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (hereinafter referred to as "▇▇. ▇▇▇▇▇▇").
1. EMPLOYMENT. The Corporations hereby employ ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ hereby
accepts employment with the Corporations upon the terms and conditions
hereinafter set forth.
2. TERM. Subject to the provisions set forth in SECTION 6 of this Agreement,
the original term of this Agreement shall commence on the 7th day of April, 1998
and continue to the end of the Corporations' fiscal year, May 31, 2001,
Thereafter, the Term of this Agreement shall be automatically renewed for
successive one (1) year periods unless prior written notice to the contrary is
given by the Corporations or ▇▇. ▇▇▇▇▇▇ to the other on or before sixty (60)
days prior to the expiration of the original Term hereof or each such successive
one (1) year renewed Term(s), as the case may be.
3. DUTIES.
a. OFFICES. ▇▇. ▇▇▇▇▇▇ is engaged as President and Chief Executive Officer
of the Corporations, which is in addition to his existing offices as Director
and Chairman of the Board of the Corporations, with the powers, authority,
duties and responsibilities specified at any time and from time to time by a
majority of the Board and as set forth in the Bylaws of the Corporations. ▇▇.
▇▇▇▇▇▇ also agrees to perform such other executive services as shall from time
to time be reasonably assigned to him by the Boards of Directors of the
Corporations ("Boards").
b. EXTENT OF SERVICE. ▇▇. ▇▇▇▇▇▇ shall diligently devote his business time,
attention and energies to the performance of his duties under this Agreement and
shall exert his best efforts in furtherance of the business of the Corporations;
provided, however, that it is hereby acknowledged by the Corporations that ▇▇.
▇▇▇▇▇▇ continues his employment with MCC Financial Corporation ("MCC"), which
holds approximately 57% of the common stock of Capital Associates, Inc. ▇▇.
▇▇▇▇▇▇ will continue to devote a portion of his business time toward his duties
and obligations at MCC. In the event any issues or actions occur that present an
apparent conflict of interest between the Corporations and MCC, ▇▇. ▇▇▇▇▇▇
hereby agrees to remove himself so as to permit others with no such conflicting
relationship to resolve such issues or actions or, in the alternative, represent
only the Corporations in such matters. ▇▇. ▇▇▇▇▇▇ also agrees to exert his best
efforts to preserve for the benefit of the Corporations the good will of the
Corporations' clients and those who may have business relations with it.
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4. COMPENSATION.
a. BASE SALARY DURING EMPLOYMENT. Commencing on the Effective Date, ▇▇.
▇▇▇▇▇▇'▇ base salary shall be $ 325,000.00 per year on an annualized basis
("Base Salary"), subject to increase at any time during the Term of this
Agreement by the Compensation Committee of the Boards (the "Compensation
Committee"), in its sole and absolute discretion. In determining whether an
increase in the Base Salary is appropriate at any time during the Term of this
Agreement, the Compensation Committee shall consider, among other things, (a)
profitability of the Corporations, (b) the market value of Capital Associates,
Inc. common stock as reflected from time to time on the NASDAQ NMS, and (c) such
other factors as the Compensation Committee deems appropriate, in its sole and
absolute discretion. Base Salary shall be payable in accordance with the
Corporations' prevailing payroll policies.
b. INCENTIVE COMPENSATION. In addition, to compensate ▇▇. ▇▇▇▇▇▇ for his
contributions to the overall success of the Corporations as reflected in their
earnings and in enhanced value to stockholders, and to the extent that the
Corporations reach the goals in the Business Plan for each fiscal year,
incentive compensation will be in such form and amount as the Compensation
Committee of the Board shall determine, in its sole discretion. For each of the
fiscal years covered by the Term of this Agreement, ▇▇. ▇▇▇▇▇▇ will be entitled
to receive a bonus payment of 4% (the "Base Incentive Payment Percentage") of
the Corporations's pre-tax earnings for each such fiscal year (the "Base
Incentive Payment"). The Base Incentive Payment will be adjusted either up or
down by adjusting the Base Incentive Payment Percentage in an amount equal to
the percentage change in the average closing price of the Corporations's stock
for the last four months of the applicable fiscal year as compared to the same
period in the prior fiscal year; provided, however, that in no event shall the
Base Incentive Payment Percentage be adjusted lower than 3% or higher than 6%.
The timing of the payment of the Base Incentive Payment shall be the same as
similar payments made to other employees of the Corporations. For the
Corporations' fiscal year ending May 31, 1998, the Base Incentive Payment shall
be pro-rated to cover the portion of the fiscal year ▇▇. ▇▇▇▇▇▇ serves as
President and Chief Executive Officer, April 7, 1998 through May 31, 1998.
c. STOCK OPTION. Pursuant to a stock option agreement in the form attached
as EXHIBIT A to this Agreement and incorporated herein by this reference, ▇▇.
▇▇▇▇▇▇ will be granted, on and as of the commencement of each of the
Corporations fiscal years during the Term hereof, an option (the "Stock Option")
under the Corporations 1996 Stock Option Plan, to purchase up to 10,000 shares
of common stock of the Capital Associates, Inc. ("Stock"), the terms and
conditions of which are set forth in the Stock Option Agreement attached as
EXHIBIT A hereto. This Stock Option commitment on the part of the Corporations
will not be in lieu or preclude any other grants the Corporations may decide to
provide ▇▇. ▇▇▇▇▇▇.
d. DIRECTORS FEES. ▇▇. ▇▇▇▇▇▇, as Chairman of the Board, will continue to
receive Directors Fees under and pursuant to the current policies of the
Corporations for Director's compensation.
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e. OTHER BENEFITS DURING EMPLOYMENT. ▇▇. ▇▇▇▇▇▇ will continue to look to
and participate in MCC's SEP/▇▇▇ plans and employee benefit programs for
insurance (life, medical, dental, prescriptions, disability , etc.) which are
offered to the employees of MCC. All of the benefits described in the preceding
sentence shall be in accordance with current personnel policy.
f. EXPENSES. ▇▇. ▇▇▇▇▇▇ is authorized to incur reasonable expenses for
promoting the business of the Corporations, including expenses for meals,
travel, and other similar items. The Corporations shall reimburse the ▇▇. ▇▇▇▇▇▇
for all such expenses upon the presentation by the ▇▇. ▇▇▇▇▇▇, from time to
time, of an itemized accounting for such expenditures.
▇. ▇▇▇▇▇▇▇▇▇. Upon termination of his employment with the Corporations,
▇▇. ▇▇▇▇▇▇ may be entitled to the severance benefits in accordance with SECTION
6.c., below.
h. PERSONAL TIME. ▇▇. ▇▇▇▇▇▇ shall be entitled to take two hundred sixteen
(216) hours of paid personal time per year; provided, however, that the ▇▇.
▇▇▇▇▇▇ shall not take more than two (2) consecutive weeks of personal time,
unless due to illness, in any single instance.
5. O&D INSURANCE AND INDEMNIFICATION. ▇▇. ▇▇▇▇▇▇ will be entitled to the same
officer and director liability insurance and indemnification as other officers
and directors of the Corporations for any period during which ▇▇. ▇▇▇▇▇▇ served
or serves in such capacities. The Corporations hereby agree to indemnify,
protect, defend and hold ▇▇. ▇▇▇▇▇▇ harmless to the fullest extent permitted by
the Delaware and Colorado General Corporation Laws, as the same now exist or may
hereafter be amended, with regard to the performance of his duties to the
Corporations as Director, Chairman of the Board, President and Chief Executive
Officer.
6. TERMINATION.
a. DISABILITY. In the event that during the term of this Agreement, ▇▇.
▇▇▇▇▇▇ shall become disabled by accident or by illness so as to be unable to
perform the duties required of him/her under this Agreement for a period of
ninety (90) consecutive days, then the Corporations may, at the expiration of
such ninety (90) day period, suspend the ▇▇. ▇▇▇▇▇▇'▇ services and the
Corporations' obligation and duties under this Agreement for the continuing
period of his disability by notice to him in writing and, if the ▇▇. ▇▇▇▇▇▇ does
not resume the duties required of him/her within ninety (90) days of the date he
first became so disabled, this Agreement and all of the rights, duties, and
obligations hereunder shall terminate except that the restrictions imposed on
▇▇. ▇▇▇▇▇▇ as set forth in SECTION 7 of this Agreement and the remedies
available to the Corporations as set forth in such Sections shall remain in
effect.
b. "For Cause" Termination. Anything herein to the contrary
notwithstanding, upon the happening of any one of the following events, the
Corporations may terminate this Agreement by giving ▇▇. ▇▇▇▇▇▇ written notice of
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of such termination: (i) an act or omission of ▇▇. ▇▇▇▇▇▇ constituting Cause (as
defined below); or (ii) a violation by ▇▇. ▇▇▇▇▇▇ of any of the provisions of
SECTION 7. hereof. For the purpose of clause (i) of this SECTION 6.b., "Cause"
shall mean (A) conviction in a court of law of any crime or offense involving
money or other property of the Corporations or any of its affiliates, or (B) the
determination by the Corporations, acting in good faith, that ▇▇. ▇▇▇▇▇▇ has
knowingly and willfully committed an offense described in clause (A) above or
committed an act of fraud with respect to money or other property of the
Corporations or an affiliate of the Corporations. Termination pursuant to this
SECTION 6.b. shall be effective five (5) days after the date of such notice or
as otherwise provided therein.
The Corporations' right of termination pursuant to this SECTION 6.b. shall be in
addition to the rights and remedies available to the Corporations at law or in
equity and such rights and remedies shall survive termination of this Agreement.
In the event of termination of this Agreement pursuant to this SECTION 6.b., ▇▇.
▇▇▇▇▇▇ shall have no right to receive any compensation for any period subsequent
to the date of such termination, except for any pro-rated or other amounts
earned prior to such termination.
c. TERMINATION OTHER THAN "FOR CAUSE." In the event of termination of this
Agreement for any reason other than as set forth in SECTION 6.b., ▇▇. ▇▇▇▇▇▇
shall be entitled to receive the greater of (i) three (3) times the annual Base
Salary, or (ii) the Base Salary for the remainder of the Term, plus the
pro-rated amount of the Incentive Compensation for the fiscal year in which such
termination occurs.
A "Change of Control" of the Corporations (as defined in the immediately
following paragraph) shall be deemed a termination of ▇▇. ▇▇▇▇▇▇ other than "for
cause" for purposes of determining ▇▇. ▇▇▇▇▇▇'▇ payment under SECTION 6.c., and
▇▇. ▇▇▇▇▇▇'▇ Stock Options shall immediately vest upon such Change of Control.
However, ▇▇. ▇▇▇▇▇▇ may choose not to exercise his Stock Option in full in
connection with the Change of Control, if the Surviving Corporation
issues/grants replacement stock options to acquire shares of stock of the
Surviving Corporation to ▇▇▇▇▇▇, having comparable value and substantially the
same terms as ▇▇. ▇▇▇▇▇▇'▇ Stock Option.
A "Change of Control" shall be deemed to occur upon the happening of any of the
following events: (i) the Board adopts a resolution to the effect that a change
of control has occurred or is anticipated to occur and such change of control
does in fact occur; (ii) any change of control of the Corporations of a nature
that is required to be reported on Form 8-K under the Securities Exchange Act of
1934, as amended (the "Exchange Act"); (iii) individuals who then constitute the
Board of the Capital Associates, Inc. cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election, of
each new director was approved by a vote of at least two-thirds of such
directors on the Board prior to such election or nomination; (iv) the approval
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by the stockholders of the Capital Associates, Inc. of any merger or
consolidation of Capital Associates, Inc. with any other corporation or entity
or the sale or other disposition of all or substantially all the assets of the
Corporations to any other person, corporation or entity (such other corporation
or entity in the case of a merger, consolidation or sale of all or substantially
all of the assets of the Corporations being referred to herein as the "Surviving
Corporation"), and (v) any person (within the meaning of Section 13(d) of the
Exchange Act), other than MCC, becomes the beneficial owner (directly or
indirectly) of securities of the Corporations representing 50% or more of the
combined voting power of the Corporations's then outstanding securities entitled
to vote generally in the election of directors.
d. VOLUNTARY TERMINATION BY ▇▇. ▇▇▇▇▇▇. In the event ▇▇. ▇▇▇▇▇▇ voluntarily
terminates his employment with the Corporations during the Term of this
Agreement, ▇▇. ▇▇▇▇▇▇ shall receive no severance payments.
e. EXPENSE REIMBURSEMENT. In the event ▇▇. ▇▇▇▇▇▇'▇ employment is
terminated (without regard to the reason for such termination), ▇▇. ▇▇▇▇▇▇ will
be reimbursed for reasonable expenses, including travel and entertainment
expenses, incurred by him on behalf of the Corporations while he was an employee
of the Corporations and for which he submits to the Corporations properly
completed expense report/reimbursement forms on or before the 15th business day
following his termination date.
f. OTHER PAYMENTS. In the event ▇▇. ▇▇▇▇▇▇ is terminated by the
Corporations other than "for cause" (or is treated as if terminated other than
"for cause") during the Term of this Agreement, ▇▇. ▇▇▇▇▇▇ shall receive the
following termination benefits from the Corporations, in addition to the
termination payments referenced in SECTION 2, above:
(i) The Corporations agree to pay to MCC all costs necessary to maintain in
full force and effect the SEP/▇▇▇ plans and all medical, health and other
similar insurance on behalf of ▇▇. ▇▇▇▇▇▇ and his immediate family, on the
terms and conditions in effect for ▇▇. ▇▇▇▇▇▇ on the Termination Date for
the period for which ▇▇. ▇▇▇▇▇▇ receives severance payments as set forth in
SECTION 6. c., above and COBRA benefits thereafter commencing on the first
anniversary date of his termination date.
(ii) The Corporations will pay to ▇▇. ▇▇▇▇▇▇ his share of any bonuses
declared by the Compensation Committee, prorated based upon the aggregate
dollar amounts of the bonus and ▇▇. ▇▇▇▇▇▇'▇ employment for the portion of
the year prior to his termination date; provided, however, that ▇▇. ▇▇▇▇▇▇
acknowledges that nothing contained herein shall obligate the Compensation
Committee to declare any such bonus or give ▇▇. ▇▇▇▇▇▇ a legal right to
enforce the declaration of such bonus.
7. NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION. Except as set forth
below, ▇▇. ▇▇▇▇▇▇ agrees that all Confidential Information (as defined below)
and all physical embodiments thereof are confidential to the Corporations. ▇▇.
▇▇▇▇▇▇ agrees that he will not at any time, directly or indirectly, use,
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disclose or make available to any person, concern or entity any Confidential
Information, except with the prior written consent of the Corporations or as may
be required by law.
"Confidential Information" shall be broadly defined to include any and all data
and information relating to the business of the Corporations, including without
limitation: (i) information and material relating to lessee and investor
relations; (ii) lease and financing documentation; (iii) financial and
accounting affairs of the Corporations; (iv) business agreements with vendors
and lenders; (v) pricing information; (vi) customer lists; (vii) business plans
and strategies; (viii) any and all information relating to present or proposed
Corporations' debt or equity products; (ix) marketing plans and data; (x) trade
secrets; and (xi) any other information that ▇▇. ▇▇▇▇▇▇ knows or should know is
treated as confidential by the Corporations. "Confidential Information" shall
not include any data or information that has been voluntarily disclosed to the
public by the Corporations or that otherwise enters the public domain by lawful
means.
8. AGREEMENT NOT TO SOLICIT EMPLOYEES OR OTHERS. ▇▇. ▇▇▇▇▇▇ agrees that,
through and including the third annual anniversary of his Termination Date, he
will not, directly or indirectly, (i) solicit, induce, interfere with or hire
away, or assist any third party in soliciting, diverting, interfering with or
hiring away any part-time or full-time employee of the Corporations, whether or
not such employment is pursuant to a written agreement, is for a specified term
or is "at will," (ii) induce or attempt to induce any customer, to cease doing
business with the Corporations, or in any way interfere with the relationship
between any such party and the Corporations, and (iii) retain as an employee any
former part-time or full-time employee of the Corporations within six months
following such employee's termination of employment with the Corporations.
9. AGREEMENT INCLUSIVE. This Agreement supersedes any and all consulting,
employment or other agreements, whether written or oral by and between the ▇▇.
▇▇▇▇▇▇ and the Corporations and any and all such prior Agreements are hereby
canceled effective as at the date of this Agreement.
10. BENEFIT. This Agreement shall inure to the benefit of and be binding upon
the Corporations, its successors and assigns, including, but not limited to, (i)
any corporation(s) which may acquire all or substantially all of Corporations'
assets and business, (ii) any corporation(s) with or into which the Corporations
may be consolidated or merged; (iii) any corporation(s) that is the successor
corporation(s) in a share exchange, and ▇▇. ▇▇▇▇▇▇'▇ heirs, guardians and
personal and legal representatives. ▇▇. ▇▇▇▇▇▇ may assign any of his financial
or monetary rights under this Agreement to an immediate family member (i.e.,
wife or children). ▇▇. ▇▇▇▇▇▇ may not assign any of his rights under this
Agreement to anyone other than a family member or any of his obligations under
this Agreement, without the prior written consent of the Board. The Corporations
may not assign any of its rights or obligations under this Agreement without the
prior written consent of ▇▇. ▇▇▇▇▇▇.
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11. REMEDIES. The Corporations and ▇▇. ▇▇▇▇▇▇ will be entitled to enforce their
respective rights under this Agreement, specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights to which they may be entitled. The Corporations and ▇▇. ▇▇▇▇▇▇
agree that monetary damages may not be an adequate remedy for breach of the
provisions of this Agreement and that either of them may, in their sole
discretion, apply to any court for specific performance and/or injunctive relief
in order to enforce or prevent violations of this Agreement.
12. MODIFICATION AND WAIVER. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
13. GOVERNING LAW. This Agreement shall be governed by and construed in all
respects in accordance with the laws of the State of Colorado.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties, and may be amended, waived, changed, modified, extended or rescinded
only by a writing signed by the party against whom any such amendment, waiver,
change, modification, extension or rescission is sought.
15. NOTICES. All notices and communications hereunder shall be in writing and
shall be deemed given upon personal delivery or three (3) days after deposit
with the U. S. Postal Service, postage prepaid, by registered or certified mail,
return receipt requested, and, if intended for the Corporations, shall be
addressed to the attention of the Legal Department, Capital Associates, Inc., at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other address of which the Corporations shall have given notice to the ▇▇.
▇▇▇▇▇▇ in the manner herein provided, and if intended for the ▇▇. ▇▇▇▇▇▇, shall
be addressed to him at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ or at such other address of which the ▇▇. ▇▇▇▇▇▇ shall have given notice
to the Corporations in the manner herein provided.
16. SEVERABILITY. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever (a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby, and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
thereby.
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17. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original and all of
which together shall constitute one and the same Agreement. Only one such
counterpart signed by the party against whom enforceability is sought needs to
be produced to evidence the existence of this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date first
above written.
"CORPORATIONS"
Capital Associates, Inc.,
a Delaware corporation
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Its: Senior Vice President
----------------------------
Capital Associates International, Inc.,
a Colorado corporation
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Its: Senior Vice President
----------------------------
"▇▇. ▇▇▇▇▇▇"
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
The foregoing agreement and been reviewed and approved by the Special Committee
of Non-Employee Directors of the Corporations this 12th day of May, 1998
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman
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EXHIBIT A
TO
EMPLOYMENT AGREEMENT
DATED AS OF APRIL 7, 1998
BY AND BETWEEN
CAPITAL ASSOCIATES, INC.
AND
CAPITAL ASSOCIATES INTERNATIONAL, INC. (THE "CORPORATIONS")
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇. ▇▇▇▇▇▇")
STOCK OPTIONS.
During the term of this Agreement, ▇▇. ▇▇▇▇▇▇ shall be entitled to the following
stock option grants under the 1996 Stock Option Plan of Capital Associates, Inc.
or any replacements or substitutions thereof (the "Plan"). The Plan is for the
benefit of the Employees of the Corporations and due to the special capacity of
▇▇. ▇▇▇▇▇▇ in and to the Corporations and to make ▇▇. ▇▇▇▇▇▇'▇ transition to an
employee of the Corporations equitable, the following grants and vesting are
hereby agreed to by the Corporations:
1. AUTOMATIC ANNUAL OPTION GRANTS. During the term of this Agreement,
▇▇. ▇▇▇▇▇▇, who is serving as a member of the Board of Directors of the
Corporations (the "Board") shall automatically be granted on the first day of
each of the Corporations' fiscal years (the "Grant Date"), an option to purchase
5,000 Shares of the common stock of Capital Associates, Inc., par value $.008
per share.
2. EXECUTIVE COMMITTEE ANNUAL OPTION GRANTS. In addition, ▇▇. ▇▇▇▇▇▇, who is
serving as member of the Executive Committee shall automatically be granted on
each Grant Date an additional option to purchase 5,000 Shares.
3. VESTING. No portion of any option granted under the Plan during any fiscal
year of the Corporations shall be exercisable and vest, in whole or in part,
prior to the close of business on the last day of such fiscal year.
4. INCORPORATION OF THE PLAN. All others terms, conditions and provisions of
the Plan are hereby incorporated by this reference.