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EMPLOYMENT AGREEMENT
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THIS AGREEMENT made as of the 31st day of July, 1996 by and among ▇▇▇▇
▇▇▇▇▇▇ Financial Group, Inc. ("Employer"), a corporation duly organized and
existing under and by virtue of the laws of the State of Delaware, and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ("Executive").
WHEREAS, Employer, through its subsidiaries, and Executive currently have
an employment agreement in place; and
WHEREAS, Employer desires to continue to employ Executive and to record its
understandings in that regard; and
WHEREAS, Executive is willing to accept such continuation of employment
under the terms and conditions set forth herein; and
WHEREAS, the employment, the duration thereof, the compensation to be paid
to Executive and the other terms and provisions of this Agreement were duly
fixed, stated, approved and authorized for and on behalf of Employer by the
action of the Compensation Committee of its Board of Directors.
NOW THEREFORE, in consideration of the premises, covenants and
Considerations hereinafter contained, it is mutually agreed as follows:
1. Title and Term. Employer hereby agrees to, does hereby, employ
Executive as Chairman of the Board of Directors of Employer for a term beginning
on the Closing Date of the Share Exchange Agreement entered into on June 12,
1996 by and among Employer and those certain persons known as the ▇▇▇▇▇▇ Family
("Closing Date"), and ending on December 31, 2001, unless extended as
hereinafter provided or sooner terminated as hereinafter provided. Employer also
agrees to nominate Executive for election to its Board of Directors during the
term of this Agreement and any extensions thereof.
2. Prior Agreements. Employer and Executive hereby agree that the prior
employment agreement shall become null and void as of the Closing Date;
provided, however, that Executive shall be entitled to all compensation until
the Closing Date pursuant to such prior employment agreement.
3. Compensation. In consideration of the services to be rendered by
Executive, Executive shall receive compensation as follows:
(a) Executive shall be compensated at the "Base Rate" then in effect
for such Executive at the Closing Date; or at such higher amount as the Board of
Directors of the
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Finance Company may hereafter fix, which shall then become the Executive's new
Base Rate. Executive's Base Rate salary shall be subject to periodic review
by the Board of Directors of Employer, which may determine to increase the
same, but Executive's Base Rate shall not be reduced during the term of this
Agreement. Such salary shall be paid in installments, in accordance with the
executive compensation policy of the Employer in effect during the term hereof.
(b) Executive shall be entitled to continuation of Employer benefits
presently provided, including, but not limited to, group health and life
insurance, matching 401K, deferred compensation program, stock options, and
executive key man life insurance.
(c) Executive shall be entitled to the use of a Employer-owned or
leased automobile for business purposes; the year, make and model of such
automobile shall be appropriate to the Employer's business. Employer hereby
grants Executive an option to purchase such Employer-owned automobile for the
depreciated book value, consistent with current policies of the Employer.
(d) The Employer shall pay to Executive, in addition to his Base Rate
salary, incentive compensation determined and paid in accordance with any
incentive compensation program for senior executive officers of the Employer,
and Executive shall be entitled to ten percent (10%) of the total incentive
compensation pool. Such incentive compensation payment shall be of an amount not
less than that which would have been calculated using the Incentive Compensation
Program and formula that was in effect of for fiscal 1995. The determination of
the amount of incentive compensation payable to Executive shall be made
separately for each calendar year, and there shall be no reason of any
subsequent determinations of adjustments. The incentive compensation determined
with respect to each year shall be paid for each year. At Executive's option,
75% of the estimated amount shall be paid on or about December 15 of such year
and the remainder, as adjusted for the actual calculation, shall be paid not
later than the publication of the audited financial statements for such year. If
Executive's employment is terminated during the year, other than for cause,
incentive compensation for such year shall be prorated based on the length of
employment during the year, and paid in accordance with the foregoing schedule.
4. Duties. Executive shall serve the Employer as indicated in paragraph 1
hereof and shall perform such duties as may be entrusted and set forth in the
by-laws of the Employer or resolutions of its Board Directors or as customarily
performed by one holding his position in a similar business or enterprise, and
shall also render such other and unrelated services and duties as may be
assigned him from time to time by the Employer. Such duties shall be rendered at
such place or places as the Employer shall in good faith require or as the
interest, needs, business or opportunity of the Employer and its subsidiaries
shall require, provided however, that the office of the Chairman of Reliance
Acceptance Corporation shall be located in Chicago, Illinois, and that Executive
is not requested or required to relocate from Chicago, Illinois.
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5. Best Effects of Executive. Executive agrees that he will faithfully,
industriously and to the best of his ability, experience and talents, devote his
time and attention to the performance of all duties that may be required of and
from him, pursuant to the express and implied terms hereof, all to the
reasonable satisfaction of the Employer. Employer acknowledges that Executive
may engage in other business activities for his own account, including
consulting and serving on boards of directors of other companies, so long as
such activities are free from any conflicts of interest with Employer or its
subsidiaries. Vacations shall be discretionary but shall be taken in such a
manner as not unreasonably to interfere with the performance of Executive's
duties or to disrupt the business of the Employer, and shall be consistent with
the policies of the Employer for vacation time applicable to senior executive
officers thereof.
6. Reimbursement for Expenses. The Employer will arrange for the payment or
reimbursement of reasonable and necessary business expenses incurred by
Executive in the performance of his duties hereunder, including, but not limited
to, expenditures for travel, meals, hotel accommodations and the like, after
submission of vouchers supporting such expenditures and their business
relationship as shall be required for deduction of the payments by the Employer
for federal and state income tax purposes. In addition, the Employer shall pay
for or reimburse Executive for dues and related business expenses incurred by
Executive at a luncheon club of Executive's choice in Chicago, Illinois. In the
event Executive's expense account is disallowed as a business expense by the
Internal Revenue Service due to the lack of supporting evidence, Executive shall
be responsible to the Employer for any adverse tax consequence incurred by the
Employer or its affiliates as a result thereof. Executive agrees to include the
amount of any such disallowance as added compensation to him and to pay the
resulting increases in income tax on such added compensation.
7. Executive's Rights Under Certain Plans Now or Hereafter in Effect.
The parties hereto agree that nothing contained herein is intended or shall be
deemed to preclude the Employer from granting to Executive, or Executive from
receiving, any stock option or as depriving Executive of his right to
participate in any profit sharing, pension, discretionary bonus, or other
remuneration plan or in a group insurance or similar employee benefit plan
established by or made available to the employees of the Employer, and in which
Executive would otherwise be entitled to participate as an employee of the
Employer under terms of such plan.
8. Extension of Term. Unless written notification is given to either
party prior to January 1, 1999, the term of this Agreement shall be
automatically extended to December 31, 2002. After January 1, 1999, unless
written notification is given to either party prior to each subsequent January
1, the term of this Agreement shall again be automatically extended for one
additional year on each such January 1.
9. Termination of This Agreement Prior to Expiration of Term.
Employer may terminate this Agreement for just cause at any time, but only
after (a) notice to Executive describing a just cause or causes why he should
no longer be employed by Employer because of his illegal activities, disclosure
of confidential or private information of the Employer, siding a competitor of
the Employer to Employee's detriment, refusal or failure to continue the
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performance of duties set forth in Paragraph 4 hereof at any time during the
term of this Agreement, or other action that is prejudicial to the best
interests of the Employer, (b) an opportunity for him to be heard before the
entire Board of Directors of Employer, and (c) a decision by at least a majority
of the entire Board adverse to Executive.
Executive will receive full compensation for any period of temporary
illness or temporary incapacity during the term of this Agreement. However, the
Employer shall have the right to terminate this Agreement if illness or
incapacity shall be of a character so as to disable Executive from rendering
satisfactory services to the Employer, which determination shall be made by the
Board of Directors thereof, for a period of more than 90 consecutive days during
any 12 month period.
If Executive is terminated by Employer for any reason other than for cause
or illness or incapacity, or if an event occurs whereby the authority or powers
of Executive are significantly diminished, the Employer shall pay to Executive
in a lump sum payment, all future amounts that would be payable to executive for
future salary and incentive compensation pursuant to this Agreement, which
amounts may be reasonably estimated for such purpose.
Termination or expiration of this Agreement shall not relieve Executive of
his obligations under Sections 11 and 12.
10. Assignment. Employer shall have the right, in its sole discretion, to
assign this Agreement to its successor or assigns, and all covenants and
agreements hereunder shall inure to the benefit of and be enforceable by said
successors or assigns and this Agreement shall thereby become the obligation of
Employer's successors and assigns. The term successor and assign shall include
any corporation which buys all or substantially all of Employer's assets, or
substantially all of its stock, or with which or into which it is merged or
consolidated.
11. Confidential Information. Executive recognizes that as a key member of
the staff of the Employer, he will occupy a position of trust with respect to
business information of a secret or confidential nature which is the property of
Employer, the Employer or their subsidiaries or affiliates, and which will be
imparted to or developed by Executive from time to time in the course of his
duties. Executive therefore agrees that he will not, during or subsequent to his
employment hereunder, use, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of the business of the Employer) any
knowledge or information, techniques, plans, computer designs, computer programs
whether embodied in source or object code, computer languages or formats,
customer lists, dealer lists, procedure manuals, personnel records, non-public
financial statements or any other information proprietary to Employer, the
Employer or their subsidiaries or affiliates; and that he will return promptly
upon termination of his employment for whatever reason (or in the event of his
death, his personal representative shall return) to the Employer at its
direction and expense any and all copies of records, drawings, writings,
blueprints, materials, memoranda and other data pertaining to such secret or
confidential information.
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12. Restrictive Covenant. The Employer has incurred and will
continue to incur great expense in order to develop its business, and is relying
upon Executive's faithful performance of this Agreement in connection therewith.
Executive thus further agrees that, during the term of this Agreement, he will
not, directly or indirectly, alone or as a member of a partnership, or as an
officer, stockholder (owning more than ten percent of the outstanding stock),
corporate director, employee, consultant or representative of any company or
entity, engage in competition with the Employer.
13. Remedy. Executive understands that the Employer would not have
any adequate remedy at law for the material breach or threatened breach by
Executive of any one or more of the covenants set forth in this Agreement and
agrees that in the event of any such material breach or threatened breach, the
Employer may, in addition to the other remedies which may be available to it:
(a) File a suit in equity to enjoin Executive from the breach or
threatened breach of such covenants, and/or
(b) File a suit in equity to enforce the provisions of Paragraphs 11
and 12 hereof.
14. Waiver. Any waiver by any party hereto of any provision of this
Agreement shall not operate as or be construed as a waiver of any subsequent
breach thereof.
15. Insurance. Executive agrees that Employer and/or the Employer may,
from time to time, apply for and take out in its own name and at its own
expense, life, health, accident, or other insurance or an annuity contract upon
Executive, that it may deem necessary or advisable to protect its interest
hereunder; and Executive agrees to submit to any medical or other examination
necessary for such purpose and to assist and cooperate in procuring such
insurance; and Executive agrees that he shall have no right, title or interest
in or to such insurance.
16. Modification. The parties hereto agree that this document contains
the entire understanding and agreement between them and cannot be amended,
modified or supplemented in any respect, except by an agreement in writing
signed by the party against whom enforcement of any amendment, modification or
supplement is sought.
17. Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Delaware.
18. Severability. In the event any provision of this Agreement is held to
be invalid, the remaining provisions shall not be affected thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
▇▇▇▇ ▇▇▇▇▇▇ FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇ Mangans
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▇▇▇▇ Mangans
Authorized Director and
Chairman of the Compensation Committee
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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