EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
this 19th day of July, 1994, by and between PLM INTERNATIONAL, INC. ("Employer")
and J. MICHAEL ALLGOOD ("Employee").
WHEREAS, the Board of Directors deems it in the best interest of the
shareholders of the Employer to maintain a continuity of management, and retain
an experienced, successful and proven management team; and
WHEREAS, J. Michael Allgood has accepted the appointment of the Board
of Directors to the position(s) of Vice President of Finance and Chief Financial
Officer, PLM International, Inc.;
W I T N E S S E T H
That in consideration of the covenants, duties, terms and conditions
hereinafter set forth, the parties hereto agree as follows:
1. Services. Employer hereby engages the exclusive services of Employee
as Vice President of Finance and Chief Financial Officer, PLM International,
Inc., with his powers and duties in that capacity to be determined by Employer's
Board of Directors, and Employee hereby agrees to perform such services on the
terms and conditions herein contained and to abide by all rules and regulations
for the conduct of the Employee that are now or may hereafter be established by
Employer. In connection with this Agreement, Employee shall be based at the
principal executive offices of Employer or at such location as may be designated
from time to time by the Board of Directors of Employer, except for required
travel on Employer's business to an extent substantially consistent with present
business travel obligations.
2. Employment Term. The term of this Agreement shall commence on the
date hereof (the "Commencement Date"), and shall continue for three (3) year(s)
(the "Original Term") unless terminated pursuant to Sections 10 or 11 of this
Agreement. One year from the Commencement Date and each anniversary thereafter,
the term of this Agreement shall be automatically extended one (1) additional
year unless prior to such anniversary of the Commencement Date, the Employer
shall have delivered to the Employee notice of a determination made pursuant to
Section 10.1(C) of this Agreement, or Employee shall have delivered to the
Employer written notice that the term of this Agreement shall not be extended.
3. Compensation.
3.1 Employer shall pay to Employee as full compensation for
all services performed, the sum of one hundred thirty-five thousand dollars
($135,000) per year (or such higher amount as may be agreed to by Employer and
Employee from time to time)(the original amount or the adjusted amount, if
applicable, being the "Base Salary") payable in equal semimonthly installments.
Employee's compensation may be adjusted from time to time, but it may not be
reduced below the Base Salary without the Employee's prior written consent.
3.2 Employer may deduct and withhold from all payments to be
made to Employee hereunder the amounts required or permitted to be deducted or
withheld pursuant to any provisions of any present or future applicable law or
regulation, together with the right and authority to pay any such deductions or
withholdings over to any party entitled to the same pursuant to the provisions
of any such law or regulation.
4. Bonus. The Employee shall be eligible to participate in any bonus or
incentive compensation plan for which Employee or other senior executives of
Employer may reasonably expect to participate (the "Incentive Compensation
Plan"). To the extent not otherwise determined pursuant to the Incentive
Compensation Plan, the Board of Directors shall have the sole discretion to
determine the amount of such bonus, or incentive compensation, if any.
5. Other Benefits. Employer shall maintain in full force and effect,
and Employee shall be entitled to continue to participate in, all of Employer's
employee benefit plans and arrangements in effect on the date hereof in which
Employee participates; or such other plans or arrangements that would provide
Employee with substantially equivalent benefits thereunder (including without
limitation each pension and retirement plan and arrangement, supplemental
pension and retirement plan and arrangement, stock option plan, life insurance
plan and arrangement, health-and-accident plan and arrangement, medical
insurance plan and arrangement, disability plan and arrangement, survivor income
plan and arrangement, relocation plan and vacation plan) (the "Employee Benefit
Plans"); provided, however, that this Section 5 shall not apply to any of
Employer's Incentive Compensation Plan(s). Employer shall not make any changes
in such plans or arrangements which would adversely affect Employee's rights or
benefits thereunder, unless such change occurs pursuant to a program applicable
to all employees or executives of the Employer and does not result in a
proportionately greater reduction in the rights of or benefits to the Employee
as compared with any other employee or executive of the Employer. Employee shall
be entitled to participate in and receive benefits under any Employee Benefit
Plan or arrangement made available by Employer in the future to its employees,
executives or key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. Nothing paid to the Employee under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the salary payable to the Employee pursuant to Section 3.1 hereof or
pursuant to an Incentive Compensation Plan as provided in Section 4 hereof. Any
payments or benefits payable to the Employee hereunder with respect to any
calendar year during which Employee is employed by Employer for less than the
entire such year shall, unless otherwise provided in the applicable plan or
arrangement, be prorated in accordance with the number of days in such calendar
year during which he is employed; provided, however, benefits or payments
payable to Employee under any life insurance plan or arrangement,
health-and-accident plan or arrangement or disability plan or arrangement shall
be payable on behalf of Employee by Employer for a period of six (6) months
after termination of employment hereunder.
6. Other Interests. Employee shall devote his time and attention solely
to the business and interest of Employer, and Employer shall be entitled to all
the benefits arising from or incident to Employee's services. During the
employment term, Employee shall not, without Employer's written consent, have
any interest in any business which conflicts either directly or indirectly with
Employer's business, except that Employee may hold an interest not exceeding
five percent (5%) in any corporation whose stock is publicly traded.
7. Confidentiality. It is specifically understood and agreed that some
of the Employer's business activities are secret in nature and constitute trade
secrets, including but not limited to Employer's "know-how", methods of
production and manufacturing, ideas and results of research and development,
specifications of equipment and materials, profit margins, planning information,
projections, customer and supplier information, reports, analyses, agreements,
as well as financial data and reports. All Employer's trade secrets and
proprietary information are and shall be the property of Employer, for its own
exclusive use and benefit, and Employee agrees that he will hold the same in
strictest confidence and will not at any time, either during or after his
employment by the Employer, use or permit the use of the same for his own
benefit or for the benefit of others unless authorized to do so by the
Employer's written consent or by a contract or agreement to which the Employer
is a party or by which it is bound.
8. Services Furnished. During the term of Employee's employment with
Employer, Employer shall furnish Employee with office space, secretarial
assistance and such other facilities and service as have heretofore been
furnished to Employee.
9. Other Positions. Employee agrees to serve without additional
compensation (other than compensation accruing to any other person serving in
such capacity), if elected or appointed a director of the Employer or any of its
subsidiaries, provided that Employee is indemnified for serving in any and all
such capacities on a basis no less favorable than is currently provided other
directors.
10. Termination by Employer. Employee's employment hereunder may be
terminated by Employer without any breach of this Agreement only under the
following circumstances:
10.1 If occurring prior to a Change in Control (as
hereinafter defined):
(A) Death. Employee's employment hereunder shall
terminate upon his death.
(B) Disability. If, as a result of Employee's
incapacity due to physical or mental illness, Employee shall have been absent or
substantially absent from his duties hereunder for the entire period of six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given (which may occur before or after the end of such six month
period) shall not have returned to the performance of his duties hereunder on a
full time basis, Employer may terminate Employee's employment hereunder.
Employee's absence or substantial absence from his duties will be treated as
resulting from incapacity due to physical or mental illness if Employee is
"totally disabled from his own occupation." Total disability from Employee's own
occupation will exist where (1) because of sickness or injury, Employee cannot
perform the important duties of his occupation, (2) Employee is either receiving
Doctor's Care or has furnished written proof acceptable to Employer that further
Doctor's Care would be of no benefit, and (3) Employee does not work at all.
Doctor's Care means the regular and personal care of a Doctor which, under the
prevailing medical standards, is appropriate for the condition causing the
disability.
(C) This Agreement may be terminated without cause,
in the sole, absolute and unreviewable discretion of Employer, by written notice
made by the President of Employer. Such notice shall state that the President of
Employer has determined that it is in the best interests of the Employer or its
shareholders to terminate this Agreement and the Employee's employment
hereunder.
10.2 If occurring subsequent to or resulting from a
Change in Control (as hereinafter defined):
(A) Death. Employee's employment hereunder shall
terminate upon his death.
(B) Disability. If, as a result of Employee's
incapacity due to physical or mental illness Employee shall have been absent or
substantially absent from his duties hereunder for the entire period of six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given (which may occur before or after the end of such six-month
period) shall not have returned to the performance of his duties hereunder on a
full time basis, Employer may terminate Employee's employment hereunder.
Incapacity due to physical or mental illness will be determined as provided in
Section 10.1(B); or
(C) Cause. Employer may terminate Employee's
employment hereunder for Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the willful and continued failure by
Employee to perform his duties hereunder (other than any failure resulting from
Employee's incapacity due to physical or mental illness) after demand for
substantial performance is delivered by Employer, which demand specifically
identifies the manner in which Employee has not substantially performed his
duties;
(ii) the willful and intentional act by the
Employee that is, in the reasonable determination of the Employer, materially
injurious to the Employer, monetarily or otherwise;
(iii) the breach by the Employee of any
material covenant of this Agreement; or
(iv) the conviction of the Employee of a
crime involving an act of moral turpitude or which is a felony resulting in or
intended to result, directly or indirectly, in gain or personal enrichment of
the Employee, relations of the Employee, or their affiliates at the expense of
the Employer.
For purposes of this Section 10, no act, or failure to act, on
Employee's part shall be considered willful unless done, or omitted to be done,
by him not in good faith and without the reasonable belief that his action(s) or
omission(s) was in the best interests of the Employer. Furthermore, no
termination of Employee's employment shall be effective until Notice of
Termination is given to Employee by Employer.
11. Termination by Employee. Employee may terminate his employment
hereunder upon thirty (30) days' written notice to Employer for any reason. If
Employee terminates his employment hereunder subsequent to a Change in Control
(as hereinafter defined) and such termination is made for any of the reasons
listed below, then such termination shall be deemed to have been done for good
reason ("Good Reason").
Reasons constituting Good Reason shall be limited to:
(A) any breach by Employer of any material provision
of this Agreement which has not been cured within ten (10) days after written
notice of such non-compliance is given by Employee to Employer;
(B) any demonstrable and material diminution of the
compensation, duties, responsibilities, authority or powers of Employee as such
relate to any positions or offices held by Employee immediately prior to such
Change in Control; provided that Employee provides a reasonable description of
any such diminution(s) and a statement that Employee finds, in good faith, that
the acts or omissions to act causing such diminution in duties,
responsibilities, authority or powers to be a material diminution and that, as
such, he elects to terminate his employment hereunder for Good Reason;
(C) the taking of, or failure to take, any action by
Employer which would deprive Employee of any material fringe benefit enjoyed at
the time of such Change in Control or the failure of Employer to include
Employee in any Employee Benefit Plan or Incentive Compensation Plan for which
Employee is properly eligible including the failure to pay Employee the amount,
if any, determined in good faith to be due and owing Employee pursuant to any
such Employee Benefit Plan or Incentive Compensation Plan; or
(D) any requirement by the Employer that Employee
relocate his primary business office to a geographical area greater than twenty
(20) miles from Employer's principal executive offices as existing immediately
prior to the applicable Change in Control or, if Employee is based in an office
other than Employer's principal executive office, the office of Employer where
Employee is based immediately prior to the most recent Change in Control.
For purposes of this Agreement, a "Change in Control" shall
mean an event or series of events which would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act"), as amended; provided that
the following events shall be deemed a Change in Control whether or not
reportable as a Change in Control pursuant to Regulation 14A of the Exchange
Act:
(i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the date hereof
(a "Person")) acquiring "beneficial ownership" (as defined in Rule 13D-3 under
the Exchange Act, as in effect on the date hereof ("Beneficial Ownership")) of
securities of the Employer representing 36% or more of the combined voting power
of the Employer's then outstanding securities;
(ii) any Person, who does not have
Beneficial Ownership of securities of the Employer representing 5% or more of
the combined voting power of the outstanding securities of the Employer on the
date hereof, acquiring Beneficial Ownership of more than 15% of the combined
voting power of the securities of the Employer then outstanding; or
(iii) a change in the Board of
Directors, which change is the result of a proxy solicitation(s) or other
action(s) to influence voting at a shareholders' meeting of the Company (other
than by voting one's own stock) by a Person or group of Persons who has
Beneficial Ownership of 5% or more of the combined voting power of the
securities of the Employer and which causes the Continuing Directors to cease to
be a majority of the Board of Directors of the Employer; provided, however, that
none of the foregoing events shall be deemed to be a Change in Control if the
event(s) or election(s) causing such change shall have been approved
specifically for purposes of this Agreement by the affirmative vote of at least
a majority of the members of the Continuing Directors.
For purposes of this Agreement, "Continuing Directors" shall
mean a member of the Board of Directors who (i) is a member of the Board of
Directors on the date hereof, or (ii) who subsequently becomes a member of the
Board of Directors and who either (x) is appointed or recommended for election
with the affirmative vote of a majority of the Directors then in office who are
Directors on the date hereof, or (y) is appointed or recommended for election
with the affirmative vote of a majority of the Directors then in office who are
described in subsections (i) and (ii)(x) above, as applicable.
12. Compensation Upon Termination or During Disability.
12.1 During any period that Employee fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness,
Employee shall continue to receive his full Base Salary at the rate then in
effect for such period until his employment is terminated pursuant to Section 10
hereof.
12.2 If Employee's employment is terminated by his death,
Employer shall pay to Employee's spouse, or if Employee leaves no spouse, to his
estate, commencing on the next succeeding day which is the last day of the
month, and monthly thereafter on the last day of each month, until a total of
three payments have been made, an amount equal to one twelfth of the Base Salary
in effect immediately prior to such termination.
12.3 If Employee's employment shall be terminated for Cause,
the Employer shall pay Employee his full Base Salary through the date of such
termination at the rate in effect at the time Notice of Termination is given and
the Employer shall have no further obligations to the Employee under this
Agreement.
12.4 If (A) Employer shall terminate the Employee's employment
hereunder other than as permitted hereby or (B) the Employee shall terminate his
employment for Good Reason, then Employer shall pay Employee in cash or by
cashier's check within five (5) business days of such termination as Employee's
sole remedy for such termination the sum of (1) Employee's Base Salary or, if
greater, the base compensation rate in effect immediately prior to such
termination, multiplied by a number equal to the number of years in the Original
Term, (2) an amount equal to the greater of the amount paid and/or payable to
Employee or accrued by the Employer for Employee pursuant to all applicable
Incentive Compensation Plans (i) for the fiscal year of the Employer prior to
the fiscal year of any Change in Control or (ii) for the immediately preceding
fiscal year of the Employer (even though in either (i) or (ii) payable in the
next succeeding fiscal year(s) of Employer), multiplied by a number equal to the
number of years in the Original Term, and (3) all cash amounts due pursuant to
Section 5 hereof. The receipt of such payments shall constitute the sole remedy
of Employee for such termination and the making of such payments shall
constitute full performance by Employer under this Agreement. For purpose of
this Section 12.4 only, the Original Term, if greater than 2.99 years, shall be
2.99 years.
12.5 If the Employee shall terminate his employment pursuant
to Section 11 hereof for any reason other than Good Reason, Employer shall pay
Employee his full Base Salary through the date of such termination at the rate
in effect at the time Notice of Termination is given.
12.6 If Employee's employment shall be terminated pursuant to
Section 10.1 (C) then Employer shall pay Employee and provide benefits to
Employee pursuant to the standard policy of Employer.
12.7 The Employee shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise.
13. Stock Options. In the event Employee's employment with Employer is
terminated pursuant to Section 11 for Good Reason, any and all options to
purchase stock (common or otherwise) in the Employer granted pursuant to any
plan or otherwise, or any equivalent or similar rights which appreciate or tend
to appreciate as the value of the Employer's stock appreciates, shall become
immediately accelerated and fully vested and any restrictions on such options or
equivalent or similar rights shall, to the extent permissible under applicable
securities laws, fully lapse. Employer shall endeavor to cause any restrictions
on such options or equivalent or similar rights not lapsed by operation of this
Section 13 to so lapse.
14. Covenant not to Compete. Employee, in consideration of the
compensation and other benefits to be received by him pursuant to this
Agreement, expressly agrees that he will not, within a radius of fifty (50)
miles from any place of business of the Employer, engage directly or indirectly,
as employee, principal, agent, partner, director or independent contractor or
otherwise in any business which is competitive to that of the Employer for a
period equal to the Original Term after he ceases to be employed by the
Employer.
15. Non-solicitation. Except in the case of a termination pursuant to
Section 11 for Good Reason, for a period equal to the Original Term following
termination of this Agreement, Employee shall not directly or indirectly solicit
any of Employer's customers existing as of the date of termination. If Employee
violates this Section 15, Section 14 or the confidentiality provisions of
Section 7, and continues to do so after Employer has notified Employee of such
violation, Employer shall have the right to seek equitable restraint of Employee
from such activities in contravention of the provisions of this Agreement,
including seeking and obtaining a temporary restraining order and/or injunction
against Employee; provided that Employer demonstrates that Employee's
solicitations result in direct financial detriment to Employer.
16. Arbitration. Except as provided in Section 15, if a dispute arises
between Employer and Employee concerning termination of this Agreement under
Section 10 or 11 above or otherwise, the disputed matter shall be submitted to
arbitration.
Any disputed matter shall be settled by arbitration in the
City of San Francisco, California in accordance with the commercial arbitration
rules of the American Arbitration Association ("AAA Rules"). Any judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The arbitrators shall have the authority to grant any
equitable and legal remedies that would be available in any judicial proceeding
instituted to resolve the disputed matter. The arbitrators shall apply the law
of the State of California in making any determination hereunder.
Notwithstanding anything to the contrary which may now or hereafter be contained
in the AAA Rules, the parties agree any such arbitration shall be conducted
before a panel of three arbitrators who shall be compensated for their services
at a rate to be determined by the American Arbitration Association in the event
the parties are not able to agree upon their rate of compensation. Each party
shall have the right to appoint one arbitrator (to be appointed within twenty
days of the notice of a dispute to be resolved by arbitration hereunder) and the
two arbitrators so chosen shall mutually agree upon the selection of the third,
impartial arbitrator. The majority decision of the arbitrators will be final and
conclusive upon the parties hereto.
17. Taxes. Notwithstanding anything herein to the contrary, Employer
shall not be obligated to pay any portion of any amount otherwise payable to
Employee hereunder if Employer is not reasonably able to deduct such portion
(the "Excess Amount") solely by operation of Section 280G (or such other
provision(s) as may from time to time be enacted governing the deductibility of
so- called "Golden Parachute Payments") of the Internal Revenue Code of 1986, as
amended (the "Code"). Employer shall be deemed able to reasonably deduct such
Excess Amount; and all amounts accruing hereunder, including the Excess Amount,
shall be paid Employee in the event Employee delivers to Employer an opinion of
an attorney that is reasonably acceptable to Employer stating such Excess Amount
is reasonably deductible by Employer by operation of Section 280G (or such other
provisions as may from time to time be enacted governing the deductibility of
so-called "Golden Parachute Payments") of the Code.
18. Miscellaneous.
18.1 Written notices required by this Agreement shall be sent
to Employer or Employee by certified mail, with a return receipt requested, to
Employer's registered address and to Employee's last shown address on Employer's
records, respectively. Such notice shall be deemed to be delivered two days
after mailing.
18.2 This Agreement contains the full and complete
understanding of the parties and supersedes all prior representations, promises,
agreements, and warranties, whether oral or written.
18.3 This Agreement shall be governed by and interpreted
according to the laws of the State of California.
18.4 With respect to Employer, this Agreement shall inure to
the benefit of and be binding upon any successors or assigns of Employer. With
respect to Employee, this Agreement shall not be assignable, but shall inure to
the benefit of and be binding upon the heirs, executors, administrators, and
successors of Employee.
18.5 The captions of the various sections of this Agreement
are inserted only for convenience and shall not be considered in construing this
Agreement.
18.6 This Agreement can be modified, amended or any of its
terms waived only by a writing signed by both parties.
18.7 If any provision of this Agreement shall be held invalid,
illegal or unenforceable, the remaining provisions of the Agreement shall remain
in full force and effect and the invalid, illegal or unenforceable provision
shall be limited or eliminated only to the extent necessary to remove such
invalidity, illegality or unenforceability in accordance with the applicable law
at that time.
18.8 Without limiting the provisions of Section 16, if either
party institutes arbitration proceedings pursuant to Section 16 or an action to
enforce the terms of this Agreement, the prevailing party in such proceeding or
action shall be entitled to recover reasonable attorneys' fees, costs and
expenses.
18.9 No remedy made available to Employer by any of the
provisions of this Agreement is intended to be exclusive of any other remedy.
Each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder as well as those remedies existing at law, in
equity, by statute or otherwise.
18.10 This Agreement supercedes any prior Employment Agreement
which may be in effect between Employer and Employee, and any such prior
agreement is hereby terminated.
IN WITNESS WHEREOF, this Agreement has been executed on the
day and year specified above.
EMPLOYER:
PLM INTERNATIONAL, INC.
By: /s/ Robert N. Tidball
Its: President
ATTEST:
/s/ Stephen M. Bess
EMPLOYEE:
/s/ J. Michael Allgood
ATTEST:
/s/ Stephen Peary