EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
this 1st day of January, 1999, by and between American Finance Group, Inc. (the
"Company") and Donald R. Dugan ("Employee").
WHEREAS, Employee currently holds the position(s) of President of the
Company; and
WHEREAS, the Company's sole shareholder, PLM International, Inc.
("PLMI") recently announced publicly that its Board of Directors has engaged
Legg Mason Wood Walker, Incorporated to explore strategic alternatives for the
Company; and
WHEREAS, such announcement has led to uncertainty regarding the future
path of the Company and the long-term prospects for executive employment with
the Company; and
WHEREAS, Employee is an "employee at will", and as such the Company is
not legally obligated to continue his/her employment for any fixed period of
time; and
WHEREAS, the Company's Board of Directors ("Board") believes it is
important to the enhancement of shareholder value that, notwithstanding such
uncertainty, Employee continue his/her employment with the Company in order that
the Company can benefit from the continued availability of Employee's services
for a period continuing until after PLMI has completed its evaluation of
strategic alternatives regarding the Company and, should PLMI engage in any form
of transaction involving the Company to increase shareholder value, continuing
for a period of time after such transaction has been consummated; and
consequently, the Board intends to provide the incentives set forth herein for
Employee to remain in the Company's employ during such period; and
WHEREAS, as an additional inducement for Employee to remain in the
employ of the Company both before and after a change in control transaction,
this Agreement provides that certain severance benefits will be paid to Employee
in the event Employee's employment is terminated by the Company without cause or
by Employee for good reason following the execution of this Agreement through
June 30, 2000;
NOW, THEREFORE, in consideration of the above premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. Services. The Company hereby engages the exclusive services of
Employee as President with the powers and duties in that capacity consistent
with the powers and duties exercised by Employee as President as of the date
hereof, and as determined by the Board from time to time. Employee hereby agrees
to perform such services on the terms and conditions herein contained and to
abide by all rules and regulations for conduct that are now or may hereafter be
reasonably established by the Company. Employee shall be based at the principal
executive offices of the Company, except for required travel on the Company's
business to an extent substantially consistent with present business travel
obligations.
2. Agreement Term. The term of this Agreement shall be from January 1,
1999 through June 30, 2000. Employee's employment under this Agreement shall
continue during the term of this Agreement unless terminated sooner pursuant to
Sections 10 or 11 of this Agreement, and after the term of this Agreement,
Employee's employment shall continue at-will.
3. Compensation. The Company shall pay to Employee as full compensation
for all services performed for the Company, the sum of One Hundred Eighty Nine
Thousand Dollars ($189,000) per year, or such higher amount as may be agreed to
by the Company and Employee from time to time (the original amount or the
adjusted amount, if applicable, being the "Base Salary"), payable in equal
semi-monthly installments. Employee's compensation may be adjusted from time to
time, but it may not be reduced below the Base Salary without Employee's prior
written consent. The Company may deduct and withhold from all payments to be
made to Employee hereunder amounts required or, with Employee's written consent,
permitted to be deducted or withheld pursuant to any provisions of any
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.
A. Incentive Bonus. Employee shall be eligible to participate
in any bonus or incentive compensation plan in effect from time to time for
senior executives of the Company generally (each, an "Incentive Compensation
Plan"). To the extent not otherwise determined pursuant to the terms of any
Incentive Compensation Plan, (a) the Board shall have the sole discretion to
determine the amount of bonus or incentive compensation ("Incentive Bonus")
payable under such Incentive Compensation Plan, if any, and (b) Employee shall
not be entitled to payment of any Incentive Bonus unless he/she is employed by
the Company on the date such bonus is paid. Notwithstanding the foregoing, the
Company shall within thirty (30) days following a Change in Control (as defined
in Section 12 hereof), pay to Employee the amount, if any, of any Incentive
Bonus which the Board determines in its sole discretion has been earned by
Employee during the performance period ending as of the date the Change in
Control occurs, so long as Employee is employed by the Company as of the date
the Change in Control occurs.
B. Retention Bonus. The Company agrees to pay to Employee a
retention bonus under either of the following circumstances:
(i) In the absence of a Change in Control, during
the period of one (1) year following the date
of this Agreement, Employee shall have
remained employed by the Company continuously
throughout such period; or
(ii) In the event a Change in Control does occur
within one (1) year following the date of
this Agreement, Employee shall have remained
employed by the Company or its successor
continuously throughout the period of six (6)
consecutive months from the date of the
Change of Control.
The amount of the retention bonus payable under this Section 4(B) shall
be Forty Seven Thousand Two Hundred Fifty Dollars ($47,250). The retention bonus
shall be paid to Employee in cash within thirty (30) days after the date on
which Employee satisfies the conditions of either Section 4(B)(i) or Section
4(B)(ii) above, whichever is applicable. No amount paid to Employee as a
retention bonus hereunder shall be deemed to be in lieu of a bonus or incentive
compensation, if any, payable to Employee pursuant to any Incentive Compensation
Plan.
5. Other Benefits. During the term of this Agreement, the Company shall
maintain, and Employee shall be entitled to continue to participate in, all of
the Company'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,
life insurance plan and arrangement, health and accident plan and arrangement,
medical insurance plan and arrangement, disability plan and arrangement and
vacation plan) (the "Employee Benefit Plans"); provided, however, that this
Section 5 shall not apply to any of the Company's Incentive Compensation
Plan(s), the terms of which shall prevail. The Company 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 Company and does not result in
a proportionately greater reduction in the rights of or benefits to 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 the Company 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 Employee under any plan or arrangement presently
in effect or made available in the future shall be deemed to be in lieu of the
Base Salary payable to Employee pursuant to Section 3 hereof or any amount
payable to Employee pursuant to an Incentive Compensation Plan or retention
bonus as provided in Section 4 hereof.
6. Other Interests. Employee shall devote his/her full business time
and attention solely to the business and interests of the Company, and the
Company shall be entitled to all the benefits arising from or incident to
Employee's services. During the term of Employee's employment hereunder,
Employee shall not, without the Company's written consent, have any interest in
any business which competes either directly or indirectly with the Company's or
PLMI'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 Company's business activities are secret in nature and constitute trade
secrets, including but not limited to the Company's, PLMI's or any of their
subsidiaries' (the "Subsidiaries") "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 (collectively, the "Confidential Information"). All
Confidential Information is and shall be the property of the Company and/or PLMI
for each of their own exclusive use and benefit, and Employee agrees that he/she
will hold the same in strictest confidence and will not at any time, either
during or after his/her employment by the Company, communicate or divulge any
such Confidential Information to anyone other than the Company and those
designated by it, or use or permit the use of the same for his/her own benefit
or for the benefit of others unless authorized to do so by the Company's prior
written consent or by a contract or agreement to which the Company is a party or
by which it is bound. Employee's undertakings set forth in this Section 7 are in
addition to, and not in substitution of, any other obligation the Employee have,
whether by other agreement or imposed by law, regarding confidentiality and
disclosure of information, knowledge or data relating to the Company, PLMI and
their Subsidiaries.
8. Services Furnished. During the term of Employee's employment with
the Company, the Company 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 if elected or appointed a director of the Company 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 of the Company and its subsidiaries.
10. Termination by the Company. Employee's employment hereunder may be
terminated by the Company without any breach of this Agreement under the
following circumstances:
10.1 Death or Disability. The Company may terminate Employee's
employment hereunder either before or following a Change in Control under the
following circumstances:
A. Death. Employee's employment hereunder shall
automatically terminate upon his/her 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/her duties hereunder for a period of six (6) consecutive months,
and within thirty (30) days after a Notice of Termination (as hereinafter
defined) is given, which Notice of Termination may be given before or after the
end of such six month period, Employee shall not have returned to the
performance of his/her duties hereunder on a full-time basis, Employee's
employment shall terminate upon the expiration of such thirty (30) days.
Employee's absence or substantial absence from his/her duties will be treated as
resulting from incapacity due to physical or mental illness if Employee is
"totally disabled from his/her 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/her occupation, (2) Employee is
either receiving Doctor's Care or has furnished written proof acceptable to the
Company that further Doctor's Care would be of no benefit, and (3) Employee does
not work at all. Doctor's Care means regular and personal care of a Doctor
which, under prevailing medical standards, is appropriate for the condition
causing the disability.
10.2 Without Cause. The Company may terminate Employee's employment
during the term of this Agreement without cause, either before or following a
Change in Control, in the sole, absolute and unreviewable discretion of the
Company, by a Notice of Termination given by the Chairman of the Board stating
that the Board has determined that it is in the best interests of the Company or
its shareholders to terminate Employee's employment hereunder.
10.3 For Cause.
A. The Company may terminate Employee's employment during the
term of this Agreement for Cause, either before or following a Change in
Control, by a Notice of Termination given by the Chairman of the Board setting
forth one of the reasons specified in Section 10.3(B), below.
B. For purposes of this Agreement, "Cause" shall mean:
(i) The willful and continued failure by Employee
to perform his/her duties hereunder (other
than any failure resulting from Employee's
incapacity due to physical or mental
illness), which has not been cured within ten
(10) days after written demand for
substantial performance is delivered by the
Company to Employee, which demand
specifically identifies the manner in which
Employee has not substantially performed
his/her duties;
(ii) A willful and intentional act or omission by
Employee which is, in the reasonable
determination of the Company, materially
injurious to the Company, monetarily or
otherwise. For purposes of subsection (i)
above and this subsection (ii), no act or
omission on Employee's part shall be
considered willful and intentional unless
done, or omitted to be done, by him/her not
in good faith and without the reasonable
belief that his/her action(s) or omission(s)
was in the best interests of the Company;
(iii) The conviction of Employee of, or his/her
admission or plea of nolo contendere to, a
crime involving an act of moral turpitude
which is a felony or which results or is
intended to result, directly or indirectly,
in gain or personal enrichment of Employee,
relatives of Employee, or their affiliates at
the expense of the Company; or
(iv) The breach by Employee of any material
covenant of this Agreement which has not been
cured within ten (10) days after written
notice detailing such breach is given by the
Company to Employee;
provided, however, that, notwithstanding anything to the contrary contained in
clauses (i) and (ii) of this Section 10.3(B), "Cause" shall be deemed not to
include a refusal by Employee to execute any certificate or document that
Employee in good faith determines contains any untrue statement of a material
fact.
11. Termination by Employee.
A. Employee may terminate his/her employment during the term
of this Agreement upon thirty (30) days' Notice of Termination to the Company
for any reason. If Employee terminates his/her employment hereunder and such
termination is made for any of the reasons listed in Section 11(B) (such
reason(s) to be detailed in the Notice of Termination), such termination shall
be deemed to have been done for good reason ("(Good Reason").
B. Reasons constituting "Good Reason" shall be limited to:
(i) Any breach by the Company of any material
provision of this Agreement which has not
been cured within ten (10) days after written
notice detailing such non-compliance is given
by Employee to the Company;
(ii) Any demonstrable and material diminution of
the base compensation, duties,
responsibilities, authority or powers of
Employee as they relate to any positions or
offices held by Employee during the term of
this Agreement; provided that Employee
provides a reasonable description of any such
diminution(s) and a statement that Employee
finds, in good faith, such diminution to be a
material diminution and that, as such, he/she
elects to terminate his/her employment
hereunder for Good Reason;
(iii) The failure of the Company 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,
due and owing Employee pursuant to any such
Employee Benefit Plan or Incentive
Compensation Plan;
(iv) Any requirement by the Company that Employee
relocate his/her primary business office to a
geographical area greater than fifty (50)
miles from the Company 's principal executive
offices as existing on January 1, 1999, or if
Employee is based in an office other than the
Company's principal executive offices, fifty
(50) miles from the Company's office where
Employee is based as of January 1, 1999.
12. Definitions. The following definitions shall apply for purposes of
this Agreement:
A. Notice of Termination. Any purported termination by the
Company or by Employee shall be communicated by written Notice of Termination to
the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon. Any purported termination of Employee's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of this paragraph shall not be effective.
B. Date of Termination. "Date of Termination" shall mean, as
applicable, (a) if Employee's employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that Employee shall not
have returned to the performance of his/her duties on a full-time basis during
such thirty (30) day period), (b) the date specified in the Notice of
Termination in compliance with the terms of this Agreement, or (c) if no date is
specified, the date on which a Notice of Termination is given.
C. Change in Control. The term "Change in Control" shall mean
the occurrence of any one of the following events:
(i) Any person or group (a "Person"), within the
meaning of Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended
(the "Exchange Act"), acquiring "beneficial
ownership" ("Beneficial Ownership"), as
defined in Rule 13d-3 under the Exchange
Act, of securities of the Company
representing more than fifty percent (50%)
of the combined voting power of the
Company's then outstanding securities;
provided, however, in determining whether a
Change in Control has occurred, voting
securities which are acquired in a
"Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition
which would cause a Change in Control. A
"Non-Control Acquisition" shall mean an
acquisition by (a) an employee benefit plan
(or trust forming a part thereof) maintained
by (1) PLMI, (2) the Company or (3) any
corporation or other Person of which a
majority of its voting power or its voting
equity securities or equity interests is
owned, directly or indirectly, by PLMI or
the Company (for purposes of this
definition, a "Subsidiary"), (b) the Company
or its Subsidiaries, or (c) any Person in
connection with a Non-Control Transaction"
(as hereinafter defined);
(ii) A merger, consolidation or reorganization
(collectively, a "Transaction") involving the
Company unless such Transaction is a
"Non-Control Transaction." A "Non-Control
Transaction" shall mean a Transaction
involving the Company where:
(a) The stockholders of the Company
immediately before such Transaction own,
directly or indirectly, immediately following
such Transaction, at least fifty percent
(50%) of the combined voting power of the
outstanding voting securities of the
corporation resulting from such Transaction
(the "Surviving Corporation") in
substantially the same proportion as their
ownership of the voting securities of the
Company immediately before such Transaction,
or
(b) No Person, other than (1) the Company,
(2) PLMI, (3) any Subsidiary, or (4) any
employee benefit plan (or any trust forming a
part thereof) maintained the Company, PLMI,
or any Subsidiary, has Beneficial Ownership
of more than fifty percent (50%) of the
combined voting power of the Surviving
Corporation's then outstanding voting
securities; or
(iii) The sale or other disposition of all or
substantially all of the assets of the
Company or PLMI to any Person or Persons
(other than a transfer to PLMI or a
Subsidiary of the Company or PLMI).
For purposes of this Agreement, an event constituting a Change in Control shall
be deemed to have occurred upon the closing or consummation of such event.
Notwithstanding the foregoing provisions of this Section 12(C), a Change in
Control will not be deemed to have occurred with respect to Employee as a result
of an event specified in this Section 12(C) if Employee has a financial interest
in the Change in Control transaction other than as an employee of any successor
to the Company or any Person who purchases all or substantially all of the
Company's assets.
13. Compensation Upon Termination.
13.1 Death. If Employee's employment is terminated by his/her death,
the Company shall pay to Employee's spouse or, if Employee leaves no spouse, to
his/her estate, Employee's full Base Salary through the date of death and,
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 Employee's death. The Company shall also pay to Employee's
spouse or, if Employee leaves no spouse, to his/her estate, any accrued but
unused vacation and personal days.
13.2 Termination for Disability. If Employee's employment is terminated
pursuant to Section 10.1(B), the Company shall pay to Employee his/her full Base
Salary through the Date of Termination at the rate in effect at the time Notice
of Termination is given. The Company shall also pay to Employee any accrued but
unused vacation and personal days, and the Company shall also provide benefits
to Employee pursuant to the standard policy of the Company with respect to
terminated disabled employees.
13.3 Termination For Cause. If Employee's employment is terminated for
Cause, either before or after a Change in Control, the Company shall pay
Employee his/her full Base Salary (and any accrued but unused vacation and
personal days) through the Date of Termination at the rate in effect at the time
Notice of Termination is given, and the Company shall have no further
obligations to Employee under this Agreement.
13.4 Termination Without Cause or Termination by Employee For Good
Reason. If, during the term of this Agreement, the Company terminates Employee's
employment hereunder other than for Cause under Section 10.2, Death or
Disability, or (b) Employee terminates his/her employment for Good Reason, the
Company shall pay to Employee the severance benefits described below so long as,
upon the Company's request, Employee enters into a Release (the "Release")
substantially in the form attached hereto as Exhibit A, and such Release is not
revoked before the "Effective Date," as defined in the Release. If the Company
does not request the Release within fifteen (15) days of the Notice of
Termination, this condition shall be deemed waived by the Company.
The severance benefits payable to Employee under this Section
13.4 shall be as follows:
(i) The Company shall pay to Employee his/her full Base
Salary through the Date of Termination at the rate in
effect at the time the Notice of Termination is given
and shall pay any accrued but unused vacation and
personal days;
(ii) The Company shall also pay to Employee on the
Effective Date a lump sum amount equal to twenty four
(24) months of Employee's Base Salary at the highest
rate in effect during the twelve (12) months
immediately preceding the Date of Termination, less
customary payroll deductions;
(iii) The Company shall also pay to Employee on the
Effective Date the amount payable as a retention bonus
as set forth in Section 4(B), so long as the Company
has not yet paid such retention bonus to Employee; and
(iv) Employee shall continue to participate in all life
insurance, medical, health, dental and disability
plans, programs or arrangements ("Insurance Plans") in
which Employee participated immediately prior to the
Date of Termination on the same terms as Employee
participated immediately prior to the Date of
Termination for the shorter period of (a) twenty four
(24) months from the Date of Termination or (b)
Employee's commencement of full time employment with a
new company; provided that Employee's continued
participation is possible under the general terms and
provisions of such plans and programs and Employee will
continue to be obligated to pay the same employee
portion of any premium and any deductible and/or
co-payments associated with such insurance Plans as was
required immediately prior to the Date of Termination.
Employee's right to continued group benefits after any
period covered by the Company will be determined in
accordance with federal and state law.
13.5 Other Termination by Employee. If Employee terminates his/her
employment pursuant to Section 11 hereof for any reason other than Good Reason,
the Company shall pay to Employee his/her full Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given and
any accrued but unused vacation and personal days.
13.6 Mitigation. Employee shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and, except as otherwise provided in Section 13.4(iv), no payment
provided for in this Agreement shall be reduced by any compensation earned by
Employee as the result of employment by another employer after the termination
of his/her employment with the Company.
14. Covenant Not to Compete. In consideration of the mutual terms and
agreements set forth herein, Employee hereby agrees that until the first
anniversary of Employee's Date of Termination, (i) Employee will not recruit any
employee of the Company or its subsidiaries or solicit or induce, or attempt to
solicit or induce, any employee of the Company or its subsidiaries, provided
that nothing herein shall preclude Employee from hiring any person who contacts
Employee for employment and who has not been employed by the Company or its
subsidiaries at any time during the preceding six months, and (ii) provided that
Employee has received (or the Company has committed in writing to pay to
Employee) the severance benefits described in Section 13.4 hereof, Employee will
not solicit, divert or take away, or attempt to solicit, divert or take away,
the business or patronage of any of existing clients, customers or accounts of
the Company or its Subsidiaries. For purposes of this Section 14, a client,
customer or account of the Company shall be deemed to be an existing client,
customer or account if such client, customer or account is a party to a Master
Lease with the Company or is being invoiced on a regular basis by the Company as
of the Date of Termination. Notwithstanding anything in this Section 14 to the
contrary, the confidentiality provisions of Section 7 hereof shall continue to
apply in all circumstances arising under this Section 14.
15. Remedies. If Employee violates Section 14 or the confidentiality
provisions of Section 7, and continues to do so after the Company has notified
Employee of such violation, the Company 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.
16. Arbitration. Except as provided in Section 15, if a dispute arises
between the Company and Employee concerning any of the terms of this Agreement,
the disputed matter shall be submitted to arbitration. Any disputed matter shall
be settled by arbitration in the City of Boston, Massachusetts in accordance
with the labor 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 Commonwealth of Massachusetts 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. Employee specifically consents to such arbitration and hereby
represents such consent is willfully and voluntarily given without influence by
coercion or threatening statements from the Company.
17. Taxes. Notwithstanding anything herein to the contrary, the Company
shall not be obligated to pay any portion of any amount otherwise payable to
Employee hereunder if the Company is not reasonably able to deduct such portion
(the "Excess Amount") solely by operation of Section 28OG (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"). The Company shall be deemed able reasonably to deduct such
Excess Amount, and all amounts accruing hereunder, including the Excess Amount,
shall be paid to Employee, in the event Employee delivers to the Company an
opinion of an attorney that is reasonably acceptable to the Company stating such
Excess Amount is reasonably deductible by the Company by operation of Section
28OG (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. Review by Counsel. The Company and Employee do hereby acknowledge
and agree that they have each been represented by independent counsel of their
own choice throughout all negotiations which preceded the execution of this
Employment Agreement and that they fully understand and voluntarily accept this
Employment Agreement and have executed this Employment Agreement after seeking
the advice of said independent counsel.
19. Indemnification. During the period of his/her employment hereunder,
the Company agrees to indemnify Employee in his/her capacity as an officer of
the Company and, if applicable, as a member of the Board of Directors of the
Company or any Subsidiary, all to the maximum extent permitted by law.
20. Legal Fees. Each party to this Agreement shall bear its own
attorneys' fees, costs and expenses in connection with any action or proceeding
brought to enforce any term or provision of this Agreement.
21. Successors; Binding Agreement.
A. The Company shall require any successors or assigns
(whether direct or indirect by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company expressly
to assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place, and this Agreement shall inure to the benefit of any such
successor or assign. Failure of the Company to obtain such agreement upon the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Company in the same amount and
on the same terms as Employee would be entitled hereunder if Employee terminated
his/her employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination
B. This Agreement shall inure to the benefit of and be
enforceable by Employee's executors, administrators, successors, heirs,
distributees, devisees and legatees. If Employee should die after a Notice of
Termination has been delivered by Employee or while any amount would still be
payable to Employee hereunder if Employee had continued to live, all amounts due
to Employee under this Agreement, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Employee's devisee,
legatee or other designee or, if there be no such designee, to Employee's
estate.
22. Miscellaneous.
22.1 Written notices required by this Agreement shall be delivered to
the Company or Employee in person or sent by overnight courier or certified
mail, with a return receipt requested, to the Company's registered address and
to Employee's last shown address on the Company's records, respectively. Notice
sent by certified mail shall be deemed to be delivered two days after mailing,
and all other notices shall be deemed to be delivered when received.
22.2 This Agreement contains the full and complete understanding of the
parties regarding the subject matter contained herein and supersedes all prior
representations, promises, agreements and warranties, whether oral or written.
22.3 This Agreement shall be governed by and interpreted according to
the laws of the Commonwealth of Massachusetts.
22.4 The captions of the various sections of this Agreement are
inserted only for convenience and shall not be considered in construing this
Agreement.
22.5 This Agreement can be modified, amended or any of its terms waived
only by a writing signed by both parties.
22.6 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. Notwithstanding the foregoing provision, in the event that a payment is
made pursuant to Section 13.4 and Employee has entered into a Release and such
Release is determined to be invalid, illegal or unenforceable, Employee and the
Company shall negotiate in good faith to enter into a new release covering the
released claims.
22.7 No remedy made available to either party 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.
22.8 Notwithstanding the expiration or termination of this Agreement
for any reason whatsoever, the provisions of Sections 7, 14, 15, 16 and 19 shall
expressly survive expiration or termination of the Agreement.
IN WITNESS WHEREOF, the parties have executed this document under seal
as of the date specified above.
THE COMPANY:
AMERICAN FINANCE GROUP, INC.
By: /s/ Robert N. Tidball
Its: Executive Vice President
ATTEST:
EMPLOYEE:
/s/Donald R. Dugan
Donald R. Dugan
ATTEST: