EXECUTIVE EMPLOYMENT
AGREEMENT
(AMENDED AND RESTATED AS OF JULY 15,
1992)
Under date of
December 15, 1986 ELECTRO RENT CORPORATION, a California
corporation (the “Company”), and the hereinafter named
Executive of the Company entered into an EXECUTIVE EMPLOYMENT
AGREEMENT.
Under date of
November 22, 1988 the Company and the Executive amended the
EXECUTIVE EMPLOYMENT AGREEMENT by executing AMENDMENT NO. ONE TO
EXECUTIVE EMPLOYMENT AGREEMENT.
The Company and
the Executive desire to amend the EXECUTIVE EMPLOYMENT AGREEMENT
further and to restate it into a single document as heretofore
amended and as further amended by this restatement.
Accordingly, in
consideration of the mutual promises herein contained, the Company
hereby amends and restates the EXECUTIVE EMPLOYMENT AGREEMENT as of
July 15, 1992 to read as follows:
EXECUTIVE EMPLOYMENT
AGREEMENT
This EXECUTIVE
EMPLOYMENT AGREEMENT (this “Agreement”) was originally
made and entered into the 15th day of December, 1986 (December
being the “Anniversary Month” referred to in 1.1(a)
hereof) by and between ELECTRO RENT CORPORATION, a California
corporation (the “Company”), and DANIEL GREENBERG (the
“Executive”) and was heretofore amended as of
November 22, 1988, and is being hereby further amended and
restated as of July 15, 1992.
A. The
Executive has served as the Chief Executive Officer and Chairman of
the Board of the Company, in which capacity he has made a major
contribution to the profitability, growth and financial strength of
the Company.
B. The
Executive has rendered such services to the Company with the
expectation and in reliance upon the Company’s expressed
intention to provide the Executive with supplementary retirement
and other benefits upon the termination of his service.
C. Although
no merger or comparable transaction is currently being contemplated
by the Company or by the Board of Directors of the Company (the
“Board of Directors”), and neither the Company nor the
Board of Directors is aware of any impending or contemplated
transactions involving such a change of control, general experience
in such matters has made clear the need for independent leadership
at the highest levels of the Company’s management.
1
D. Accordingly,
if the Company receives any proposal from any other person or
entity concerning a possible business combination with, or
acquisition of the equity securities of, the Company, the Company
believes it imperative that the Company and the Board of Directors
of the Company be able to rely upon the Executive to continue in
his position and that the Company be able to receive and rely upon
his advice, if it requests it, as to the best interests of the
Company and its shareholders without concern that he might be
distracted by the personal uncertainties and risks created by such
a proposal.
E. If the
Company should receive any such proposals, in addition to the
Executive’s regular duties, he may be called upon to assist
in the assessment of such proposals, to advise management and the
Board of Directors as to whether such proposals would be in the
best interests of the Company and its shareholders and to take such
other actions as the Board of Directors might determine to be
appropriate.
F. Accordingly,
the Company considers the continued employment of the Executive to
be in the best interests of the Company and its shareholders, and
the Company wishes to assure that it will have the continued
dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of the Company.
G. The
Executive is willing to remain in the employ of the Company upon
the understanding that the Company will provide him with income
security if his employment with the Company is terminated, and the
Company is willing to provide such income security to induce the
Executive to remain in the employ of the Company.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as
follows:
EMPLOYMENT AND
COMPENSATION
Section 1.1
Employment, Duties and Term.
(a) Subject
to the provisions of Article II of this Agreement, the Company
shall continue to employ the Executive, and the Executive shall
continue in the employ of the Company, to perform the duties
specified in Subsection 1.1(b) hereof for a term commencing on the
date of this Agreement (the “Employment Date”) and,
except as otherwise herein provided, continuing until the third
anniversary of the Employment Date. The three-year period between
the Employment Date and the third anniversary thereof shall be
referred to herein as the “Employment Term.” As each
month of the Employment Term expires, an additional month shall be
added to the Employment Term to the end that there shall at all
times be in effect approximately a three-year Employment Term
between the Company and the Executive; provided,
2
however, that
by written notice by either party to the other that the party
giving the notice has elected not to add an additional month to the
Employment Term, no additional time shall be added to the
Employment Term, and in that event the Executive’s employment
shall terminate at the expiration of the approximately three-year
Employment Term then in effect.
(b) In his
performance of services for the Company hereunder, the Executive
shall serve as an executive employee of the Company and shall have
such responsibilities as may from time to time be assigned or
delegated to him by the Board of Directors.
Section 1.2
Compensation During Employment Term. Subject to the
provisions of Article III of this Agreement, the Company agrees to
compensate the Executive during the Employment Term as
follows:
(a) Basic
Salary. During the continuation of the Executive’s
employment during the Employment Term hereunder, the Company shall
pay the Executive a basic salary at an annual rate of not less than
$300,000.00. The Board of Directors of the Company or its
Compensation Committee may increase at any time during the
Employment Term the basic salary payable to the Executive
hereunder.
The Executive
shall receive such salary in accordance with the Company’s
regular payroll practices, but not less often than monthly. The
salary payments shall be reduced by all federal, state and local
taxes and withholdings required by applicable laws and regulations.
The basic salary payable to the Executive pursuant to this
Subsection 1.2(a) shall, on each Anniversary Month of the
Employment Date, be increased or decreased by multiplying the
Executive’s basic salary during the first year of the
Employment Term times a fraction, the numerator of which is the
Index for the then current Anniversary Month, and the denominator
of which is the Index for the month in which this Agreement was
executed. As used herein (i) “Anniversary Month” shall
mean the calendar month each year corresponding to the month in or
as of which this Agreement was executed as specified in the opening
paragraph of this Agreement; and (ii) “Index” shall
mean the United states Department of Labor, Bureau of Labor
statistics Consumer Price Index — Urban Wage and Clerical
Workers, Los Angeles-Long Beach — Anaheim Metropolitan Area
(Base Year 1967=100). In the event the Index is not being published
at the times hereinabove referred to, the Index shall mean the
price index, compilation or data most nearly approximating the
Index hereinabove referred to. In the event the United States
Department of Labor utilizes a Base Year other than 1967, the Index
shall be adjusted to reflect its value in terms of the new Base
Year. Annual adjustments shall be made effective as of the first
day of each Anniversary Month.
(b)
Bonuses and Incentive Compensation. The Executive shall be
entitled to receive bonuses and incentive compensation each year in
addition to his basic salary. In determining the amount of such
bonus and incentive compensation, consideration shall be given to
all pertinent factors including, but not limited to the
following:
3
historic
policies and practices, business revenues, business profits, the
quality of the Executive’s performance and the value of his
contributions to the Company, the prevailing compensation levels
for comparable executive officers in businesses of size, complexity
and/or character similar to those of the Company.
(c)
Employee Benefits . During the continuation of the
Executive’s employment hereunder during the Employment Term,
the Executive shall be entitled to receive employee benefits
(including, but not limited to, medical insurance, life insurance,
retirement and deferred compensation benefits) and other
employment-related perquisites that are the greater of (i) the
employee benefits and perquisites provided from time to time by the
Company to its senior executives or (ii) the employee benefits
and perquisites to which the Executive was entitled immediately
prior to the Employment Date. Without limiting the generality of
the foregoing, during the continuation of the Executive’s
employment during the Employment Term hereunder, the Company shall
maintain without adverse change and credit the Executive with
benefits under the Employee Stock Owner ship and Savings
Plan.
(d)
Deferred Compensation . The Executive shall have and is
hereby given the right to defer prospectively part of the
Executive’s compensation on a contractual, non-funded basis
for a period specified by the Executive.
Section 2.1.
Certain Definitions .
(a) For the
purposes of this Agreement, a “Change of Control” shall
be deemed to have occurred if: (i) any person or entity (other
than the Executive), including a “group” (as defined in
Section 13(d) (3) of the Securities Exchange Act of 1934), is or
becomes the beneficial owner, directly or indirectly, of shares of
the capital stock of the Company having 20% or more of the total
number of votes that may be cast for the election of members of the
Board of Directors, or (ii) as a result of, or in connection
with, any cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions (a
“Transaction”), the persons who were members of the
Board of Directors immediately prior to the Transaction cease to
constitute a majority of the members of the Board of Directors or
of the board of directors of any successor to the
Company.
(b) For the
purposes of this Agreement, an “Involuntary Termination of
Employment” shall mean the time at which the
employee-employer relationship between the Executive and the
Company is terminated as a result of the Executive’s
discharge, retirement, death, Permanent Disability (as defined
below) or Involuntary Resignation
4
(as defined
below). For the purposes of this Subsection 2.1(b), the occurrence
of any of the
|
