EXHIBIT 10.1

 
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January 1, 2018
 
Mr. Ronald F. Valenta
5200 Jessen Drive
La Cañada, CA 91011
 
Dear Ron:
 
General Finance Corporation (the “Company”) is pleased to confirm the terms of
your employment agreement (this “Agreement”) under which you will serve as the
Executive Chairman of the Board of Directors of the Company (the “Board”)
commencing on January 1, 2018. The Company is listed on The NASDAQ Stock Market.
We believe the position of Executive Chairman will be rewarding and focused
upon, but not limited to, the traditional areas of mentoring our new Chief
Executive Officer (“CEO”), assisting the CEO in completing his strategic plan
and advising on capital allocation and procurement.
 
Your employment will be on the following terms and conditions:
 
1. Title and Responsibilities
 
1.1 You will serve as Executive Chairman of the Company effective January 1,
2018. Your duties and responsibilities shall be those normally and customarily
vested in an Executive Chairman, as incident to the duties set forth herein and
as set forth in the Bylaws of the Company. Some of your duties are listed on
Exhibit A.
 
1.2 You agree to obey all rules, regulations and special instructions of the
Company and all other rules, regulations, guides, handbooks, procedures,
policies and special instructions applicable to the Company’s business in
connection with your duties hereunder and you shall endeavor to improve your
ability and knowledge of the Company’s business in an effort to increase the
value of your services for the mutual benefit of the Company and you.
 
1.3 You will perform your responsibilities principally at the executive offices
of the Company.
 
2. Base Salary. Your base salary (“Base Salary”) will continue at $240,000 per
year, payable in bimonthly installments less applicable tax withholding; the
Base Salary will be reviewed annually.
 
3. Bonus. No later than the 15th day of the second month of equal quarter, you
will be eligible for a quarterly bonus of $46,250 and an annual performance
bonus for fiscal year 2018 and every year thereafter as determined by the
Company’s Board and Compensation Committee.
 
4. Equity Incentives. The Company has adopted the Amended and Restated 2014
Stock Incentive Plan (this plan, as it may be amended, supplemented or
superseded by any other stock incentive plans, the “Plan"). The Plan authorizes
the grant of stock options, share appreciation rights, restricted shares,
restricted share units, unrestricted shares, deferred share units and
performance and cash-settled awards (each of the foregoing, an “Award” and
collectively, the “Awards”). The Committee shall have discretion to determine
the value of any Awards other than restricted shares granted under this Section
4. Under this Agreement you will receive Awards granted to Board members.
 

 
 
5. Reimbursement of Expenses. The Company shall pay you a monthly allowance of
$2,500 per month. You will be reimbursed for reasonable and necessary
work-related expenses, including but not limited to, phone charges, travel
expenses, desk top computer, and other reasonable and necessary work-related
costs will be borne by the Company.
 
6. Employee Benefits. You will be entitled to participate on the same basis in
all offered benefits or programs as any other employee of the Company for
medical insurance and retirement programs. Medical and dental benefits will be
provided to you and your immediate family at no cost to you.
 
7. Term and Termination of Employment. Your new duties and responsibilities will
commence on January 1, 2018 (or such other date as may be agreed between you and
the Company) and will terminate on the earliest to occur of the following:
 
7.1 upon your death;
 
7.2 upon the delivery to you of written notice of termination by the Company if
you shall suffer a physical or mental disability which renders you unable to
perform your duties and obligations under this Agreement for either 60
consecutive days or 120 days in any 12-month period;
 
7.3 upon 30 days’ written notice from you to the Company;
 
7.4 upon written notice from you to the Company for one or more of the following
effected without your written consent (“Good Reason”), provided that such notice
is received within 90 days of the event or circumstance constituting Good
Reason: (a) a reduction in your Base Salary; (b) you are assigned duties and
responsibilities that are materially beneath those of an executive chairman and
provided that you notify the Company within five business days of the assignment
of such duties that you believe are the basis of termination of your employment
for Good Reason and the Company does not revoke such duties and
responsibilities;
 
7.5 upon delivery to you of written notice of termination by the Company (i) For
Cause, or (ii) without cause following receipt of written notice of termination
from you pursuant to Section 7.3 of this Agreement; or
 
7.6 upon delivery to you of written notice of termination by the Company without
cause.
 

 
 
8. Severance
 
8.1 Upon termination of your employment for any reason, you shall not be
entitled to any severance, except that if you terminate your employment for Good
Reason or there is a change of control of the Company (change of control is
defined as the majority of the Company’s outstanding shares are purchased by
another investor(s)), or the Company terminates your employment without cause,
you shall be entitled to a lump sum severance payment equal to 12 months’ Base
Salary as in effect on the date of termination (but prior to any reduction in
salary that entitled you to terminate your employment for Good Reason) provided
that you execute and deliver to the Company, and do not revoke, a written
release (the “Release”), in form and substance satisfactory to the Company, of
any and all claims against the Company and its subsidiaries, directors, officers
and affiliates with respect to all matters arising out of your employment by the
Company. The Company shall be entitled to defer payment of any amounts under
this Section 8 until the expiration of any period during which you shall have
the right to revoke the Release.
 
8.2 Notwithstanding the timing of payments set forth in this Agreement, if the
Company determines that you are a “specified employee” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended, and that, as a
result of such status, any portion of the payment under this Agreement would be
subject to additional taxation, the Company will delay paying any portion of
such payment until the earliest permissible date on which payments may commence
without triggering such additional taxation (with such delay not to exceed six
months), with the first such payment to include the amounts that would have been
paid earlier but for the above delay.
 
9. Certain Definitions. For purposes of this Agreement, the following
capitalized terms have the following meanings:
 
9.1 “For Cause” shall mean, in the context of a basis for termination of your
employment with the Company, that:
 
9.1.1 you breach any obligation, duty or agreement under this Agreement, which
breach is not cured or corrected within 15 days of written notice thereof from
the Company; or
 
9.1.2 you commit any act of personal dishonesty, fraud, breach of fiduciary duty
or trust; or
 
9.1.3 you are convicted of, or plead guilty or nolo contendere with respect to,
theft, fraud, a crime involving moral turpitude, or a felony under federal or
applicable state law; or
 
9.1.4 you commit any act of personal conduct that, in the reasonable opinion of
the Board, gives rise to a material risk of liability under federal or
applicable state law for discrimination or sexual or other forms of harassment
or other similar liabilities to subordinate employees; or
 
9.1.5 you commit continued and repeated substantive violations of specific
written directions of the Board, which directions are consistent with this
Agreement and your position as Executive Chairman, or continued and repeated
substantive failure to perform duties assigned by or pursuant to this Agreement;
provided that no discharge shall be deemed For Cause under this subsection 9.1.5
unless you first receive written notice from the Company advising you of the
specific acts or omissions alleged to constitute violations of written
directions or a material failure to perform your duties, and such violations or
material failure continue after you shall have had a reasonable opportunity to
correct the acts or omissions so complained of; or
 

 
 
9.1.6 you engage in conduct that is demonstrably and materially injurious to the
Company Group (as defined below), or that materially harms the reputation or
financial position of the Company Group (as defined below), unless the conduct
in question was undertaken in good faith on an informed basis with due care and
with a rational business purpose and based upon the honest belief that such
conduct was in the best interest of the Company Group (as defined below); or
 
9.1.7 you are found liable in any Securities and Exchange Commission (“SEC”) or
other civil or criminal securities law action or entering any cease and desist
order with respect to such action (regardless of whether or not you admit or
deny liability) where the conduct that is the subject of such action is
demonstrably and materially injurious to the Company Group (as defined below);
or
 
9.1.8 you (i) obstruct or impede, (ii) endeavor to influence, obstruct or
impede, or (iii) fail to materially cooperate with, any investigation authorized
by the Board or any governmental or self-regulatory entity (an “Investigation”)
(however, your failure to waive attorney-client privilege relating to
communications with your own attorney in connection with an Investigation shall
not constitute “Cause”); or
 
9.1.9 you made any material misrepresentations (or omissions) in connection with
your resume and other documents which may have been provided by you, and oral
statements regarding your employment history, education and experience, in
determining to enter into the Agreement.
 
9.2 “Company Group” means the Company and each corporation or entity controlled
directly or indirectly by the Company.
 
10. Employment “At Will.” Nothing in this Agreement constitutes a promise of
continued employment or employment for a specified term. By discussing the terms
of employment with the Company outlined herein, you agree and acknowledge that
your employment relationship with the Company would be at will.
 
11. Non-Solicitation. During the period from the date your employment with the
Company terminates through the second anniversary of such date, you will not
directly or indirectly, either alone or by action in concert with others:
(a) induce or attempt to influence any employee of any member of the Company
Group to terminate his or her employment with any member of the Company Group;
(b) employ or offer employment to any person who was employed by any member of
the Company Group at the time of termination of your employment with the
Company; or (c) induce or attempt to induce any customer, supplier, licensee or
other business relationship of any member of the Company Group to cease or
reduce its business with any member of the Company Group, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relationship and any member of the Company Group; or (d) solicit
business from any of the Company’s customers.
 

 
 
12. Confidentiality. You agree not to disclose or use at any time (whether
during or after your employment with the Company) for your own benefit or
purposes or the benefit or purposes of any other person any non-public
information regarding the Company Group and its business, operations, assets,
financial condition and properties, including, without limitation, trade
secrets, business plans, policies, pricing information and customer data,
provided that the foregoing covenant shall not restrict you from disclosing
information to the extent required by law. You agree that upon termination of
your employment with the Company for any reason, you will return to the Company
immediately all memoranda, books, papers, plans, information, letters and other
data, and all copies thereof or therefrom, in any way relating to the business
of the Company Group except that you may retain personal notes, notebooks,
diaries, rolodexes and addresses and phone numbers. You further agree that you
will not retain or use for your account at any time any trade names, trademark
or other proprietary business designation used or owned in connection with the
business of any member of the Company Group.
 
13.  Clawback Provisions. You agree to repay or forfeit, to the fullest extent
permitted by law, any bonus, incentive payment, equity award or other
compensation has been awarded or received if each of the following three
elements is satisfied:
 
13.1 the payment, grant or vesting of such compensation was based upon the
achievement of financial results that were subsequently the subject of a
restatement of financial statements of the Company filed with the SEC, or the
amount of the award was based upon the achievement of financial results which
subsequently were determined to have been overstated;
 
13.2 the Board determines in its reasonable discretion, exercised in good faith,
that you engaged in fraud, intentional misconduct or an intentional violation of
law or the Company policy that caused or contributed to the need for the
restatement or caused or contributed to the overstatement of the financial
results; and
 
13.3 the Board determines in its reasonable discretion, exercised in good faith,
that it is in the best interests of the Company and its stockholders for you to
repay or forfeit all or any portion of the bonus, incentive payment, equity
award or other compensation.
 
14. Withholding. The Company may deduct from any compensation payable to you
(including payments made pursuant to Section 9 of this Agreement in connection
with or following termination of employment) amounts sufficient to cover your
share of applicable federal, state and/or local income tax withholding, old-age
and survivors’ and other Social Security payments, state disability and other
insurance premiums and payments.
 
15. Entire Agreement. The foregoing constitutes the entire agreement between you
and the Company should you elect to proceed. By ultimately accepting, you and
the Company are agreeing to be bound by the terms of this Agreement, and only
this Agreement. In other words, you are not accepting the offer based on an
understanding or promise, oral or written, which is not contained in this
Agreement, as this Agreement would represent the entire agreement and
understanding between you and the Company regarding your employment with the
Company should you proceed. Any changes to the terms of this Agreement can only
be in writing and must be signed by you and either the President and Chief
Executive Officer or the Chairman of the Compensation Committee in order to be
valid and enforceable. Notwithstanding the foregoing, you acknowledge that the
Company has relied on your resume and other documents which may have been
provided by you, and oral statements regarding your employment history,
education and experience, in determining to enter into the Agreement, and
material misrepresentations (or omissions) in connection with such documents may
constitute the basis of termination For Cause, as contemplated by the definition
of For Cause.
 

 
 
16. Governing Law. This Agreement has been made and entered into in the State of
California and shall be construed in accordance with the laws of the State of
California.
 
17. Captions. The various captions of this Agreement are for reference only and
shall not be considered or referred to in resolving questions of interpretation
of this Agreement.
 
18. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
 
We believe that you would be a worthy addition to the Company and are capable of
making an outstanding contribution and that we, in turn, can offer you a
challenging and rewarding career. We look forward to working together with you.
 
Very truly yours,
 
GENERAL FINANCE CORPORATION
 
           
                                   Accepted and agreed as of
                                            
                          

                                   the date set for above
 
 
 
By       /s/ Susan L. Harris
Susan L. Harris
Chair of the Compensation Committee
/s/ Ronald F. Valenta
Ronald F. Valenta
 

 
 

  

 
EXHIBIT A
 
Description of Duties and Responsibilities
 
- 
All activities, responsibilities and authority related to the position of
Executive Chairman of the Board of Directors;
 
- 
Call meetings of the entire Board of Directors, quarterly or as deemed
necessary;
 
- 
Review the agenda for the Board sessions;
 
- 
Preside over the Board sessions;
 
- 
Work closely with the Lead Independent Director;
 
- 
Annually review succession planning of key senior managers and their likely
successors with the directors;
 
- 
The Executive Chairman should ensure the CEO, or their designee, should
coordinate the information flow to the directors, periodically discuss director
satisfaction with board materials with individual directors to other suggestions
on materials. Such information shall be distributed at least one week in advance
of regular Board meetings and twenty-four hours in advance of any special
meeting;
 
- 
Review the CEO’s strategic plan and provide suggestions and/or recommendations;
and
 
- 
Assist and advise on capital allocation and procurements.