EXHIBIT 10.10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") made this 30th day of March 1999, between
FirstAmerica Automotive, Inc. ("FAA", "Employer" or "Corporation"), and Xxxxxxx
Xxxxxxx ("Employee"). Employee began employment on September 1, 1998
("Commencement Date"). This Agreement's purpose is to establish in writing all
the terms and conditions of that employment, and specifically incorporates the
Non-Disclosure and Confidentiality Agreement.
Section 1. Position and Duties.
Employee shall be employed by the Corporation as its Chief Operating
Officer ("COO") reporting to the Corporation's Chief Executive Officer ("CEO"),
as of the Commencement Date. As COO, Employee agrees to devote his full business
time, energy and skill to his duties with the Corporation. These duties shall
include, but are not limited to, any duties consistent with the job position
which may be assigned to Employee from time to time by the Corporation's CEO.
Employee shall be subject to all the same rules, policies and procedures of
Employer to the extent they do not directly contradict the terms of this
Agreement. Employer retains the right to modify or eliminate any rule, policy or
procedure at any time at its sole discretion.
Section 2. Term.
Employee's employment with the Corporation pursuant to this Agreement is
"at-will" and is for no specified period of time beginning, subject to the
provisions regarding termination set forth below. Upon the termination of
Employee's employment with the Corporation, for any reason, neither Employee nor
the Corporation shall have any further obligation or liability to the other,
except as set forth in paragraphs 5 or 6 below. Any modification or rescission
of this "at-will" relationship must be in writing signed by the CEO of the
Corporation.
Section 3. Basic Compensation.
The Employer shall pay compensation to the Employee as set forth herein.
Such compensation shall be reviewed annually and modified as determined by the
sole discretion of the Corporate Board of Directors.
Salary
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An annual base salary of $425,000 (four hundred twenty-five thousand
dollars), approximately $35,417 (thirty-five thousand four hundred seventeen
dollars) per month gross pay per month, will be paid to Employee, subject to
applicable withholding, in accordance with the Corporation's normal payroll
procedures (the "Base Salary").
Benefits
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Employee shall have the right, on the same basis as other members of senior
management of the Corporation, to participate in and to receive benefits under
any of the Corporation's employee benefit plans, including the medical, dental,
vision and disability group insurance plans, if any. Employee shall also be
entitled to participate in any retirement plan maintained by the Corporation for
which he is eligible in accordance with its terms. In addition, Employee shall
be entitled to the benefits afforded to other members of senior management
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under the Corporation's vacation, holiday and business expense reimbursement
policies as outlined in the Employee Handbook.
Bonus
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Eligibility for an annual bonus of 60% of Employee's annual base salary
will be based on performance criteria to be determined by the CEO in accordance
with personal performance and corporate performance.
Corporate Vehicle
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Employee will be provided a corporate vehicle (and all associated expenses)
commensurate with his executive position.
Expense Reimbursement
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Upon receipt of proper documentation establishing the amount of such
expenses, the Corporation shall reimburse Employee for any reasonable business
expenses incurred.
Closing and Other Related Costs
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Corporation will pay Employee closing and related costs on the purchase of
a new home, not to exceed a total of $35,000 (thirty-five thousand dollars) upon
presentation of documentation showing said expenditures.
Section 4. Stock Options.
Upon the execution of this Agreement (or upon the Corporation's adoption,
and if required by law, qualification of a stock option plan-- whichever is the
latter), Employee shall be granted a non-statutory stock option to purchase
300,000 shares of the Corporation's Common Stock at a strike price of $4.00 per
share. Provided Employee remains an employee of the Corporation, these shares
shall vest at the rate of 5,000 shares per month following the Commencement
Date. In the event that Employee terminates his employment with the Corporation
for Good Reason (as defined in paragraph 5(c), below) following a Transfer of
Control (as also defined in paragraph 5(c), below), then, in addition to the
benefits set forth in paragraph 5, Employee shall become immediately vested in
all of the shares subject to the Initial Stock Option, effective as of the date
ten days prior to the Transfer of Control.
Except as otherwise provided herein, the Initial Stock Option shall be
subject to the terms and conditions of the Corporation's stock option plan and
the Corporation's standard form of stock option agreement, which Employee shall
be required to sign as a condition of the issuance of the Initial Stock Option.
Section 5. Benefits Upon Termination.
Employee agrees that his employment may be terminated by the Corporation at
any time, with or without cause. In the event of termination of Employee's
employment by the Corporation, based on the reasons set forth below, he shall be
entitled to the following:
a. Termination for Cause: If Employee's employment is terminated by the
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Corporation for cause, Employee shall be entitled to no compensation or benefits
from the Corporation other than those already earned under paragraphs
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3 and 4 through the date of his termination. For purposes of this Agreement, a
termination "for cause" occurs if (employee) is terminated for any of the
following reasons:
1. theft, dishonesty, or falsification of any employment or Corporation
records;
2. improper disclosure of the Corporation's confidential or proprietary
information, including a violation of the Non-Disclosure and Confidentiality
Agreement.;
3. any intentional act by Employee which has a material detrimental
effect on the Corporation's reputation or business as determined by the
Corporation; or,
4. any material breach of this Agreement by Employee, which breach is
not cured within thirty (30) days following written notice of such breach from
the Corporation.
b. Termination Other Than For Cause: If Employee's employment is terminated
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by the Corporation for any reason other than for cause, Employee shall be
entitled to the following separation benefits:
1. Continuation of Employee's Base Salary for a period of one year, such
salary continuation payments to be made in accordance with the Corporation's
ordinary payroll procedures without regard to whether Employee obtains
alternative employment in the interim; and
2. Payment of an amount equivalent to the annual average of the amounts
of annual Performance Bonuses previously paid to Employee, less applicable
withholding, with such payment to be made in twelve equal monthly installments.
c. Resignation for Good Reason: For purposes of paragraph 5(b) of this
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Agreement, Employee's resignation for Good Reason following a Transfer of
Control shall constitute a Termination Other Than for Cause.
For purposes of this Agreement, a "Transfer of Control" shall mean an
"Ownership Change Event" (as defined below) or a series of related Ownership
Change Events (collectively, the "Transaction") wherein the stockholders of the
Corporation immediately before the Transaction do not retain immediately after
the transaction direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting stock
of the Corporation or the corporation or the corporations to which the assets of
the Corporation were transferred (the "Transferee Corporation(s)"), as the case
may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include,
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without limitation, an interest resulting from ownership of the voting stock of
one or more corporations which, as a result of the Transaction, own the
Corporation or the Transferee Corporation(s), as the case may be, either
directly or through one or more subsidiary corporations. The Board shall have
the right to determine whether multiple sales or exchanges of the voting stock
of the Corporation or Multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
For purposes of this Agreement, "Good Reason" means any of the following
conditions, which condition(s) remain(s) in effect 30 days after written notice
to the Board from Employee of the following condition(s):
(i) a decrease in Employee's base salary and/or a material decrease in
Employee's standard management bonus plan or employee benefits;
(ii) a material, adverse change in Employee's title, authority,
responsibilities or duties, as measured against Employee's title, authority,
responsibilities or duties immediately prior to such change;
(iii) any material breach by the Corporation of any provision of this
Agreement, which breach is not cured within thirty (30) days following written
notice of such breach from Employee;
(iv) Any failure of the Company to obtain the assumption of this Agreement
by any successor or assign of the Company; or
(v) Any purported termination of Employee's employment for "material breach
of contract" which is not effected following a written notice satisfying the
requirements of paragraph 5.
For purposes of this Agreement, an "Ownership Change Event" shall be deemed
to have occurred if any of the following occurs with respect to the Corporation:
(i) The direct or indirect sale or exchange in a single or series of
related transactions by the stockholders of the Corporation of more than fifty
percent (50%) of the voting stock of the Corporation;
(ii) A merger or consolidation in which the Corporation is a party;
(iii) The sale, exchange, or transfer of all or substantially all of the
assets of the Corporation; or
(iv) A liquidation or dissolution of the Company.
Section 6. Benefits Upon Voluntary Termination.
In the event Employee voluntarily resigns from his employment with the
Corporation, or in the
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event that Employee's employment terminates as a result of his death or
disability, Employee shall be entitled to no compensation or benefits from the
Corporation other than those earned under paragraphs 3 and 4 above.
Section 7. Remedy for Breach.
The Employee acknowledges that a violation of any of the provisions of this
Agreement, including its restrictive covenants, will cause irreparable damage to
the Employer, its successors and assigns. The Employee consents that any
violation shall entitle the Employer or its successors and assigns, in addition
to any other rights or remedies it, or they, may have, to an immediate
injunction restraining any violation.
Section 8. Notices.
All notices, requests, demands, and other communications that are required
or may be given under this Agreement shall be in writing and shall be deemed to
have been duly given if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid to the CEO at the Corporate
Headquarters or to the Employee's last known home address, whichever is
applicable.
Section 9. Governing Laws.
This Agreement shall be construed and enforced in accordance with the laws
of the State of California excluding its conflict of law provisions.
Section 10. Entire Agreement.
This Agreement contains the entire agreement among the parties regarding
Employee's pay plan and the "at-will" employment relationship. All prior
negotiations, agreements, and understandings are superseded. This Agreement may
not be amended or revised except by a writing signed by all the parties.
Section 11. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the heirs,
legal representatives, and successors of the respective parties; provided
however, that this Agreement and all its rights may not be assigned by any party
except by or with the written consent of the other parties.
Section 12. Confidential Information and Nondisclosure Agreement.
Employee agrees to execute and abide by the terms and conditions of the
Company's standard employee Confidential Information and Nondisclosure
Agreement.
Section 13. Non-Solicitation of Employees.
In the event that Employee's employment with the Company is terminated for
any reason, Employee agrees that for a period of one year after the date of this
Agreement, he shall not, either directly or indirectly, solicit the services, or
attempt to solicit the services of any employee of the Corporation or its
affiliated entities to any other person or entity, without the written consent
of the President of the Corporation.
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Section 14. Attorneys' Fees.
The prevailing party shall be entitled to recover from the losing party is
attorneys' fees and costs incurred in any action brought to enforce any right
arising out of this Agreement.
Section 15. Mandatory Binding Arbitration.
Employee and Employer knowingly and voluntarily agree that in the event
there is any dispute arising out of Employee's employment with, seeking
employment with, or separation from the Employer that would require or allow
resort to any court, regardless of the kind or type of dispute, including, but
not limited to, claims of discrimination and harassment (except for claims
before the National Labor Relations Board or claims for physical injury under
the Worker's Compensation Act or disputes relating to misappropriation of
intellectual property), such dispute shall be submitted exclusively to final and
binding arbitration pursuant to the provisions of the Federal Arbitration Act,
in conformity with the procedures of the California Arbitration Act (Cal. Code
Civ. Proc. Sec. 1280 et seq.). All such arbitration proceedings shall take place
in the city of San Francisco, California, at a mutually agreed upon location.
Employee understands that by voluntarily agreeing to this binding arbitration
provision, both the Corporation and the Employer give up the right to a trial by
jury.
IT IS SO UNDERSTOOD AND AGREED:
EMPLOYEE:
Dated: March 30, 1999 Signature: /s/ Xxxxxxx Xxxxxxx
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EMPLOYER:
Dated: March 30, 1999 Signature: /s/ Xxxxxx Xxxxx
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