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EXHIBIT 10.42
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 14th day of July 1999, by and between Central
Financial Acceptance Corporation, a Delaware corporation with its principal
offices at 0000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (the
"Corporation"), and Xxxx X. Xxxxxx (the "Executive").
W I T N E SS E T H :
In consideration of the mutual covenants contained herein, the parties
hereto agree as follow:
1. TERM: The Corporation hereby employs the Executive as Chairman
of the Board and Chief Executive Officer of the Corporation, and
the Executive agrees to serve the Corporation as such, upon the
terms and conditions hereof for a period of five years
commencing on the date hereof.
2. DUTIES:
(a) Executive shall serves as the Chairman of the Board of the
Corporation, with such duties and authority as are generally
incident to such positions, or shall serve in such other senior
management positions as the Corporation shall determine, provided
that such other positions shall be comparable in authority and
responsibility to the positions specified above. The Executive
will hold such senior offices in the Corporation and/or its
subsidiaries or affiliates to which he may be elected or
appointed from time to time, provided that such offices shall not
be inconsistent with his duties and authority as aforesaid.
(b) The Executive agrees that he will devote substantially all of
his time and attention to the affairs of the Corporation, and
will use his best efforts to promote the business and interests
of the Corporation. It is understood, however, that the foregoing
will not prohibit the Executive from engaging, conducting, or
participating, either directly or indirectly, in businesses that
do business with or are related to Banner's Central Electric,
Inc., West Coast Private Equity Partners, L.P., Central Rents
Holdings, Inc., Central Rents, Inc. and/or any of their
subsidiaries or affiliates. It is further understood that the
terms of this Agreement will not prohibit the Executive from
engaging in personal investment and business activities for
himself and his family which do not interfere with the
performance of his duties hereunder.
3. COMPENSATION: The Corporation will pay the Executive a salary as
set forth below, payable in equal installments in accordance with
customary payroll practices for senior executives of the
Corporation, in consideration for all services to be rendered by
the Executive hereunder (including, without limitation, all
services to be rendered by him as an officer of the Corporation
and/or its Subsidiaries and affiliates).
BASE SALARY
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September 16, 1999 to September 15, 2000 $245,000
September 16, 2000 to September 15, 2001 $270,000
September 16, 2001 to September 15, 2002 $295,000
September 16, 2002 to September 15, 2003 $320,000
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September 16, 2003 to September 15, 2004 $345,000
The Company may also pay the Executive an annual bonus with
respect to each fiscal year of the Corporation, either on an "ad
hoc" basis, or pursuant to any bonus plan or arrangement for
senior executives of the Corporation as may be established at the
Corporation's discretion.
Nothing contained herein shall prohibit the Board of Directors of
the Corporation, in its sole discretion, from increasing the
compensation payable to the Executive pursuant to this Agreement
and/or making available to the Executive other benefits in
addition to those benefits which the Executive is entitled to
hereunder.
4. EXPENSES: The Executive shall be entitled to reimbursement by the
Corporation, in accordance with the Corporation's policies then
applicable to senior executives at the Executive's level, against
appropriate vouchers or other receipts for authorized travel,
entertainment and other business expenses reasonably incurred by
him in the performance of his duties hereunder.
5. EXECUTIVE BENEFITS:
(a) SERP PLAN BENEFITS: The Executive shall continue to
participate in the Corporation's Supplemental Executive
Retirement Plan (the "SERP Plan"), and is fully vested in the
SERP Plan (including credit for five Post-Effective Date Years of
Service, as such term is defined in the SERP Plan) and his Normal
Retirement Date for all purposes shall be deemed to be December
31, 2000. If the Executive is terminated without "cause", as
defined in Paragraph 8 below, becomes disabled, or dies at any
time after the date hereof, then the Corporation will commence
immediately to pay the Executive or his estate under the SERP
Plan a benefit equal to his full vested interest (including
credit for five Post-Effective Date Years of Service) as if he
had worked to his Normal Retirement Date (the first day of the
month after the Executive attains age 60). Thus, by way of
example of the above contained provisions, if Executive retires
on December 31, 2000, the numerator of the fraction referred to
in the definition of Accrued Benefits in Section 2 (a) of the
SERP Plan shall be 13 and the denominator shall be 13. Further,
for purposes of the definition of Final Average Compensation in
Section 2 (j) of the SERP Plan, if the Executive's Final Average
Compensation must be calculated before July 14, 2004, his Final
Average Compensation shall be the higher of (i) as determined
pursuant to the SERP Plan and the provisions of this Agreement;
(ii) if he dies or becomes disabled, $245,000, or his then
current salary on an annualized basis, plus a pro rata estimate
of his bonus award for the current year pursuant to the Company's
Incentive Bonus Plan; or, (iii) if he is terminated without
cause, $345,000, plus an estimate of his bonus award for the
current year pursuant to the Company's Incentive Bonus Plan, but
in no event shall the bonus be less than $30,000. To the extent
of any inconsistency between this Agreement and the SERP Plan,
the terms of this Agreement shall prevail.
(b) GENERAL BENEFITS: The Executive shall be entitled to
participate in, and receive benefits under, any pension, profit
sharing, insurance, hospitalization, medical,
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disability, vacation or other employee benefit plan, program or
policy of the Corporation which may be in effect at any time
during the course of his employment by the Corporation, and which
shall be generally available to senior executives of the
Corporation occupying positions of comparable status or
responsibility, subject to the terms of such plans, programs or
policies. Notwithstanding the foregoing, the Corporation may in
its discretion and at any time, change or evoke any of its
employee benefits plans, programs or policies, other than the
SERP Plan and the Executive shall not be deemed, by virtue of
this Agreement, to have any vested interest in any such plans,
programs or policies, except as otherwise provided herein. The
Corporation will also provide the Executive, at the Corporation's
expense, with an automobile reasonably appropriate to the
Executive's position, as determined by the Corporation, for use
by the Executive in connection with the performance of his duties
hereunder.
(c) STOCK OPTIONS: The Executive is awarded an additional grant
of 100,000 at $5.00 per share, stock options pursuant to the
provision of the Company's 1996 Stock Option Plan, as amended.
Vesting in such options shall accrue over a five year period in
equal yearly amounts. Should the Company terminate the Executive
without cause during the term of the contract, then the remaining
unvested portion of such options shall vest immediately.
6. WITHHOLDING: All payment required to be made by the Corporation
to the Executive hereunder shall be subject to the withholding
of such amounts relating to taxes and other governmental
assessments as the Corporation may reasonable determine it is
obligated to withhold pursuant to any applicable law, rule or
regulation.
7. DEATH; PERMANENT DISABILITY: This Agreement shall terminate upon
the death of the Executive during the term of this Agreement,
except as otherwise provided herein. If the Executive fails to
perform the services required hereunder during the term of this
Agreement because of illness or other incapacity for any
consecutive period of more than 180 days, or for shorter periods
aggregating more than 180 days in any consecutive twelve-month
period (any such illness or incapacity being hereinafter
referred to as "permanent disability"), then the Corporation, in
its discretion, may at any time thereafter terminate this
Agreement upon not less than 10 days written notice thereof to
the Executive, and this agreement shall terminate and come to an
end upon the date set forth in said notice as if said date were
the termination date of this Agreement; provided, however, that
such termination shall not become effective if, prior to the
date when such notice is given, the Executive's illness or
incapacity shall end and he shall be physically and mentally
able to perform the services required hereunder, and shall have
taken up and begun performing such duties.
If the Executive's employment shall be terminated by reason of
his death or permanent disability, the Corporation shall be
obligated to pay the Executive or his estate, commencing
immediately, (i) a lump sum payment equal to the Executive's
base salary for the remaining term of this Agreement; (ii) a pro
rata portion of any annual bonus which the Executive would
otherwise have been entitled to receive
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pursuant to any bonus plan or arrangement for senior executives
of the Corporation (such pro rata portion to be payable at the
time such annual bonus would otherwise have been payable to the
Executive); and, (iii) subject to the terms thereof, any
benefits which may be due to the Executive on the date of
termination by reason of death or disability under the
provisions of this Agreement, or any employee benefit plan,
program or policy.
8. TERMINATION:
(a) TERMINATION FOR CAUSE: The Corporation may at any time during
the term of this Agreement terminate the employment of the
Executive for cause. Termination for cause shall be by written
notice which specifies the cause for termination, and termination
of employment shall be immediately effective upon the Corporation
giving the Executive such notice. For purposes of this Agreement,
"cause" shall mean (i) willful failure, gross neglect, or
unreasonable refusal to perform the Executive's duties hereunder;
and, (ii) conviction in connection with any felony involving
moral turpitude. If the Executive is terminated for cause, the
Corporation will be obligated to pay the Executive (i) only his
base salary up to the date upon which the Corporation notifies
him of his termination for cause, and (ii) subject to the terms
thereof, any benefits which may be due to the Executive under the
provisions of this Agreement, or any employee benefit plan,
program, or policy.
(b) TERMINATION WITHOUT CAUSE: If the Executive is terminated
without cause, then the Corporation will be obligated to pay him
or his estate, commencing immediately, his base salary, plus a
reasonable estimate of the Executive's bonus pursuant to the
Company's Incentive Bonus Plan for the remaining term of this
Agreement, in addition to any other compensation and /or benefits
herein provided. If the Executive becomes disabled or dies, then
the Company will be obligated to pay him or his estate,
commencing immediately, a lump sum payment equal to his base
salary for the remaining term of this Agreement, in addition to
any other compensation and/or benefits herein provided.
9. INSURANCE:
The Executive agrees that the Corporation may insure the life of
the Executive in such amounts as the Corporation may in its
discretion determine, and may designate the Corporation as the
beneficiary under such policy or policies. The Executive agrees
that he will submit to a physical examination upon the
Corporation's request, and will execute any applications or other
documents as may be required to procure such life insurance.
10. NON-COMPETITION; SOLICITATION:
(a) The Executive agrees that during his employment with the
Corporation and for any period following his termination which
period is greater than 12 months and for which the Executive has
been paid a lump sum by the Corporation in accordance with this
Agreement, he shall not, without the written consent of the
Corporation and except as otherwise provided herein, directly or
indirectly, either individually or as
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an employee, agent, partner, shareholder, option holder, lender
of money, or guarantor, participate in, engage in or have a
financial interest or management position or other interest in
any business, firm, corporation or management position or other
interest in any business, firm, corporation or other entity if
it competes directly with any business operation conducted by
the Corporation or its subsidiaries or affiliates or any
successor or assignor thereof, during the employment period or
at the time of termination. The foregoing provisions of this
Section 10(a) shall not prohibit the ownership by the Executive
of 10% or less of any class of capital stock of a corporation
which is regularly traded on a national securities exchange or
over-the-counter on the NASDAQ System.
(b) The Executive further agrees that at any time during his
employment with the Corporation and for any period following his
resignation or termination which period is greater than 12 months
and for which the Executive has been paid a lump sum by the
Corporation in accordance with this Agreement, he shall not
solicit (or assist or encourage the solicitation of ) any
employee of the Corporation or any of its subsidiaries or
affiliates to work for Executive or for any business, firm,
corporation or other entity in which the Executive, directly or
indirectly, in any capacity described in Section 10(a) hereof,
participates or engages (or expects to participate or engage) or
has (or expects to have) a financial interest or management
position.
(c) If any covenant contained in this Section 10, or any part
thereof, is held by a court of competent jurisdiction to be
unenforceable because of the duration of such provision, the
activity limited by such provision, or the subject and /or area
covered by such provision, then the court making such
determination shall construe such restriction so as to thereafter
limit or reduce the scope or duration of such provision or part
thereof to be valid and enforceable to the greatest extent
permissible under applicable law.
11. TRADE SECRETS, ETC.: The Executive agrees that he shall not,
during or after the termination of this Agreement, divulge,
furnish or make accessible to any person, firm, corporation or
other business entity, any information, trade secrets, technical
data or know-how relating to the business, business practices,
methods, products, processes, equipment, clients' prices or
other confidential or secret aspect of the business of the
Corporation and/or any subsidiary or affiliate, except as may be
required in good faith in the course of his employment with the
Corporation or by law, without the prior written consent of the
Corporation, unless such information shall become public
knowledge (other than by reason of Executive's breach of the
provisions hereof).
12. ACCEPTANCE BY EXECUTIVE: The Executive accepts all of the terms
and provisions of this Agreement and agrees to perform all of
the covenants on his part to be performed hereunder.
13. EQUITABLE REMEDIES: The Executive acknowledges that he has been
employed for his unique talents and that his leaving the employ
of the Corporation would seriously hamper the business of the
Corporation and that the Corporation will suffer irreparable
damage if any provisions of Sections 10 or 11 hereof are not
performed strictly in accordance with their terms or are
otherwise breached. The Executive
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hereby expressly agrees that the Corporation shall be entitled
as a matter of right to injunctive or other equitable relief, in
addition to all other remedies permitted by law, to prevent a
breach or violation by the Executive and to secure enforcement
of the provisions of Sections 10 or 11 hereof. Resort to such
equitable relief, however, shall not constitute a waiver or any
other rights or remedies which the Corporation may have.
14. ENTIRE AGREEMENT: This Agreement constitutes the entire
agreement between the parties hereto and there are no other
terms other than those contained herein. No variation hereof
shall be deemed valid unless in writing and signed by the
parties hereto, and no discharge of the terms hereof shall be
deemed valid unless by full performance of the parties hereto or
by a writing signed by the parties hereto. No waiver by the
Corporation or any breach by the Executive of any provision or
condition of this agreement to be performed by him shall be
deemed a waiver of a breach of a similar or dissimilar provision
or condition at the same time or any prior or subsequent time.
15. SEVERABILITY: The validity and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or
impaired in the event that any provision in this agreement shall
be declared invalid, illegal or unenforceable by any court of
competent jurisdiction.
16. NOTICES: All notices, request, demands and other communications
provided for by this Agreement shall be in writing and shall be
deemed to have been given at the time when mailed in the United
States enclosed in a registered or certified post-paid envelope,
return receipt requested, and addressed to the appropriate
parties at the address stated below, or to such changed
addresses as such parties may designate by notice;
Correspondence to: 0000 X. Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
provided, however, that any notice of change of address shall be
effective only upon receipt.
17. SUCCESSORS AND ASSIGNS: This Agreement in personal in its nature
and neither of the parties hereto shall, without the consent of
the other, assign or transfer this Agreement or any rights or
obligations hereunder (except for an assignment or transfer by
the Corporation to a successor as contemplated by the following
proviso); provided, however, that the provisions hereto shall
inure to the benefit of, and be binding upon, any successor of
the Corporation, whether by merger, consolidation, transfer of
all or substantially all of the assets of the Corporation, or
otherwise, and upon the Executive, his heirs, executors,
administrators and legal representatives.
18. GOVERNING LAW: This agreement and its validity, construction and
performance shall be governed in all respects by the internal
laws of the State of California without giving effect to any
principles of conflict of laws.
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19. HEADINGS: The headings in this agreement are for convenience of
reference only and shall not control or affect the meaning or
construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunder set their
hands and seals the day and year first above written.
CENTRAL FINANCIAL ACCEPTANCE CORPORATION
By:
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Xxxx X. Xxxxxx, Chairman of the Board
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Executive
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