Exhibit 10.2
CONSULTING AGREEMENT
THIS AGREEMENT IS SUBJECT TO MANDATORY AND BINDING ARBITRATION
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This Consulting Agreement (the "Agreement') is entered into as of
January 1, 2005 (the "Effective Date"), by and between First Cash Financial
Services, Inc. (the "Company"), a Delaware corporation, and Xxxxxxx Xxxx
Xxxxxx (the "Consultant").
WHEREAS, in his former capacity as Chief Executive Officer, Consultant
has been primarily responsible for building the company from its inception,
and has provided a significant contribution to the success of the Company;
WHEREAS, Consultant has been an integral part of the Company attaining
fiscal/financial stability, and has been its primary guidance in determining
the strategic vision of the Company;
WHEREAS, notwithstanding the success of the Company under the
stewardship of Consultant, both the Company and Consultant believe that
long-term succession planning in the leadership of the Company is a
necessary and desirable part of good corporate governance, and in the best
interest of the Company and its shareholders;
WHEREAS, both the Company and Consultant believe that it is therefore
in the best interest of the Company and its shareholders that Consultant
relinquish his role as Chief Executive Officer, but remain committed to and
involved in the Company's growth and strategic planning activities through a
formalized, long-term consulting arrangement; and
WHEREAS, Consultant was employed by the Company pursuant to an
employment agreement dated September 30, 2000, between the parties
("Employment Agreement"), and the parties terminated that agreement on
December 30, 2004 and desire to enter into this consulting agreement so that
the Company may benefit from the valuable advice, counsel, and participation
of Consultant in future years based on the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties agree as follows:
1. PREVIOUS EMPLOYMENT AGREEMENT.
The parties terminated the Employment Agreement on December 30, 2004,
and waived and released all rights they had under the Employment Agreement
as of that date. Accordingly, the Employment Agreement has no further force
or effect.
2. INDEPENDENT CONTRACTOR.
The Company desires to contract for Consultant's services in his
capacity as an independent contractor, according to the following terms and
conditions.
3. DUTIES.
The Consultant will serve and be responsible to the Board of Directors
of the Company ("Board"). Under the direction of the Board, the Consultant
shall perform such duties, and have such powers, authority, functions,
duties and responsibilities for the Company and other entities affiliated
with the Company as may be determined from time to time by the Board.
However, the Consultant shall determine the means and methods to perform his
duties under this Agreement. The Board shall not control the means and
methods of Consultant in fulfilling his duties under this Agreement.
4. TERM OF ENGAGEMENT.
The term of engagement of Consultant shall begin on January 1, 2005 and
continue through December 31, 2014, subject to the provisions of Section 9.
The term of the Consultant's engagement hereunder shall commence on January
1, 2005.
5. EXTENT OF SERVICES.
Subject to the provisions of section 12, the Consultant may engage in
any other business related activities, as well as appropriate civic,
charitable, professional or trade association activities, and serve on one
or more other boards of directors of public or private companies, provided
these activities do not interfere or conflict materially with the
Consultant's duties and responsibilities to the Company.
6. NO FORCED RELOCATION.
The Consultant shall not be required to move his principal place of
residence from the Arlington, Texas area or to perform regular duties that
could reasonably be expected to require either such move against his wish or
to spend amounts of time each week outside the Arlington, Texas area which
are unreasonable in relation to the duties and responsibilities of the
Consultant hereunder, and the Company agrees that, if it requests the
Consultant to make such a move and the Consultant declines that request, (a)
that declination shall not constitute any basis for a termination of the
Consultant's engagement and (b) no animosity or prejudice will be held
against Consultant.
7. COMPENSATION.
(a) ANNUAL COMPENSATION RATE.
Annual compensation shall be payable to the Consultant by the Company
as a guaranteed minimum amount under this Agreement for each calendar year
during the period from January 1, 2005 to the termination date of the
Consultant's Engagement. That annual compensation shall (i) accrue daily on
the basis of a 365 year, (ii) be payable to the Consultant in the intervals
no less frequently than monthly, and (iii) be payable beginning January 1,
2005 at an annual rate of $500,000.
(b) MISCELLANEOUS.
(i) The Company shall supply Consultant with an automobile, the make
and model of which is subject to the approval of the Board, and the Company
shall be responsible for all expenses related thereto throughout the term of
this Agreement.
(ii) In consideration and in support of Consultant's duties under
this Agreement, which also include fostering the goodwill, growth and
earnings of the Company, the Company shall pay for a private club membership
for Consultant, for such amount as is reasonable taking into account the
powers, authority, functions, duties and responsibilities of Consultant,
subject to approval of the Board.
(iii) Consultant acknowledges that he shall be responsible for any
and all income and self-employment taxes (including federal, state and
local) resulting from compensation received (in cash and in-kind) pursuant
to this Agreement. This includes, without limitation, all federal, state
and local taxes on income and, social security & Medicare taxes applicable
to income earned in his role as Consultant.
(iv) The Consultant shall be entitled to prompt reimbursement of all
reasonable business expenses incurred by him in the performance of his
duties during the term of this Agreement, subject to the presenting of
appropriate vouchers and receipts in accordance with the Company's policies.
8. OTHER BENEFITS.
(a) HEALTH INSURANCE.
The Company shall pay all health insurance premiums for Consultant and
his spouse under the Company's health insurance program or a policy from an
independent third party carrier until they attain the age 65, respectively.
(b) LIFE INSURANCE.
For the term of this Agreement, the Company will provide, at its own
expense, term life insurance benefits under two separate policies, the first
of which, naming the Company as beneficiary, shall be at the Company's
option. The first policy shall designate the Company as the beneficiary and
loss payee. This policy shall be procured at the option of the Board and
shall have an amount of coverage, which shall be at the discretion of the
Board. The second policy shall be in the amount of $4 million with the
beneficiary and loss payee designated by the Consultant.
9. TERMINATION.
The Consultant's Engagement hereunder may be terminated prior to the
term provided for in Section 4 only under the following circumstances:
(a) DEATH.
The Consultant's Engagement shall terminate automatically on the date
of his death.
(b) DISABILITY.
If a Disability occurs and is continuing, the Consultant's Engagement
shall terminate 180 days after the Company gives the Consultant written
notice that it intends to terminate his Engagement on account of that
Disability, or on such later date as the Company specifies in such notice.
If the Consultant resumes the performance of substantially all of his duties
under this Agreement before the termination becomes effective, the notice of
intent to terminate shall be deemed to have been revoked. Disability of
Consultant shall not prevent the Company from making necessary changes
during the period of Consultant's Disability to conduct its affairs.
(c) VOLUNTARY TERMINATION.
The Consultant may terminate his Engagement at any time and without
Good Cause with 90 days' prior written notice to the Company.
(d) TERMINATION FOR GOOD CAUSE.
The Consultant may terminate his Engagement for Good Cause at any time
within 180 days (90 days if the Good Cause is the occurrence of a Change of
Control) after the Consultant becomes consciously aware that the facts and
circumstances constituting Good Cause exist and are continuing, by giving
the Company 30 days' prior written notice that the Consultant intends to
terminate his Engagement for Good Cause, which notice will state with
specificity the basis for Consultant's contention that Good Cause exists;
provided, however, that if Consultant terminates for Good Cause due to a
Change in Control, the Change in Control must actually occur. A Change in
Control will not be deemed to have actually occurred merely because of a
pending or possible event. The Consultant shall not have Good Cause to
terminate his Engagement solely by reason of the occurrence of a Change in
Control until 90 days after the date such Change in Control actually occurs.
The Consultant may not terminate for Good Cause if the facts and
circumstances constituting Good Cause are substantially cured by the Company
within 30 days following notice to the Company.
(e) INVOLUNTARY TERMINATION.
The Consultant's Engagement is at will. The Company reserves the right
to terminate the Consultant's Engagement at anytime whatsoever, without
cause, with 30 days' prior written notice to the Consultant.
(f) INVOLUNTARY TERMINATION FOR CAUSE.
The Company reserves the right to terminate the Consultant's Engagement
for Cause. In the event that the Company determines that Cause exists under
Section 11(f)(i) for the termination of the Consultant's Engagement, the
Company shall provide in writing (the "Notice of Cause"), the basis for that
determination and the manner, if any, in which the breach or neglect can be
cured. If either the Company has determined that the breach or neglect
cannot be cured, as set forth in the Notice of Cause, or has advised the
Consultant in the Notice of Cause of the manner in which the breach or
neglect can be cured, but the Consultant fails to substantially effect that
cure within 60 days after his receipt of the Notice of Cause, the Company
shall be entitled to give the Consultant written notice of the Company's
intention to terminate Consultant's Engagement for Cause (the "Notice of
Intent to Terminate"). Consultant shall have the right to object to any
Notice of Intent to Terminate Consultant's Engagement for Cause, by
furnishing the Company within ten days of receipt by Consultant of the
Notice of Intent to Terminate Consultant's Engagement for Cause, written
notice specifying the reasons Consultant contends either (i) Cause under
Section 11(f)(i) does not exist or has been timely cured or (ii) in the
circumstance of a Notice of Intent to Terminate Consultant's Engagement for
Cause under Section 11(f)(ii), that such Cause does not exist (the "Notice
of Intent to Join Issue over Cause"). The failure of Consultant to timely
furnish the Company with a Notice of Intent to Join Issue over Cause shall
serve to conclusively establish Cause hereunder, and the right of the
Company to terminate the Consultant's Engagement for Cause. Within 30 days
following its receipt of a timely Notice of Intent to Join Issue Over Cause,
the Company must either rescind the Notice of Intent to Terminate the
Consultant's Engagement for Cause, or file a demand for arbitration in
accordance with Section 25, to determine whether the Company is entitled to
terminate Consultant's Engagement for Cause. During the pendency of the
arbitration proceeding, and until such time as Consultant's Engagement is
terminated, Consultant shall be entitled to receive Compensation under this
Agreement. In the discretion of the Board, however, the Consultant may be
reassigned or suspended with pay, during not only the pendency of the
arbitration proceeding, but during the period from the date the Company
furnishes Consultant with a Notice of Intent to Terminate the Consultant's
Engagement for Cause until such date as the notice is rescinded, a
determination that Cause does not exist is made in the arbitration
proceeding or in the event of a determination that Cause does exist in the
arbitration proceeding, the effective date of the termination of
Consultant's Engagement for Cause. In the event that the Company determines
that Cause exists under Section 11(f)(ii) for the termination of the
Consultant's Engagement, it shall be entitled to immediately furnish
Consultant with a Notice of Intent to Terminate Consultant's Engagement
without providing a Notice of Cause or any opportunity prior to that notice
to contest that determination. Any termination of the Consultant's
Engagement for Cause pursuant to this Section 9(f) shall be effective
immediately upon the Consultant's receipt of the Company's written notice of
that termination and the Cause therefore.
(g) TERMINATION AT CONCLUSION OF TERM.
At the expiration of the term of engagement as stated in Section 4,
Consultant's engagement will automatically terminate.
10. TERMINATION PAYMENTS.
Unless effected under Section 9(g), if the Consultant's Engagement is
terminated during the term of this Agreement, the Consultant shall be
entitled to receive termination payments as follows:
(a) If the Consultant's Engagement is terminated under Section 9(a),
(b), (d), or (e), the Company will pay or cause to be paid to the
Consultant (or, in the case of a termination under Section 9(a), the
beneficiary the Consultant has designated in writing to the Company to
receive payment pursuant to this Section 10(a) or, in the absence of such
designation, the Consultant's estate): (i) the Accrued Compensation; (ii)
the Reimbursable Expenses; and (iii) the Termination Benefit.
(b) If the Consultant's Engagement is terminated under Section 9(c) or
(f) the Company will pay or cause to be paid to the Consultant: (i) the
Accrued Compensation determined as of and through the termination date of
the Consultant's Engagement; and (ii) the Reimbursable Expenses.
(c) Any payments to which the Consultant (or his designated beneficiary
or estate, if Section 9(a) applies) is entitled pursuant to paragraph (i) of
subsection (a) of this Section 10 or paragraph (i) of subsection (b) of this
Section 10, as applicable, will be paid in a single lump sum within thirty
days after the termination date of the Consultant's Engagement. At the sole
option and election of the Consultant (or his designated beneficiary or
estate, if Section 9(a) applies), which election shall be made within 30
days of the termination of Consultant's Engagement, the Company shall pay
the Consultant the Termination Benefit, if at all, (1) in a lump sum on a
present value basis; (2) on a semi-monthly basis (as if Consultant's
engagement had continued), or (3) on such other periodic basis reasonably
requested by Consultant (or his designated beneficiary or estate, if Section
9(a) applies), in which event, the payments will be discounted to the
extent the periodic basis selected by Consultant (or his designated
beneficiary or estate, if Section 9(a) applies) results in an earlier
payout to Consultant (or his designated beneficiary or estate, if
Section 9(a) applies) than if Consultant were paid on a semi-monthly basis.
The Company shall be given credit for all life proceeds paid to Consultant's
designated beneficiary or estate on any policy procured, paid for or
reimbursed by the Company pursuant to this Agreement (up to $4 million
in the case of life insurance). Upon the failure of the Consultant to
timely make an election as provided herein, such option and election
shall revert to the Company. However, if Section 9(a) applies and the
Consultant's designated beneficiary or estate is the beneficiary of one or
more insurance policies purchased by the Company and then in effect the
proceeds of which are payable to that beneficiary by reason of the
Consultant's death, then (i) the Company, at its option, may credit the
amount of those proceeds, as and when paid by the insurer to that
beneficiary, against the payment to which the Consultant's designated
beneficiary or estate is entitled pursuant to paragraph (iii) of subsection
(a) of this Section 10 and, if it exercises that option, (ii) the payment
otherwise due pursuant to that paragraph (iii) will bear interest on the
outstanding balance thereof from and including the fifth day after that
termination date to the date of payment by the insurer to that beneficiary
at the rate of interest specified in Section 30. Any payments to which the
Consultant (or his designated beneficiary or estate, if Section 9(a)
applies) is entitled pursuant to paragraphs (ii) and (iii) of subsection (a)
or (b) of this Section 10, as applicable, will be paid in a single lump sum
within five days after the termination date of the Consultant's Engagement
or as soon thereafter as is administratively feasible, together with
interest accrued thereon from and including the fifth day after that
termination date to the date of payment at the rate of interest specified in
Section 30.
(d) Except as provided in Sections 13, 23 and this Section, the Company
will have no payment obligations under this Agreement to the Consultant (or
his designated beneficiary or estate, if Section 9(a) applies) after the
termination date of the Consultant's Engagement.
11. DEFINITION OF TERMS.
The following terms used in this Agreement when capitalized shall have
the following meanings:
(a) ACCRUED COMPENSATION.
"Accrued Compensation" shall mean the compensation that has accrued,
and the compensation that would accrue through and including the last day of
the pay period in which the termination date of the Consultant's Engagement
occurs, under Section 7(a), which has not been paid to the Consultant as of
that termination date.
(b) ACQUIRING PERSON.
"Acquiring Person" shall mean any person who or which, together with
all Affiliates and Associates of such person, is or are the Beneficial Owner
of 50 percent or more of the shares of Common Stock then outstanding, but
does not include any Exempt Person; provided, however, that a person shall
not be or become an Acquiring Person if such person, together with its
Affiliates and Associates, shall become the Beneficial Owner of 50 percent
or more of the shares of Common Stock then outstanding solely as a result of
a reduction in the number of shares of Common Stock outstanding due to the
repurchase of Common Stock by the Company, unless and until such time as
such person or any Affiliate or Associate of such person shall purchase or
otherwise become the Beneficial Owner of additional shares of Common Stock
constituting 1% or more of the then outstanding shares of Common Stock or
any other person (or persons) who is (or collectively are) the Beneficial
Owner of shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock shall become an Affiliate or Associate of
such person, unless, in either such case, such person, together with all
Affiliates and Associates of such person, is not then the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding.
(c) AFFILIATE.
"Affiliate" has the meaning ascribed to that term in Rule 405 of
Regulation C.
(d) ASSOCIATE.
"Associate" shall mean, with reference to any person, (i) any
corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a subsidiary of the Company) of
which that person is an officer or general partner (or officer or general
partner of a general partner) or is, directly or indirectly, the Beneficial
Owner of 10% or more of any class of its equity securities, (ii) any trust
or other estate in which that person has a substantial beneficial interest
or for or of which that person serves as trustee or in a similar fiduciary
capacity and (iii) any relative or spouse of that person, or any relative of
that spouse, who has the same home as that person.
(e) BENEFICIAL OWNER.
A specified person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities: (i) of which that person or
any of that person's Affiliates or Associates, directly or indirectly, is
the "beneficial owner" (as determined pursuant to Rule l3d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise has the right to vote or dispose of, including pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this subparagraph (i) as a
result of an agreement, arrangement or understanding to vote that security
if that agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given in response to a public (that is, not
including a solicitation exempted by Exchange Act Rule 14a-2(b)(2)) proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act; and (B) is not then reportable by
such person on Exchange Act Schedule 13D (or any comparable or successor
report); (ii) which that person or any of that person's Affiliates or
Associates, directly or indirectly, has the right or obligation to acquire
(whether that right or obligation is exercisable or effective immediately or
only after the passage of time or the occurrence of an event) pursuant to
any agreement, arrangement or understanding (whether or not in writing) or
on the exercise of conversion rights, exchange rights, other rights,
warrants or options, or otherwise; provided, however, that a person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own,"
securities tendered pursuant to a tender or exchange offer made by that
person or any of that person's Affiliates or Associates until those tendered
securities are accepted for purchase or exchange; or (iii) which are
beneficially owned, directly or indirectly, by (A) any other person (or any
Affiliate or Associate thereof) with which the specified person or any of
the specified person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy or consent
as described in the proviso to subparagraph (i) of this definition) or
disposing of any voting securities of the Company or (B) any group (as that
term is used in Exchange Act Rule 1 3d-5(b)) of which that specified person
is a member; provided, however, that nothing in this definition shall cause
a person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities acquired
through that person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of that
acquisition. For purposes of this Agreement, "voting" a security shall
include voting, granting a proxy, acting by consent making a request or
demand relating to corporate action (including, without limitation, calling
a stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act) in respect of such security.
(f) CAUSE.
"Cause" shall mean that the Consultant has (i) willfully breached or
habitually neglected (otherwise than by reason of injury, or physical or
mental illness, or any disability as defined by the Americans with
Disabilities Act of 1990, Public Law 101336, 42 U.S.C.A. S 12101 et seq.)
material duties which he was required to perform under the terms of this
Agreement, or (ii) committed and been charged with act(s) of dishonesty or
fraud.
(g) CHANGE OF CONTROL.
"Change of Control" shall mean the occurrence of the following events:
(i) any person or entity becomes an Acquiring Person, or (ii) a merger of
the Company with or into, or a sale by the Company of its properties and
assets substantially as an entirety to, another person or entity; (iii) a
majority of the incumbent board of directors cease for any reason to
constitute at least a majority of the Board; and (iv) immediately after the
occurrence of (i), (ii) or (iii) above, any person or entity, other than an
Exempt Person, together with all Affiliates and Associates of such person or
entity, shall be the Beneficial Owner of 50% or more of the total voting
power of the then outstanding Voting Shares of the person or entity
surviving that transaction (in the case or a merger or consolidation), or
the person or entity acquiring those properties and assets substantially as
an entirety.
(h) COMPANY.
"Company" shall mean (i) First Cash Financial Services, Inc., a
Delaware corporation, and (ii) any person or entity that assumes the
obligations of "the Company" hereunder, by operation of law, pursuant to
Section 16 or otherwise.
(i) DISABILITY.
"Disability" shall mean that the Consultant, with reasonable
accommodation, has been unable to perform his essential duties under this
Agreement for a period of at least six consecutive months as a result of his
incapacity due to injury or physical or mental illness, any disability as
defined by the Americans with Disabilities Act of 1990, Public Law 101 336,
42 U.S.C.A. S 12101 et seq.
(j) ENGAGEMENT.
"Engagement" shall mean the compensated service provided by Consultant
as an independent contractor to the Company or a subsidiary of the Company
hereunder.
(k) GOOD CAUSE.
"Good Cause" for the Consultant's termination of his Engagement shall
mean: (i) any decrease in the Annual Compensation Rate under Section 7(a) or
any other violation hereof in any material respect by the Company; (ii) any
material reduction in the Consultant's compensation under Section 7;
(iii) the assignment to the Consultant of duties inconsistent in any
material respect with the Consultant's then current positions (including
status, offices, titles and reporting requirements), authority, duties
or responsibilities or any other action by the Company which results
in a material diminution in those positions, authority, duties or
responsibilities; (iv) any unapproved relocation of the Consultant; or (v)
the occurrence of a Change of Control. Good Cause shall not exist if the
Company cures within the period prescribed herein.
(l) REIMBURSABLE EXPENSES.
"Reimbursable Expenses" shall mean the expenses incurred by the
Consultant on or prior to the termination date of his Engagement which are
to be reimbursed to the Consultant under Section 7(b) and which have not
been reimbursed to the Consultant as of that date.
(m) TERMINATION BENEFIT.
"Termination Benefit" shall mean all Compensation provided for under
Section 7 through the remainder of the Consultant's term of engagement, it
being the parties' intent that, except for a termination under Section 9(c)
or (f), the Consultant shall receive all Compensation as if his term of
engagement continued as provided for under Section 4.
12. COVENANTS NOT TO COMPETE.
(a) Consultant's Acknowledgment. Consultant agrees and acknowledges
that in order to assure the Company that it will retain its value as a going
concern, it is necessary that Consultant undertake not to utilize his
special knowledge of the business and his relationships with customers and
suppliers to compete with the Company. Consultant further acknowledges that:
(i) The Company is and will be engaged in the business of
pawnshop services, payday loan services and check cashing
services;
(ii) Consultant will occupy a position of trust and confidence
with the Company prior to the date of this agreement and,
during such period and Consultant's engagement under this
agreement, Company's trade secrets and with other proprietary
and confidential information concerning the Company;
(iii) The agreements and covenants contained in this Section
14 are essential to protect the Company and the goodwill of
the business; and
(iv) Consultant's engagement with the Company has special, unique
and extraordinary value to the Company and the Company would
be irreparably damaged if Consultant were to provide services
to any person or entity in violation of the provisions of
this agreement.
(b) Company's Acknowledgement. The Company hereby acknowledges that it
will provide Consultant with confidential and trade secret information
relating to the operation of the Company's business, including but not
limited to, customer lists, operating manuals, and financing operations.
(c) Competitive Activities. Consultant hereby agrees that for a period
commencing on January 1, 2005 and ending one year following the later of
(i) termination of Consultant's engagement with the Company for whatever
reason, and (ii) the conclusion of the period, if any, during which the
Company is making payments to Consultant, he will not, directly or
indirectly, as employee, agent, consultant, stockholder, director, co-
partner or in any other individual or representative capacity, own,
operate, manage, control, engage in, invest in or participate in any manner
in, act as a consultant or advisor to, render services for (alone or in
association with any person, firm, corporation or entity), or otherwise
assist any person or entity (other than the Company) that engages in or
owns, invests in, operates, manages or controls any venture or enterprise
that directly or indirectly engages or proposes in engage in the business of
pawnshops, check cashing services, payday loan services or proposes to in
engage in the business of the distribution or sale of (i) products
distributed, sold or licensed by the Company or services provided by the
Company at the time of termination or (ii) products or services proposed at
the time of such termination to be distributed, sold, licensed or provided
by the Company within 50 miles of any of the Company's locations (the
"Territory"); provided, however, that nothing contained herein shall be
construed to prevent Consultant from investing in the stock of any competing
corporation listed on a national securities exchange or traded in the over-
the-counter market, but only if Consultant is not involved in the business
of said corporation and if Consultant and his associates (as such term is
defined in Regulation 14(A) promulgated under the Securities Exchange Act of
1934, as in effect on the date hereof), collectively, do not own more than
an aggregate of two percent of the stock of such corporation. With respect
to the Territory, Consultant specifically acknowledges that the Company has
conducted the business throughout those areas comprising the Territory and
the Company intends to continue to expand the business throughout the
Territory.
(d) Blue Pencil. If an arbitrator shall at any time deem the terms of
this agreement or any restrictive covenant too lengthy or the Territory too
extensive, the other provisions of this section 14 shall nevertheless stand,
the restrictive period shall be deemed to be the longest period permissible
by law under the circumstances and the Territory shall be deemed to comprise
the largest territory permissible by law under the circumstances. The
arbitrator in each case shall reduce the restricted period and/or the
Territory to permissible duration or size.
(e) Non-Solicitation of Employees. Consultant agrees that while engaged
as a consultant by the Company and for one year after the cessation of
the Consultant's engagement for whatever reason, the Consultant will not
recruit, hire or attempt to recruit or hire, directly or assisted by others,
any other employee of the Company with whom the Consultant had contact
during the Consultant's engagement with the Company. For the purposes of
this paragraph "contact" means any interaction whatsoever between the
Consultant and the other employee.
(f) Non-Solicitation of Customers. Consultant agrees that while engaged
by the Company as a consultant and for one year after the cessation of the
Consultant's engagement for whatever reason, the Consultant will not
directly or indirectly, for himself or on behalf of any other person,
partnership, company, corporation or other entity, solicit or attempt to
solicit, for the purpose of engaging in competition with the Company,
(i) Any person or entity whose account was serviced by Consultant
at the Company; or
(ii) Any person or entity who is or has been a customer of the
Company prior to Consultant's termination; or
(iii) Any person or entity the Company has targeted and
contacted prior to Consultants termination for the purpose of
establishing a customer relationship.
Consultant agrees that these restrictions are necessary to protect the
Company's legitimate business interests, and Consultant agrees that these
restrictions will not prevent Consultant from earning a livelihood.
l3. TAX INDEMNITY.
Should any of the payments of compensation, other incentive or
supplemental compensation, benefits, allowances, awards, payments,
reimbursements or other perquisites, or any other payment in the nature of
compensation, singularly, in any combination or in the aggregate, that are
provided for hereunder to be paid to or for the benefit of the Consultant be
determined or alleged to be subject to an excise or similar purpose tax
pursuant to Section 4999 of the Code, or any successor or other comparable
federal, state or local tax law by reason of being a "parachute payment"
(within the meaning of Section 2800 of the Code), the parties agree to
negotiate in good faith changes to this Agreement necessary to avoid such
excise or similar purpose tax, without diminishing Consultant's
compensation, other incentive or supplemental compensation, benefits,
allowances, awards, payments, reimbursements or other perquisites, or any
other payment in the nature of compensation. Alternatively, the Company
shall pay to the Consultant such additional compensation as is necessary
(after taking into account all federal, state and local taxes payable by the
Consultant as a result of the receipt of such additional compensation) to
place the Consultant in the same after-tax position (including federal,
state and local taxes) he would have been in had no such excise or similar
purpose tax (or interest or penalties thereon) been paid or incurred. The
Company hereby agrees to pay such additional compensation within the earlier
to occur of (i) five business days after the Consultant notifies the Company
that the Consultant intends to file a tax return taking the position that
such excise or similar purpose tax is due and payable in reliance on a
written opinion of the Consultant's tax counsel (such tax counsel to be
chosen solely by the Consultant) that it is more likely than not that such
excise tax is due and payable or (ii) 24 hours of any notice of or action by
the Company that it intends to take the position that such excise tax is due
and payable. The costs of obtaining the tax counsel opinion referred to in
clause (i) of the preceding sentence shall be borne by the Company, and as
long as such tax counsel was chosen by the Consultant in good faith, the
conclusions reached in such opinion shall not be challenged or disputed by
the Company. If the Consultant intends to make any payment with respect to
any such excise or similar purpose tax as a result of an adjustment to the
Consultant's tax liability by any federal, state or local tax authority, the
Company will pay such additional compensation by delivering its cashier's
check payable in such amount to the Consultant within five business days
after the Consultant notifies the Company of his intention to make such
payment. Without limiting the obligation of the Company hereunder, the
Consultant agrees, in the event the Consultant makes any payment pursuant to
the preceding sentence, to negotiate with the Company in good faith with
respect to procedures reasonably requested by the Company which would afford
the Company the ability to contest the imposition of such excise or similar
purpose tax; provided, however, that the Consultant will not be required to
afford the Company any right to contest the applicability of any such excise
or similar purpose tax to the extent that the Consultant reasonably
determines (based upon the opinion of his tax counsel) that such contest is
inconsistent with the overall tax interests of the Consultant.
14. LOCATIONS OF PERFORMANCE.
The Consultant's services shall be performed primarily in the vicinity
of Arlington, Texas. The parties acknowledge, however, that the Consultant
will be required to travel in connection with the performance of his duties.
l5. PROPRIETARY INFORMATION.
(a) The Consultant agrees to comply fully with the Company's policies
relating to non-disclosure of the Company's trade secrets and proprietary
information and processes. Without limiting the generality of the foregoing,
the Consultant will not, during the term of his Engagement, disclose any
such secrets, information or processes to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever except as
may be required by law or governmental agency or legal process, nor shall
the Consultant make use of any such property for his own purposes or for the
benefit of any person, firm, corporation or other entity (except the Company
or any of its subsidiaries) under any circumstances during or after the term
of his Engagement, provided that after the term of his Engagement this
provision shall not apply to secrets, information and processes that are
then in the public domain (provided that the Consultant was not responsible,
directly or indirectly, for such secrets, information or processes entering
the public domain without the Company's consent).
(b) The Consultant hereby sells, transfers and assigns to the Company
all the entire right, title and interest of the Consultant in and to all
inventions, ideas, disclosures and improvements, whether patented or
unpatented, and copyrightable material, to the extent made or conceived by
the Consultant solely or jointly with others during the term of this
Agreement The Consultant shall communicate promptly and disclose to the
Company, in such form as the Company requests, all information, details and
data pertaining to the aforementioned and, whether during the term hereof or
thereafter, the Consultant shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may
be required of the Consultant to permit the Company to file and prosecute
any patent applications relating to same and, as to copyrightable material,
to obtain copyright thereon.
(c) Trade secrets, proprietary information and processes shall not be
deemed to include information which is: (i) known to the Consultant at the
time it is disclosed to him; (ii) publicly known (or becomes publicly known)
without the fault or negligence of Consultant; (iii) received from a third
party without restriction and without breach of this Agreement; (iv)
approved for release by written authorization of the Company; or (v)
required to be disclosed by law or legal process; provided, however, that in
the event of a proposed disclosure pursuant to this subsection (c)(v), the
Consultant shall give the Company prior written notice before such
disclosure is made in a time and manner which will best provide the Company
with the ability to oppose such disclosure.
16. ASSIGNMENT.
This Agreement may not be assigned by either party; provided that the
Company may assign this Agreement (i) in connection with a merger or
consolidation involving the Company or a sale of its business, properties
and assets substantially as an entirety to the surviving corporation or
purchaser as the case may be, so long as such assignee assumes the Company's
obligations hereunder; and (ii) so long as the assignment in the reasonable
discretion of Consultant does not result in a materially increased risk of
non-performance of the Company's obligations hereunder by the assignee. The
Company shall require as a condition of such assignment any successor
(direct or indirect (including, without limitation, by becoming the sole
stockholder of the Company) and whether by purchase, merger, consolidation,
share exchange or otherwise) to the business, properties and assets of the
Company substantially as an entirety expressly to assume and agree to
perform this Agreement in the same manner and to the same extent the Company
would have been required to perform it had no such succession taken place.
This Agreement shall be binding upon all successors and assigns.
17. NOTICES.
Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and sent by registered or certified mail to the
Consultant at his residence maintained on the Company's records, or to the
Company at its address at 000 X. Xxxxx Xxxx. Xxxxx 000, Xxxxxxxxx, Xxxxx
00000, Attention: Corporate Secretary, or such other addresses as either
party shall notify the other in accordance with the above procedure.
18. FORCE MAJEURE.
Neither party shall be liable to the other for any delay or failure to
perform hereunder, which delay or failure is due to causes beyond the
control of said party, including, but not limited to: acts of God; acts of
the public enemy; acts of the United States of America or any state,
territory or political subdivision thereof or of the District of Columbia;
fires; floods; epidemics; quarantine restrictions; strikes; or freight
embargoes; provided, however, that this Section 18 will not relieve the
Company of any of its payment obligations to the Consultant under this
Agreement. Notwithstanding the foregoing provisions of this Section 18, in
every case the delay or failure to perform must be beyond the control and
without the fault or negligence of the party claiming excusable delay.
19. INTEGRATION.
This Agreement represents the entire agreement and understanding
between the parties as to the subject matter hereof and supersedes all prior
or contemporaneous agreements whether written or oral. No waiver, alteration
or modification of any of the provisions of this Agreement shall be binding
unless in writing and signed by duly authorized representatives of the
parties hereto.
20. WAIVER.
Failure or delay on the part of either party hereto to enforce any
right, power or privilege hereunder shall not be deemed to constitute a
waiver thereof. Additionally, a waiver by either party of a breach of any
promise herein by the other party shall not operate as or be construed to
constitute a waiver of any subsequent breach by such other party.
21. SAVINGS CLAUSE.
If any term, covenant or condition of this Agreement or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application of such
term, covenant or condition to persons or circumstances other than those as
to which it is held invalid or unenforceable shall not be affected thereby,
and each term, covenant or condition of this Agreement shall be valid and
enforced to the fullest extent permitted by law.
22. AUTHORITY TO CONTRACT.
The Company warrants and represents to the Consultant that the Company
has full authority to enter into this Agreement and to consummate the
transactions contemplated hereby and that this Agreement is not in conflict
with any other agreement to which the Company is a party or by which it may
be bound. The Company further warrants and represents to the Consultant that
the individual executing this Agreement on behalf of the Company has the
full power and authority to bind the Company to the terms hereof and has
been authorized to do so in accordance with the Company's articles or
certificate of incorporation and bylaws.
23. PAYMENT OF EXPENSES.
If at any time during the term hereof or afterwards: (a) there should
exist a dispute or conflict between the Consultant and the Company or
another Person as to the validity, interpretation or application of any term
or condition hereof, or as to the Consultant's entitlement to any benefit
intended to be bestowed hereby, which is not resolved to the satisfaction of
the Consultant, (b) the Consultant must (i) defend the validity of this
Agreement or (ii) contest any determination by the Company concerning the
amounts payable (or reimbursable) by the Company to the Consultant or (c)
the Consultant must prepare responses to an Internal Revenue Service ("IRS")
audit of, or otherwise defend, his personal income tax return for any year
the subject of any such audit, or an adverse determination, administrative
proceedings or civil litigation arising there from, which is occasioned by
or related to an audit by the IRS of the Company's income tax returns, then
the Company hereby unconditionally agrees: (a) on written demand of the
Company by the Consultant, to provide sums sufficient to advance and pay on
a current basis (either by paying directly or by reimbursing the Consultant)
not less than 30 days after a written request therefore is submitted by the
Consultant, all the Consultant's costs and expenses (including, without
limitation, attorney's fees, expenses of investigation, travel, lodging,
copying, delivery services and disbursements for the fees and expenses of
experts, etc.) incurred by the Consultant in connection with any such
matter; (b) the Consultant shall be entitled, on demand in accordance with
Section 25, below, to the entry of a mandatory injunction without the
necessity of posting any bond with respect thereto which compels the Company
to pay or advance such costs and expenses on a current basis; and (c) the
Company's obligations under this Section 23 will not be affected if the
Consultant is not the prevailing party in the final resolution of any such
matter unless it is determined pursuant to Section 25 that, in the case of
one or more of such matters, the Consultant has acted in bad faith or
without a reasonable basis for his position, in which event and, then only
with respect to such matter or matters, the successful or prevailing party
or parties shall be entitled to recover from the Consultant reasonable
attorneys' fees and other costs incurred in connection with that matter or
matters (including the amounts paid by the Company in respect of that matter
or matters pursuant to this Section 23), in addition to any other relief to
which it or they may be entitled.
24. REMEDIES.
In the event of a breach by the Consultant of Section 12 or 15 of this
Agreement, in addition to other remedies provided by applicable law, the
Company will be entitled to issuance of a temporary restraining order or
preliminary injunction enforcing its rights under such Section.
25. ***ARBITRATION***.
This Agreement Is Subject to Binding Arbitration. Any dispute or
controversy arising under or in connection with this Agreement or in any
manner associated with Consultant's engagement (other than those described
in Section 24 - Remedies) shall be settled exclusively by arbitration in
Arlington, Texas, in accordance with the rules of the American Arbitration
Association then in effect. The parties agree to execute and be bound by the
mutual agreement to arbitrate claims attached hereto as Attachment A. Should
Consultant revoke his signature under section (d) of paragraph 13 of the
attachment, this agreement shall be void.
26. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas.
27. WAIVER OF ACTUAL OR POTENTIAL CONFLICTS OF INTEREST.
Should it become necessary for Consultant to seek to enforce the terms
of this Agreement, the Company consents to Consultant's use of counsel which
either then or may have in the past represented the Company, provided that
counsel agrees to undertake Consultant's representation, and such
representation and waiver of actual or potential conflicts of interest is in
accordance with the Texas State Bar Rules, including the Texas Disciplinary
Rules of Professional Conduct. To the extent permitted by the Rules, the
Company waives any such actual or potential conflict of interest arising
thereby.
28. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same instrument.
29. INDEMNIFICATION.
The Consultant shall be indemnified by the Company to the maximum
permitted by the law of the state of the Company's incorporation, and by the
law of the state of incorporation of any subsidiary of the Company of which
the Consultant is a director.
3O. INTEREST.
If any amounts required to be paid or reimbursed to the Consultant
hereunder are not so paid or reimbursed at the times provided herein
(including amounts required to be paid by the Company pursuant to Sections
7, 13 and 23), those amounts shall bear interest at the rate of 7% from the
date those amounts were required to have been paid or reimbursed to the
Consultant until those amounts are finally and fully paid or reimbursed;
provided, however, that in no event shall the amount of interest contracted
for, charged or received hereunder exceed the maximum non-usurious amount
of interest allowed by applicable law. This rate (7% a.p.r.) shall also
serve as the discount rate for any present value calculations relating to
payment if the Termination Benefit, if any, under section 10(c).
31. TIME OF THE ESSENCE.
Time is of the essence with respect to any act required to be performed
by this Agreement.
32. PRIOR INSTRUMENTS UNAFFECTED.
Except for the Employment Agreement, which was terminated on December
30, 2004, all prior instruments between the Company and Consultant shall
remain in full force and effect and the terms and conditions thereof shall
not be affected by this Agreement.
FIRST CASH FINANCIAL SERVICES, INC. CONSULTANT
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxxx Xxxx Xxxxxx
-------------------------- -----------------------
Xxxxxxx X. Xxxxx, Director Xxxxxxx Xxxx Xxxxxx
ATTACHMENT "A"
MUTUAL AGREEMENT TO ARBITRATE
1. I, Xxxxxxx X. Xxxxxx, recognize that differences could arise between
First Cash Financial Services, Inc. ("the Company") and me during or
following my engagement with the Company. I understand and agree that by
entering into this Mutual Agreement to Arbitrate ("Agreement"), I gain the
benefits of a speedy, impartial dispute-resolution procedure.
2. 1 understand that any reference in this Agreement to the Company will be
a reference also to all stockholders, directors, officers, employees,
parents, subsidiaries and affiliated entities, all benefit plans, the
benefit plans' sponsors, fiduciaries, administrators, and all successors and
assigns of any of them.
Claims Covered by the Agreement
3. The Company and I mutually agree to the resolution by arbitration of all
claims or controversies ("claims"), whether or not arising out of my
engagement (or its termination), that the Company may have against me or
that I may have against the Company. The claims covered by this Agreement
include, but are not limited to, claims under my Consulting Agreement,
claims for wages or other compensation due; for breach of any contract or
covenant (express or implied); tort claims; claims for discrimination
(including, but not limited to, race sex, color, religion, national origin,
age (state or federal Age Discrimination in Employment Act), marital status,
veterans status, sexual preference, medical condition, handicap or
disability); claims for benefits (except where an employee benefit or
pension plan specifies that its claims procedure shall culminate in an
arbitration procedure different from this one); and claims for violation of
any federal, state, or other law, statute, regulation, or ordinance, except
claims excluded in the following paragraphs.
Claims Not Covered by the Agreement
4. Claims I may have for workers' compensation or unemployment compensation
benefits are not covered by this Agreement.
5. Claims of the Company covered by section 24 of my Consulting Agreement.
Arbitration
6. (a) Procedure for Injunctive Relief In the event either the Company or
myself seeks injunctive relief, the claim shall be administratively
expedited by the American Arbitration Association ("AAA"), which shall
appoint a single, neutral arbitrator for the limited purpose of deciding
such claim. Such arbitrator shall be a qualified member of the State Bar of
Texas in good standing, and preferably shall be a retired state or federal
district judge. The single arbitrator shall decide the claim for injunctive
relief immediately on hearing or receiving the parties' submissions (unless,
in the interests of justice, he must rule ex parte); provided, however, that
the single arbitrator shall rule on such claims within 24 hours of
submission of the claim to the AAA. The single arbitrator's ruling shall not
extend beyond 14 calendar days and on application by the claimant, up to an
additional 14 days following which, after a hearing on the claim for
injunctive relief, a temporary injunction may issue pending the award. Any
relief granted under this procedure for injunctive relief shall be
specifically enforceable in Tarrant County District Court on an expedited,
ex parte basis and shall not be the subject of any evidentiary hearing or
further submission by either party, but the court, on application to enforce
a temporary order, shall issue such orders as necessary to its enforcement.
(b) Procedure after a Claim for Injunctive Relief or where no Claim for
Injunctive Relief Is Made. The arbitrator shall be selected as follows: in
the event the Company and I agree on one arbitrator, such arbitrator shall
conduct the arbitration. In the event the Company and I do not agree, the
Company and I shall each select one independent, qualified arbitrator, and
the two arbitrators so selected shall select the third arbitrator. The
arbitrator(s) are herein referred to as the "Panel." The Company reserves
the right to object to any individual arbitrator who shall be employed by or
affiliated with a competing organization.
(c) The Arbitration shall take place at Arlington, Texas, or any other
location mutually agreeable to us. At the request of either of us,
arbitration proceedings will be conducted in the utmost secrecy; in such
case all documents, testimony and records shall be received, heard and
maintained by the Panel in secrecy, available for inspection only by the
Company or me and our respective attorneys and our respective experts, who
shall agree in advance and in writing to receive all such information
confidentially and to maintain such information in secrecy until such
information shall become generally known. The Panel shall be able to award
any and all relief, including relief of an equitable nature. The award
rendered by the Panel may be enforceable in any court having jurisdiction
thereof.
(d) The Company will pay all the fees and out-of-pocket expenses of
each arbitrator selected pursuant to this Section 5 and the AAA. In
addition, the Company will pay my reasonable attorneys' fees, unless the
arbitration is the result of a termination for cause as defined in Section
13(f)(ii) of the Consulting Agreement to which this Attachment is appended.
Requirements for Modification or Revocation
7. This Agreement to arbitrate shall survive the termination of my
engagement. It can only be revoked or modified by a writing signed by the
Company and I, which specifically states a mutual intent to revoke or modify
this Agreement.
Sole and Entire Agreement
8. This is the complete agreement of us on the subject of arbitration of
disputes [except for any arbitration agreement in connection with any
pension or benefit plan].
This Agreement supersedes any prior or contemporaneous oral or written
understanding on the subject.
9. Neither of us is relying on any representations, oral or written, on the
subject of the effect, enforceability or meaning of this Agreement, except
as specifically set forth in this Agreement.
Construction
10. If any provision of this Agreement is found to be void or otherwise
unenforceable, in whole or in part, such adjudication shall not affect the
validity of the remainder of the Agreement.
Consideration
11. The promises by the Company and by me to arbitrate differences, rather
than litigate them before courts or other bodes, provide consideration for
each other. In addition, I have entered into a Consulting Agreement as
further consideration for entering into this Agreement.
Not an Employment Agreement
12. This Arbitration Agreement is purely procedural. It does not provide any
substantive rights in addition to those provided by applicable law or my
Consulting Agreement.
Voluntary
13. I acknowledge that I have carefully read this agreement, that I
understand its terms, that all understandings and agreements between the
company and me relating to the subjects covered in the agreement are
contained in it, and that I have entered into the agreement voluntarily and
not in reliance on any promises or representations by the company other than
those contained in this agreement itself.
14. The Age Discrimination in Employment Act protects individuals over 40
years of age from age discrimination. The ADEA contains some special
requirements before an employee can give up the right to file a lawsuit in
court. The following provisions are designed to comply with those
requirements.
a. I agree that this Agreement to arbitrate is valuable to me, because
it permits a faster resolution of claims that I would receive in court.
b. I have been advised to consult an attorney before signing this.
c. I have 21 days to consider this Agreement. However, I may sign it
sooner if I wish to do so.
d. I have 7 days following my signing this Agreement to revoke my
signature, and the Agreement will not be legally binding until the 7 day
period has gone by.
15. I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS
THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF TO THAT
OPPORTUNITY TO THE EXTENT I WISH TO DO SO.
FIRST CASH FINANCIAL SERVICES, INC. CONSULTANT
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxxx Xxxx Xxxxxx
-------------------------- -----------------------
Xxxxxxx X. Xxxxx, Director Xxxxxxx Xxxx Xxxxxx
