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Exhibit 10.26
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 25th day of October 1996, 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 Xxxxxxx Xxxxxxxxx (the "Executive").
WITNESSETH:
In consideration of the mutual covenants contained herein, the parties
hereto agree as follow:
1. TERM: The Corporation hereby employs the Executive as Executive Vice
President of the Corporation, and the Executive agrees to serve the
Corporation as such, upon the terms and conditions hereof for a period
of three years commencing on the date hereof, unless Executive's
employment under the Agreement is otherwise terminated in accordance
with the provisions hereof.
2. DUTIES:
(a) Executive shall serve as an Executive Vice President 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 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. The
Executive further agrees that he will not engage, either directly or
indirectly, in any other business or occupation during the term of
employment hereunder. It is further understood that the terms of this
Agreement will not prohibit the Executive from engaging in personal
investment 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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October 18, 1996 to October 17, 1997 $225,000
October 18, 1997 to October 17, 1998 $250,000
October 18, 1998 to October 17, 1999 $275,000
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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
pursant to any bonus plan or arrangement for senior executives of the
Corporation as may be established at the Corporation's discretion.
However, nothing contained herein shall obligate the Corporation to pay
any bonus to the Executive, it being understood that the payment of any
such bonus shall be in the sole discretion of the Board of Directors,
and that the amount thereof, if any, may vary depending on actual
performance of the Corporation and/or the Executive, as determined by
the Board.
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) GENERAL BENEFITS: The Executive shall be entitled to participate in,
and receive benefits under, any pension, profit sharing, insurance,
hospitalization, medical, 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, and
the Executive shall not be deemed, by virtue of this Agreement, to have
any vested interest in 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.
(b) STOCK OPTIONS: The Executive will be awarded an initial grant of
100,000 Stock Options pursuant to the provision of the Company's 1996
Stock Option Plan. Vesting in such Options shall accrue over a five year
period in equal yearly amounts based upon the performance of the Company
and the Executive, as solely determined by the Board of Directors.
Should the Company terminate the Executive without cause duing the term
of this contract and should the Executive have vested in any portion of
such Options, then the remaining unvested Options for future years shall
vest in relationship to the percentage that the vested Options bear to
the Options that could have vested for the period irregardless of
whether such Options vested or not, due to the performance of the
Company or the Executive, as determined by the Board of Directors. If
upon completion of the Employment Agreement the Company
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determines not to continue to employ the Executive, then the remaining
unvested Options which the Executive would have been eligible to vest
in, in years four and five pursuant to the Stock Option Agreement, shall
vest in relationship to the percentage that the vested Options bear to
the Options that could have vested for the period covered by the
Employment Agreement, irregardless of whether such Options vested or
not, due to the performance of the Company or the Executive, as
determined by the Board of Directors.
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. 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.
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) any
willful misconduct of the Executive in connection with the performance
of any of his duties hereunder, including without limitation
misappropriation of funds or property of the Corporation, securing or
attempting to secure personally any profit in connection with any
transaction entered into on behalf of the Corporation or any willful and
intentional act having the effect of injuring the reputation, business
or business relationships of the Corporation; (ii) willful failure,
neglect, or refusal to perform the Executive's duties hereunder; (iii)
breach of any material covenants contained in this Agreement; or (iv)
conviction (or nolo contenders plea) in connection with any felony or
misdemeanor 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
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employee benefit plan, program, or policy. The Executive hereby
disclaims any right to receive a pro rata portion of any annual bonus
with respect to the fiscal year in which such termination for cause
occurs.
(b) TERMINATION WITHOUT CAUSE: If the Executive is terminated without
cause, the Corporation will be obligated to pay him, commencing
immediately, his base salary for the remaining term of this Agreement,
in addition to any other compensation and/or benefits herein provided.
9. NON-COMPETITION: SOLICITATION:
(a) The Executive agrees that 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, without the written consent of the Corporation and except as
otherwise provided herein, directly or indirectly, either individually
or as an employee, agent, partner, shareholder, consultant, option
holder, lender of money, guarantor or in any other capacity, 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 assign
thereof, nor will be solicit any other person to engage in any of the
foregoing activities. Participation in the management of any business
operation other than in connection with the management of a business
operation which is in direct competition with the Corporation or its
subsidiaries or affiliates or any successor or assign thereof shall not
be deemed to be a breach of this Section 10(a). The foregoing provisions
of this Section 10(a) shall not prohibit the ownership by the Executive
(as the result of open market purchase) of 1% 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 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.
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10. 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).
11. 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.
12. 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 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.
13. 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.
14. 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.
15. 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: 00 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
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provided, however, that any notice of change of address shall be
effective only upon receipt.
16. 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.
17. 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.
18. 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: /s/ XXXX XXXXXX
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Xxxx X. Xxxxxx, President and CEO
/s/ XXXXXXX XXXXXXXXX
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Executive, Xxxxxxx Xxxxxxxxx
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