AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.3
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), originally
effective as of March 15, 2001 (the “Effective Date”), is amended and restated
on December 23, 2008, by and between COMPUCREDIT CORPORATION, a Georgia
corporation ("CompuCredit"), and XXXXXXX X. XXXXXXX, an individual resident of
the State of Georgia ("Employee"). This Agreement amends, restates
and supersedes the employment agreement between CompuCredit and the Employee
that became effective as of the Effective Date (the “Previous Employment
Agreement”).
WHEREAS,
the parties desired to enter into a written agreement for the employment of
Employee by CompuCredit on the terms and conditions hereinafter stated which
superseded any and all written or oral arrangements between the parties
concerning the subject matter hereof, including, without limitation, that
certain employment agreement between CompuCredit and Employee dated as of
January 1, 1999, as amended from time to time; and
WHEREAS,
CompuCredit and the Employee entered into the Previous Employment Agreement,
effective as of March 15, 2001; and
WHEREAS,
CompuCredit and the Employee now desire to amend and restate the Previous
Employment Agreement to reflect the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended, and the final regulations issued
thereunder.
(a) This
Agreement shall automatically and immediately terminate upon the death of
Employee; or
(b) Either
party may terminate this Agreement upon the Complete Disability of Employee.
"Complete Disability", as used herein, shall mean the inability of Employee by
reason of any physical or mental impairment to perform fully and effectively, as
determined in the reasonable judgment of a competent physician selected in good
faith by CompuCredit, the Services on a full time basis for an aggregate of 90
days in any period of 180 consecutive days.
(c) In
addition to any other rights or remedies available to CompuCredit, CompuCredit
may, in its sole discretion, terminate this Agreement for Cause effective
immediately upon delivery of written notice to Employee. In this
Agreement, "Cause" means the reasonable, good faith determination of a majority
of the Board of Directors of CompuCredit that:
(i) (A)
Employee has committed an act constituting fraud, moral turpitude, deceit or
intentional material misrepresentation with respect to CompuCredit or any
client, customer or supplier of CompuCredit; (B) Employee has embezzled funds or
assets from CompuCredit or any client, customer or supplier of CompuCredit; or
(C) Employee has engaged in willful misconduct or gross negligence in the
performance of the Services;
(ii) Employee
has breached or defaulted in the performance of any material provision of this
Agreement and has not cured such breach or default to CompuCredit's reasonable
satisfaction within thirty (30) days after receiving notice thereof (provided
that any breach by Employee of any obligation under Section 9 will be grounds
for immediate termination for "Cause" without any notice or right to cure);
or
(iii) Employee's
conduct is materially detrimental to the reputation of CompuCredit which
Employee has not cured (if such conduct is curable in CompuCredit's reasonable
opinion) to CompuCredit's reasonable satisfaction within ten (10) days after
receiving notice thereof.
(d) The
date on which this Agreement expires or terminates for any reason is referred to
herein as the "Termination Date."
(e) Employee
may terminate this Agreement following a Change of Control (as defined below),
by providing CompuCredit at least thirty (30) days prior written notice of
termination. For purposes of this Agreement, "Change of Control"
shall mean the acquisition by any single person or entity or related persons or
entities of either substantially all the assets of CompuCredit or more than
fifty percent (50%) of the outstanding and issued common stock of
CompuCredit.
(a) During
the Term, CompuCredit shall pay Employee as compensation for the Services an
annual salary equal to $175,000. Such compensation shall be payable
in substantially equal semi-monthly installments or in such other installments
or at such other intervals as may be the policy of CompuCredit from time to
time, but no less frequently than monthly, and shall be subject to such
deductions and withholdings as are required by law or policies of CompuCredit in
effect from time to time. Employee's salary per annum may from time
to time be adjusted as agreed in writing by both CompuCredit and
Employee.
(b) Notwithstanding
anything to the contrary herein, if this Agreement is terminated for any of the
reasons set forth in Section 2 hereof, CompuCredit shall be released of its
obligation to pay further compensation or benefits to Employee as set forth in
this Agreement (except for salary already earned under Section 3(a) hereof
payable at the normal times set forth above) and Employee will not be entitled
to any severance or other benefits upon any termination of his employment
hereunder.
(a) Employee
acknowledges that the Proprietary Information that he has acquired and will
acquire, prior to and during the Term, includes and will include information
that could be used by Employee on behalf of a Competitor (as hereinafter
defined), its affiliates or others to the substantial detriment of
CompuCredit. Moreover, the parties recognize that Employee during the
course of his employment with CompuCredit will develop important relationships
with customers and others having valuable business relationships with
CompuCredit. In view of the foregoing, Employee acknowledges and
agrees that the restrictive covenants contained in this Agreement are reasonably
necessary to protect CompuCredit's legitimate business interests and
goodwill. If this Agreement is terminated by CompuCredit otherwise
than in accordance with Section 2.2 hereof, Employee will only be bound by the
covenant against competition if he is paid at his then current salary for the
one (1) year period of time from and after the Termination Date. Any
such payments to be made during such one (1) year period shall be made in the
same manner as Employee’s annual salary as of the Termination Date, subject to
Section 19 below.
(i) "COMPETITIVE
POSITION"- (A) the direct or indirect equity ownership (excluding ownership of
less than 2% of the equity of an entity listed on a major U.S. exchange or
traded on a NASDAQ over-the-counter market) or control of all or any portion of
a Competitor, or (B) any employment, consulting, partnership, advisory,
directorship, agency, promotional or independent contractor arrangement between
Employee and any Competitor whereby Employee is required to perform services
substantially similar to the Services.
(ii) "COMPETITOR"-
Any person or entity who provides products or services substantially similar to
Company Services (as hereinafter defined).
(iii) "CUSTOMERS"-
All persons or entities within the Territory (as hereinafter defined) during the
one-year period prior to the Termination Date (A) to whom Employee offered or
sold any of the CompuCredit's products or services (including, without
limitation, any opportunity to participate in any loan program established by
CompuCredit), (B) to whom were offered or sold any of CompuCredit's products or
services or about whom Employee had Proprietary Information, (C) who were
approached by CompuCredit with regard to a product or services, or (D) who were
identified as potential customers by CompuCredit's models or
processes.
(iv) "COMPANY
SERVICES"- (A) purchasing, holding, and selling credit card and home equity
loans (purchased, held or sold by CompuCredit), or portfolios thereof, or both,
(B) servicing services, and (C) engaging in the business of making credit card
and home equity loans to consumers.
(v) "TERRITORY"-
The United States, which is the territory within which customers and accounts of
CompuCredit will be located and where Employee will provide Services during the
term of his employment under this Agreement.
(i) take
any action in furtherance of a Competitive Position, including, without
limitation, entering into a Competitive Position; or
(ii) solicit,
entice or induce Customers for the purpose of providing services competitive
with any of the Company Services; or
(iii) solicit,
entice or induce (or attempt to do so) to leave employment with CompuCredit
anyone who is or was, during the last year of Employee's relationship with
CompuCredit, an employee of CompuCredit or an affiliate who would provide
similar services to a Competitor.
(d) Employee
hereby represents and warrants to CompuCredit that he is not now a party to any
agreement, court order, decree or other restriction which restricts him from
using or disclosing to any party any information deemed to be proprietary or
confidential or deemed to be a trade secret, of which in any way restricts
Employee from engaging in or rendering any of the Services.
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(a)
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If
to CompuCredit:
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CompuCredit
Corporation
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000
Xxxxxxxxx Xxxxxx Xxxxxxx
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Xxxxx
000
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Xxxxxxx,
Xxxxxxx 00000
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Attn: Xxxxx
X. Xxxxx
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(b)
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If
to Employee:
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Xxxxxxx
X. Xxxxxxx
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or in
each case to such other address as either party may from time to time designate
in writing to the other. Such notice or communication shall be deemed
to have been given as of the date so delivered or five (5) days after the date
so mailed.
14. GOVERNING
LAW. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Georgia.
15. ENTIRE
AGREEMENT; AMENDMENT. This Agreement contains the sole and entire
agreement between the parties hereto with respect to CompuCredit's employment of
Employee and supersedes all prior discussions and agreements between the parties
relating to such employment, including, without limitation, the Previous
Employment Agreement, and any such prior agreements shall, from and after the
date hereof, be null and void. Employee is a sophisticated
businessperson and has received such documents and other information as he has
deemed necessary to make his own independent judgment as to the merits of this
Agreement and the remuneration that he will receive as a result hereof; further,
it is hereby agreed by Employee that neither CompuCredit nor its affiliates have
made any representation to Employee other than those specifically set forth in
this Agreement. This Agreement shall not be modified or amended
except by an instrument in writing signed by or on behalf of all of the parties
hereto.
(a) Neither
Employee nor CompuCredit shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits in any manner which would
not be in compliance with Section 409A of the Internal Revenue Code (including
any transition or grandfather rules thereunder).
(b) If
Employee is a specified employee for purposes of Section 409A(a)(2)(B)(i) of the
Internal Revenue Code, any payment or provision of benefits in connection with a
separation from service (as determined for purposes of Section 409A of the
Internal Revenue Code) shall not be made until the earlier of (i) Employee’s
death or (ii) six (6) months after Employee’s separation from service (the “409A
Deferral Period”). In the event such payments are otherwise due to be
made in installments or periodically during the 409A Deferral Period, the
payments which would otherwise have been made in the 409A Deferral Period shall
be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends,
and the balance of the payments shall be made as otherwise
scheduled. In the event benefits are required to be deferred, any
such benefits may be provided during the 409A Deferral Period at Employee’s
expense, with Employee having a right to reimbursement from CompuCredit once the
409A Deferral Period ends, and the balance of the benefits shall be provided as
otherwise scheduled.
(c) For
purposes of this Agreement, all rights to payments and benefits hereunder shall
be treated as rights to receive a series of separate payments and benefits to
the fullest extent allowed by Section 409A of the Internal Revenue
Code.
(d) For
purposes of determining time of (but not entitlement to) payment or provision of
deferred compensation under this Agreement under Section 409A of the Internal
Revenue Code in connection with a termination of employment, termination of
employment will be read to mean a “separation from service” within the meaning
of Section 409A of the Internal Revenue Code where it is reasonably anticipated
that no further services would be performed after that date or that the level of
bona fide services Employee would perform after that date (whether as an
employee or independent contractor) would permanently decrease to no more than
twenty percent (20%) of the average level of bona fide services performed over
the immediately preceding thirty-six (36) month period.
(g) For
purposes of this Agreement, a specified employee for purposes of Section
409A(a)(2)(B)(i) of the Internal Revenue Code shall be determined on the basis
of the applicable 12-month period ending on the specified employee
identification date designated by CompuCredit consistently for purposes of this
Agreement and similar agreements or, if no such designation is made, based on
the default rules and regulations under Section 409A(a)(2)(B)(i) of the Internal
Revenue Code.
(h) Notwithstanding
any other provision of this Agreement, CompuCredit shall not be liable to
Employee if any payment or benefit which is to be provided pursuant to this
Agreement and which is considered deferred compensation subject to Section 409A
of the Internal Revenue Code otherwise fails to comply with, or be exempt from,
the requirements of Section 409A of the Internal Revenue Code.
COMPUCREDIT
CORPORATION
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By: /s/ Xxxxx X. Xxxxx |
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Xxxxx
X. Xxxxx,
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Chairman
and Chief Executive Officer
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By: /s/ Xxxxxxx X. Xxxxxxx |
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Xxxxxxx
X. Xxxxxxx
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