AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT BETWEEN AMERICA’S CAR-MART, INC. AND EDDIE L. HIGHT
EXHIBIT
10.2
AMENDMENT
NO. 1
TO
BETWEEN
AMERICA’S CAR-MART, INC. AND XXXXX X. XXXXX
This
Amendment No. 1 to the Employment Agreement (the “Amendment”) between America’s
Car-Mart, Inc., an Arkansas corporation (the “Company”) and Xxxxx X. Xxxxx
(the “Associate”) is
entered into and effective as of November 13, 2009.
RECITALS
WHEREAS, the Company and the
Associate have agreed to certain amendments to the Employment Agreement dated on
or as of May 1, 2007 between the Company and the Associate (the “Employment Agreement”) as set
forth below;
WHEREAS, all capitalized terms
not defined herein shall have the same meaning given to such terms in the
Employment Agreement.
NOW, THEREFORE, in
consideration of the mutual covenants and promises contained herein, the parties
hereto, each intending to be legally bound hereby, agree as
follows:
1. Amendment
of Section 3. Section 3 of the Employment Agreement is hereby
deleted in its entirety and replaced with the following:
Term. Unless
otherwise terminated in accordance with Sections 8, 9, 10 or 11, the Employment
Term shall be for a term ending April 30, 2015. This Agreement shall
be automatically renewed for successive additional Employment Terms of one (1)
year each unless notice of termination is given in writing by either party to
the other party at least thirty (30) days prior to the expiration of the initial
Employment Term or any renewal Employment Term.
2. Amendment
of Section 4(a). Section 4(a) of the Employment Agreement is
hereby deleted in its entirety and replaced with the following:
(a) Base
Salary and Benefits. The base annual salary of the Associate for his
employment services hereunder shall be $185,000 or such higher annual salary, if
any, as shall be approved by the Board of Directors of the Parent Company from
time to time (the “Base Salary”), which shall be payable in accordance with the
Company’s payroll policy. Effective as of May 1, 2010, the Base
Salary for the Associate shall be $250,000 or such higher annual salary, if any,
as shall be approved by the Board of Directors of the Parent Company from time
to time. Nothing contained herein shall affect or in any way limit
the Associate’s rights as an Associate of the Company to participate in any
Company 401(k) profit sharing plan or medical and life insurance programs
offered by the Company to its employees, or affect or in any way limit any other
benefits provided to the Associate as of the date hereof or as may be approved
by the Board of Directors of the Parent Company from time to time, all of which
shall be available to the Associate to the same extent as if this Agreement had
not existed, and compensation received by the Associate hereunder shall be in
addition to the foregoing.
*Filed
under application for confidential treatment.
3. Amendment
to Section 4(b). Section 4(b) of the Employment Agreement is
hereby deleted in its entirety and replaced with the following:
(b) Bonus.
(i) In
addition to the Base Salary and fringe benefits described above, the Associate
shall be eligible to earn an annual cash bonus (the “Bonus”) during the term
beginning May 1, 2007 and ending April 30, 2010. The Bonus range
shall be $24,000 to $36,000 per fiscal year, and shall be based upon Parent
Company’s Economic Profit Per Share as defined and described below. The Bonus
will depend on the Parent Company attaining a minimum of 85% of its projected
economic profit per share (in which case a $24,000 bonus would be paid) and will
increase ratably up to 115% of its projected economic profit per share (in which
case a $36,000 bonus would be paid), as set forth in Appendix A to this Agreement;
provided however, Associate expressly acknowledges and agrees that the projected
Parent Company Economic Profit Per Share for fiscal 2009 and fiscal 2010 shall
be subject to adjustment by the Compensation Committee of the Board of Directors
of the Parent Company, in its sole discretion.
(ii) In
addition to the Base Salary and fringe benefits described above and the Bonus
described above, the Associate shall be eligible to earn an additional cash
bonus of $36,000 for the period beginning May 1, 2009 and ending April 30, 2010
if for such period Parent Company’s GAAP Earnings Per Share (as defined below)
is $[X.XX]* or more; provided, however, that for purposes of this Section
4(b)(ii), the Parent Company’s GAAP Earnings Per Share shall exclude any and all
compensation expense or charges associated with the amendments dated as of
November 13, 2009 to the Employment Agreements dated as of May 1, 2007, between
the Company and its “named executive officers” (as listed in the Parent
Company’s annual definitive proxy statement filed with the Securities and
Exchange Commission).
(iii) In
addition to the Base Salary and fringe benefits described above, the Associate
shall be eligible to earn a Bonus for each of the fiscal years during the term
beginning May 1, 2010 and ending April 30, 2015. The Bonus shall be
based upon Parent Company’s projected fully diluted earnings per share
calculated in accordance with GAAP for each fiscal year (“GAAP Earnings Per
Share”). The Bonus will depend on the Parent Company attaining a minimum of 95%
of its projected GAAP Earnings Per Share, as set forth in Appendix C to this
Agreement.
*Filed
under application for confidential treatment.
2
(iv) “Parent
Company’s Economic Profit Per Share” shall be defined as net operating profit
after tax, less a capital charge (after tax) applied to the “Economic Capital”
required to generate said profits, divided by fully diluted shares
outstanding. “Economic Capital” is defined as net assets plus debt
plus cumulative after tax interest expense at the end of the fiscal year. The
Parent Company Economic Profit Per Share shall exclude any and all compensation
associated with the Employment Agreements dated as of May 1, 2007, between the
Company and its “named executive officers” (as listed in the Parent Company’s
annual definitive proxy statement filed with the Securities and Exchange
Commission).
(v) The
Bonus, if any, shall be paid each fiscal year, within fifteen (15) days
following the Parent Company’s filing of its annual report on Form 10-K for such
fiscal year, based upon the Parent Company’s Economic Profit Per Share or GAAP
Earnings Per Share for that fiscal year. Any Bonus shall be deemed to
be earned by the Associate if the Associate was an employee of the Company as of
the last day of the fiscal year in question.
4. Addition
of Section 4(e). A new Section 4(e) is hereby inserted into
the Employment Agreement after Section 4(d) but before Section 5:
(e) Additional
Equity Awards. On November 27, 2009, the Parent Company will grant to
the Associate the following equity awards: (i) a non-qualified stock option to
purchase 120,000 shares of Parent Company common stock pursuant to the Parent
Company’s 2007 Stock Option Plan, which options shall vest in equal installments
(24,000 options) on each of April 30, 2011, April 30, 2012, April 30, 2013,
April 30, 2014 and April 30, 2015; and (ii) 5,000 shares of restricted stock
pursuant to the Parent Company’s Stock Incentive Plan, which shares of
restricted stock shall vest on April 30, 2015 if the Parent Company attains at
least 70% of its cumulative projected GAAP Earnings Per Share for the period
commencing on May 1, 2010 and ending on April 30, 2015.
5. Addition
of Appendix C. A new Appendix C, as attached to this
Amendment, is hereby appended to the Employment Agreement after Appendix
B.
6. Reaffirmation. Except
to the extent the provisions of the Employment Agreement are specifically
amended, modified or superseded by this Amendment, the Employment Agreement is
in full force and effect and is hereby ratified and confirmed.
7. Amendment. This
Amendment and the Employment Agreement may only be amended by a writing signed
by each party hereto.
8. Counterparts. This
Amendment may be executed in counterpart signature pages, each of which shall
constitute an original but all taken together to constitute one
instrument.
[SIGNATURE PAGE
FOLLOWS.]
*Filed
under application for confidential treatment.
3
IN
WITNESS WHEREOF, the parties have executed this Amendment on and effective as of
the date first written above.
|
COMPANY:
AMERICA’S
CAR-MART, INC.
By:
/s/ Xxxxxxx X.
Xxxxxxxx
Name:
Xxxxxxx X.
Xxxxxxxx
Title:
Vice President Finance, Secretary and Chief Financial Officer
ASSOCIATE:
/s/ Xxxxx X.
Xxxxx
Xxxxx
X. Xxxxx
|
*Filed
under application for confidential treatment.
4
APPENDIX
C
Applicable
to the Bonus pursuant to Section 4(b)(iii)
of
the
Employment
Agreement
Fiscal
2011-2015
|
Fiscal
Year
|
|||||
|
2011
|
2012
|
2013
|
2014
|
2015
|
|
|
Projected
GAAP Earnings Per Share
|
2010
Actual GAAP Earnings Per Share multiplied by
[X.XX]*
|
2011
Projected GAAP Earnings Per Share multiplied by [X.XX]*
|
2012
Projected GAAP Earnings Per Share multiplied by [X.XX]*
|
2013
Projected GAAP Earnings Per Share multiplied by [X.XX]*
|
2014
Projected GAAP Earnings Per Share multiplied by [X.XX]*
|
|
Bonus
Potential:
|
$70,000
|
$77,000
|
$84,700
|
$93,170
|
$102,487
|
If Parent
Company’s actual GAAP Earnings Per Share equals 95-99% of Parent Company’s
projected GAAP Earnings Per Share (rounded to the nearest whole percentage
point), the Bonus for such fiscal year shall be the Bonus Potential for such
fiscal year multiplied by 0.67.
If Parent
Company’s actual GAAP Earnings Per Share equals 100-104% of Parent Company’s
projected GAAP Earnings Per Share (rounded to the nearest whole percentage
point), the Bonus for such fiscal year shall be the Bonus Potential for such
fiscal year multiplied by 1.00.
If Parent
Company’s actual GAAP Earnings Per Share equals 105% or more of Parent Company’s
projected GAAP Earnings Per Share (rounded to the nearest whole percentage
point), the Bonus for such fiscal year shall be the Bonus Potential for such
fiscal year multiplied by 1.33.
*Filed
under application for confidential treatment.
C-1
