EMPLOYMENT AGREEMENT
EXHIBIT 10.3
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into by and between
Triad Financial Corporation, a California corporation (the “Company”), with offices at 0000
Xxxx Xxxx Xxxxx, Xxxxx Xxxxxxxx Xxxxx, Xxxxx, and Xxxxx X. Xxxxxxxxxxx, (the “Executive”),
0000 Xxxx Xxxx Xxxxx, Xxxxx Xxxxxxxx Xxxxx, Xxxxx, 00000.
RECITALS
| A. | The Executive currently serves as a Senior Vice President of the Company. | |
| B. | The Executive and the Company have determined that it is in their mutual interests to set forth certain terms relating to the Executive’s employment by the Company. | |
| C. | The Executive and the Company intend for this Agreement to supersede and replace any and all prior employment agreements the Executive may at any time have had with the Company or any predecessor of the Company. |
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:
1. Employment.
(a) Service to the Company. Executive shall devote all of his professional time,
energy, skill and efforts to the performance of his duties hereunder and to the business of the
Company, and shall perform his duties in a diligent, trustworthy, and business-like manner, all for
the purpose of advancing the business of the Company. Executive shall be primarily responsible for
the operation of the Indirect Lending Program offered by the Company, in addition to such other
duties as may be delegated to him from time to time. Executive shall report directly to the
President and Chief Executive Officer of the Company, and shall be subject to the policies and
procedures adopted by the Company from time to time.
(b) Other Commitments. Notwithstanding the commitment of the Executive’s professional
time, energy, skill and efforts to the Company as set forth in this Section 1(a) above,
Executive may serve on corporate, civic, or charitable boards or committees, provided that such
service does not interfere with the performance of the Executive’s duties under this Agreement, and
provided the Executive keeps the Company reasonably informed of such commitments. If the Company
determines that any such commitments conflict with or interfere with the performance of the
Executive’s duties to the Company, the Company shall give written notice of such conflict or
interference to the Executive, who then shall be given thirty days in which to remedy the conflict.
2. Employment Term.
(a) Initial Term. Subject to the terms and conditions hereof, the Executive’s term of
employment under this Agreement (the “Employment Term”) shall commence effective as of
February 15, 2007 (the “Effective Date”), and continue through February 14, 2010 (the
“Initial Term”), subject to the renewal provisions of Section 2(b), unless
terminated earlier in accordance with the provisions contained herein.
(b) Renewal. Provided the Executive remains in the employ of the Company, and subject
to Section (c) below, this Agreement will be automatically renewed and extended on an annual basis
for an additional term of one year effective on the Anniversary Date.
(c) Notice of Non-Renewal. Notwithstanding the renewal provision set forth above,
Either party may choose not to renew the Agreement utilizing the process set forth below:
(i) If the Company does not wish to extend the Agreement, they must provide the
Executive with Notice of Non-Renewal of the Agreement on or before the January
1st immediately preceding the Anniversary Date.
(ii) Provided the Executive has Good Reason (as that term is defined in Section
6(a) herein), he may exercise his right not to renew the Agreement by providing the
Company with a Notice of Non-Renewal on or before the January 1st
immediately preceding the Anniversary Date.
If the Agreement is not renewed, then the contractual obligations of the parties will survive
the Agreement, and the parties will be obligated to adhere to all performance and payment
obligations contained herein. A Notice of Non-Renewal shall not be deemed to be a termination of
the Executive’s employment, but either party may terminate the employment relationship at any time
after the receipt of such notice. In such event, the Executive shall be treated as having remained
employed through the end of the Agreement (as extended, if at all), except with respect to any
benefit, benefit plan, bonus or incentive plan that requires active employment as a condition
precedent for participation in such plan.
3. Salary and Benefits.
(a) Salary. During his employment pursuant to this Agreement, the Executive shall
receive a total annual salary of Two Hundred Seventy Thousand U.S. Dollars (U.S. $270,000) as
compensation for his services to the Company (the “Base Salary”), such compensation to be
payable in regular installments in accordance with the Company’s policy for salaried employees.
(b) Target Bonus. For each fiscal year of the Company ending during the term of this
Agreement, the Executive shall be eligible to receive an annual incentive bonus with a target
payout based on the Company’s performance for such fiscal year (the “Annual Bonus”),
provided that the performance objectives established by the Board of Directors of the Company (the
“Board”) for both the Company and the Executive for such fiscal year are attained and provided the
Executive is serving as an employee of the Company as of the end of such fiscal year. Any Annual
Bonus that is payable hereunder will be paid after the completion of the annual audit of the
Company with respect to such fiscal year. If the Executive is employed by the Company on December
31, 2007, and if the applicable performance objectives for fiscal year 2007 are accomplished, the
Company will pay the Executive an Annual Bonus based on the Company’s full 2007 fiscal year,
notwithstanding that the Executive’s employment under this Agreement did not commence until
February 15, 2007.
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(c) Benefit Plans. During his employment pursuant to this Agreement, subject to
eligibility requirements, applicable employee contributions and the terms and conditions of the
applicable plans, and except as otherwise expressly provided in this Agreement, the Executive shall
be entitled to participate in the Company-sponsored employee benefit plans, medical benefit plans,
group life insurance plans or other employee welfare plans that the Company may adopt for employees
generally from time to time during the Executive’s employment pursuant to this Agreement, and as
such plans may be modified, amended, terminated, or replaced from time to time. This Agreement
shall supercede any severance plan currently used by, or subsequently adopted by, the Company with
respect to the Executive.
(d) Vacation. The Executive shall be entitled to four weeks of paid vacation each
fiscal year of this Agreement, to be taken in accordance with the Company’s policy then in effect,
and to the same paid Holidays provided to the other employees of the Company. The Executive’s
vacation days will be pro-rated based on the number of full months, if less than twelve, that the
Executive is employed hereunder in the applicable fiscal year.
(e) Reimbursement of Expenses. The Company shall reimburse the Executive for all
reasonable out-of-pocket expenses incurred by the Executive on behalf of the Company in the course
of his duties, upon presentation of appropriate documentation of such costs as and when required by
and to the satisfaction of the Company, on a basis that is consistent with the Company’s past
practices. The Executive shall be entitled to fly Business Class on flights that have a scheduled
flight time of two hours or more, to the extent a Business Class seat is available. All other
flights shall be Economy Class or its equivalent.
(f) Car Allowance. During his employment pursuant to this Agreement, the Executive
shall be entitled to a vehicle allowance of One Thousand Two Hundred Fifty Dollars ($1,250) per
month in addition to his salary and other benefits.
4. Non-solicitation/Covenant Not to Compete.
The Executive acknowledges that he is considered a key employee of the Company and agrees that
he will work on a full-time basis to accomplish the Company’s business plan, and that he is being
entrusted with certain Confidential Information (defined herein) in order to perform the tasks
required of him. In consideration of the Company providing Executive access to new confidential
and proprietary information and materials belonging to the Company to assist Executive in the
performance of Executive’s duties and Executive agreeing to keep all such information strictly
confidential, and as a means to aid in the performance and enforcement of the terms of the
Confidential Information provisions in Section 5 herein, the Executive agrees that from the
Effective Date and until the two-year anniversary of the termination of the Executive’s employment
under this Agreement for any reason:
| (a) | The Executive shall not, directly or indirectly, own, manage, operate, control, or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, agent, representative of, or have any financial interest in, or aid or assist anyone else in the conduct of any business that involves the indirect financing of motor vehicle purchases by consumers, or the lending of money directly to consumers for the purpose of purchasing, financing or refinancing a motor vehicle (a “Competitive Operation”) which competes with any business conducted by the Company or by any group, division or subsidiary of the Company (a “Company Operation”) in any area where such Company Operation is being conducted at the time of the Executive’s termination. | ||
| (b) | The Executive shall not, directly or indirectly, use Confidential Information (defined below) that constitutes a protectable trade secret to solicit business from, attempt to do |
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| business with, or do business with any customers, lenders, suppliers, joint venturers or business referral sources, in each case which either: (1) the Executive contacted, called on, serviced, transacted business with or had significant contact with during the Executive’s employment with the Company or that the Executive attempted to contact, call on, service, or do business with during the Executive’s employment with the Company; or (2) the Executive became acquainted with as a result of the Executive’s employment with the Company. The restriction set forth in this Section 4 applies only to business that is in the scope of services or products provided by the Company during the term of the Executive’s employment hereunder. | |||
| (c) | The Executive shall not, directly or indirectly, on behalf of the Executive or any other person or entity, solicit, induce, encourage, attempt to solicit or induce, or assist another to induce or attempt to induce, any employee or independent contractor of the Company to terminate his or her employment or relationship with the Company. |
The Executive agrees that if a court of competent jurisdiction determines that the length of
time or any other restriction, or portion thereof, set forth in this Section 4 is overly
restrictive and unenforceable, the court may reduce or modify such restrictions to those which it
deems reasonable and enforceable under the circumstances, and as so reduced or modified, the
parties hereto agree that the restrictions of this Section 4 shall remain in full force and
effect. The Executive further agrees that if a court of competent jurisdiction determines that any
provision of this Section 4 is invalid or against public policy, the remaining provisions
of this Section 4 and the remainder of this Agreement shall not be affected thereby, and
shall remain in full force and effect.
The Executive acknowledges that the scope and duration of the restrictions contained herein
are reasonable in light of the business plan for the Company, the time that the Executive has been
engaged in (and is expected to be engaged in) the business of the Company, the Executive’s
reputation in the markets for the Company’s businesses and the Executive’s relationship with the
Company’s actual and prospective lenders, clients, employees and management team.
If the Executive violates any of the restrictions contained in Section 4 of this
Agreement, the restrictive period will be suspended and will not begin to run again in favor of the
Executive from the time of the commencement of any violation until the time when the Executive
cures the violation to the Company’s satisfaction.
5. Confidential Information.
(a) Confidential Information. For purposes of this Agreement, the term
“Confidential Information” means any trade secrets or confidential or proprietary
information of the Company, including without limitation the following:
(i) Information concerning the Company’s investor or prospective investor lists, lenders,
customers, clients, marketing, business and operational methods of the Company and their customers
or clients, contracts, financial or other data, technical data, e-mail and other correspondence or
any other confidential or proprietary information possessed, owned or used by any of the Company;
(ii) Business records, financial information, pricing, business strategies, marketing and
promotional practices (including internet-related marketing) and management methods and
information;
(iii) Finances, strategies, systems, research, plans, reports, recommendations
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and conclusions;
(iv) Names, arrangements with, or other information relating to, any of the Company’s
investors, customers, clients, suppliers, financiers, owners, representatives and other persons who
have business relationships with the Company or who are prospects for business relationships with
the Company; and
(v) Any matter or thing obtained or ascertained by Executive through Executive’s association
with the Company, the use or disclosure of which might reasonably be construed to be contrary to
the best interests of any the Company, its owners or employees.
Upon termination of the Executive’s employment under any circumstances, the Executive or his
representatives, shall promptly return to the Company all property of the Company, including any
and all Confidential Information, computers, hard-drives, papers, books, records, documents,
memoranda, manuals, e-mail, electronic or magnetic recordings or data, electronic devices and
related data storage devices, including all copies thereof, which belong to the Company or relate
to the Company’s business and which are in Executive’s possession, custody or control, whether
prepared by Executive or others, and shall destroy or erase any data that cannot be returned (with
it being understood and agreed that subject to Section 5 hereof, the Executive shall be
permitted to retain his own rolodex, calendars, appointment lists and other personal lists
maintained during the course of his employment hereunder).
If the Executive is subpoenaed, served with any legal process or notice or otherwise requested
to produce or divulge, directly or indirectly, any Confidential Information by any entity, agency
or person in any formal or informal proceeding, including without limitation any interview,
deposition, administrative or judicial hearing and/or trial, then promptly after the Executive’s
receipt of such subpoena, process, notice or request, the Executive shall notify the Company and
shall reasonably cooperate with the Company’s efforts to obtain a protective order or other relief
to protect the Company’s Confidential Information or to limit the scope of disclosure of such
information in such interview, deposition, administrative or judicial hearing and/or trial.
(b) Non-disparagement. During the term of this Agreement and continuing after
termination of the Executive’s employment hereunder, the Executive shall not communicate or
publish, directly or indirectly, any confidential, personal or disparaging information concerning
any member of the Company, any director, officer or employee of any entity in the Company or any
entity or individual who controls, directly or indirectly, any entity in the Company.
(c) Works. Any works created during the term of this Agreement by the Executive shall
be deemed work for hire to the extent permitted by law, and the Company shall have the sole right
to any such works. In addition, the Executive hereby grants and shall grant to Company all his
rights, title and interest including, without limitation, all intellectual property and proprietary
rights, in all works developed or created by the Executive during the term of this Agreement. The
Executive hereby waives for the benefit of the Company and its successors, assigns and licensees
all moral rights that the Executive may have in such works. For greater clarity, the parties
acknowledge and agree that such works include without limitation the Developments defined in
Section 5(d) below.
(d) Other Provisions/Exclusions. The Executive understands, acknowledges and agrees
that all Developments (as hereinafter defined) shall be made for hire by the Executive for the
Company. “Developments” means any idea, discovery, invention, design, method, technique,
improvement, enhancement, development, computer program, machine, algorithm or other work or
authorship that (i) relates to the business or operations of the Company, or (ii) results from or
is suggested by any undertaking assigned to the Executive or work performed by the Executive for or
on behalf of the
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Company, whether created alone or with others, during or after working hours. All
confidential or proprietary information described in Section 5(a) above and all
Developments shall remain the sole property of the Company. The Executive shall acquire no
proprietary interest in any confidential or proprietary information described in Section
5(a) above or Developments developed or acquired while the Executive is required to provide
services to the Company hereunder. To the extent the Executive may, by operation of law or
otherwise, acquire any right, title or interest in or to any confidential or proprietary
information described in Section 5(a) above or Development, the Executive hereby assigns to
the Company all such intellectual property or proprietary rights. The Executive shall, both during
the term of this Agreement and for two years thereafter, upon the Company’s request, promptly
execute and deliver to the Company all such assignments, certificates and instruments, and shall
promptly perform such other acts as the Company may from time to time in its reasonable discretion
deem necessary or desirable to evidence, establish, maintain, perfect, enforce or defend the
Company’s rights in Developments and in the proprietary information, inventions, copyrights, and
trademarks otherwise described in this Section 5.
6. Termination.
(a) By the Executive. The Executive may resign his employment at any time, for Good
Reason (defined below) or without Good Reason, upon thirty days written notice to the Company.
Upon receipt of written notice from the Executive of his voluntary resignation of employment, the
Company may immediately terminate the Executive’s employment with the Company (which shall be
deemed for all purposes an immediate voluntary resignation by the Executive, and not a termination
by the Company) and require no further services from the Executive. The term “Good Reason”
means (i) any material breach by the Company of any provision of this Agreement, after the
Executive has given the Company thirty days written notice of such breach and the Company has not
during such period cured the alleged breach, (ii) a reduction in the Executive’s Base Salary
without the Executive’s consent, (iii) the Company’s failure to continue any benefit or
compensation plan in which the Executive is participating (other than an equal reduction in such
benefits for all similarly-situated executives of the Company), or (iv) the occurrence of a Change
in Control, as that term is defined in the Triad Holdings, Inc., 2005 Long Term Incentive Plan.
(b) By the Company. The Company may terminate the Executive’s employment for any
reason, at any time, upon written notice to the Executive, provided that the Company shall pay the
Executive the amounts and benefits as set forth in Section 6(d) or Section 6(e)
below, as applicable. The Company shall have the right to terminate the Executive’s employment
with the Company under this Agreement with or without Cause. As used in this Agreement, the term
“Cause” shall mean the Executive’s:
(i) material fraud, embezzlement, theft or other act or omission involving material
dishonesty, or a crime of moral turpitude, in each case relating to the Company’s business, or
constituting information known within the Company’s industry or among the Company’s employees;
(ii) intentional or reckless failure to abide in any material respect with reasonable rules
and regulations governing the transaction of business of the Company as the Company may from time
to time adopt or approve;
(iii) failure to perform material duties or to follow material directions of the Board;
(iv) intentional misappropriation of any corporate opportunity, or otherwise intentionally
obtaining personal profit from any material transaction that is adverse to the interests of the
Company or to the benefits to which the Company is entitled;
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(v) indictment for a felony (provided, however, that indictment for a felony
involving only the use of a motor vehicle that does not cause material personal injury to any
person shall not constitute Cause under this item (v)); or
(vi) intentional or reckless conduct by the Executive that subjects the Company or any direct
or indirect subsidiary, parent or other affiliated entity, to loss of any required license, permit
or similar governmental authorization that is material to the Company’s or such entity’s business.
(c) By Death or Disability. The Executive’s employment shall be terminated under this
Agreement in the event of the Executive’s death or Disability. For purposes of this Agreement,
“Disability” means that for a period of at least 120 days during any twelve consecutive
month period on account of a mental or physical condition, the Executive is unable to perform the
essential functions of his job for the Company, with or without reasonable accommodation, as
determined in good faith by the Company, based upon medical reports or other evidence satisfactory
to the Company.
(d) Obligations Where no Severance is Required. In the event that the Company
terminates the Executive’s employment under this Agreement for Cause, the Executive’s employment
terminates due to his death or Disability, or the Executive terminates his employment hereunder
(other than for Good Reason), then in each such case the Company shall have no further obligation
to the Executive under this Agreement except to pay his Base Salary earned through the date of
termination of employment with the Company and a lump sum payment for any accrued and earned, but
unused, vacation shall be paid to Executive on or before the next regularly scheduled pay day after
the effective date of the termination; provided, however, that if the Executive’s
date of termination occurs after the end of the Company’s fiscal year, but before payment of any
applicable Annual Bonus actually earned by the Executive for such completed fiscal year, then the
Company also shall pay such earned Annual Bonus in accordance with Section 6(e)(iii).
(e) Severance Obligations. In the event the Company terminates the Executive’s
employment without Cause, or Executive resigns for Good Reason, the Company’s obligations to the
Executive shall be limited to the following:
(i) Earned Salary. The Company shall pay Executive any Base Salary earned through the
date of termination of employment with the Company and a lump sum payment for any accrued and
earned, but unused, vacation; provided, however, that if the Executive’s date of
termination occurs after the end of the Company’s fiscal year, but before payment of any applicable
Annual Bonus actually earned by the Executive for such completed fiscal year, then the Company also
shall pay such earned Annual Bonus in accordance with Section 6(e)(iii).
(ii) Severance.
(A) Payment Terms. Subject to the last sentence of Section 6(f) below, if the
Company terminates Executive’s employment without Cause or the Executive resigns for Good Reason,
the Company shall pay Executive severance payments (“Severance”) in an amount equal to the
total amount remaining to be paid under the terms of this Agreement, after taking into
consideration the amount of salary and benefits previously paid to the Executive as of the date of
termination of employment, reduced by any required payroll and tax withholdings. The Severance
shall be payable in twelve equal installments on the first pay day of each month, beginning on the
first pay day of the month following the month in which Executive’s Employment is terminated,
provided that Executive has not revoked the Separation Agreement and Release.
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(B) Forfeiture Upon Breach. If the Executive is eligible to receive severance
payments under this Section 6(e)(ii), then in the event the Executive violates any of the
provisions of Section 4 or Section 5 above, all remaining payments shall be
forfeited and the Company shall be entitled to reimbursement from the Executive for any and all
severance payments previously made to Executive during the period of such violation. If Executive
or anyone acting on his behalf brings a claim against the Company seeking to declare any term of
this Agreement void or unenforceable, including Section 4 and Section 5 of this
Agreement, and if one or more material terms of this Agreement are ruled by a court or arbitrator
to be void or unenforceable or subject to reduction or modification, then the Company shall be
entitled to (i) refuse to make any severance payments, or any additional severance payments,
described in Section 6(e) of this Agreement; (ii) recover from Executive all Severance
payments, as described in Section 6(e), already paid to Executive; and (iii) recover its
attorneys’ fees incurred in defending such action and seeking recovery of such amounts.
(C) Acknowledgement. The Executive acknowledges and agrees that the severance
compensation provided for in this Section 6(e)(ii) is fair and reasonable and is the result
of negotiation between the parties.
(iii) Completed Fiscal Year Earned Annual Bonus. If the Executive’s employment
terminates after the end of a full fiscal year but prior to the payment of any Annual Bonus
actually earned for such full fiscal year, the Company will pay such earned Annual Bonus as
promptly as reasonably practicable after the completion of the audit for such fiscal year, and in
any event not later than the payment of annual bonuses (if any) payable to other senior executive
officers of the Company pursuant to the same or any substantially similar bonus program.
(f) Sole Remedy; Release. The applicable payments provided in this Section 6
shall be the sole remedy for any claim the Executive may have arising out of termination of the
Executive’s employment by the Company or the termination of this Agreement. Notwithstanding any
provision of this Agreement to the contrary, the Company shall not be obligated to make any payment
under Section 6(e)(ii) unless the Executive timely executes and delivers to the Company The
Separation Agreement and Release, a copy of which is attached hereto, marked as Exhibit “A”, and
incorporated herein by reference for all purposes.
7. Breaches And Remedies. In the event of a breach or a threatened breach by the
Executive of this Agreement, the Company shall be entitled to a temporary restraining order and
injunctive relief restraining the Executive from the commission of any breach, and (if the Company
obtains such relief) to recover the Company’s attorneys’ fees, costs and expenses related to the
breach. Nothing contained in this Agreement shall be construed as prohibiting the Company from
pursuing any other remedies available to it for any breach or threatened breach, including, without
limitation, the recovery of money damages, attorneys’ fees, and costs. The Executive and the
Company shall construe each of the restrictions in this Agreement as independent of any other
provisions in this Agreement, and the existence of any claim or cause of action, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the enforcement of this
Agreement. The Executive acknowledges and agrees that in the event that the Executive violates
Section 4 or Section 5 hereof, in addition to any other rights or remedies to which
it may be entitled under law or this Agreement, the Company shall, except as prohibited by
applicable law, cease making any severance or other payments hereunder, shall be entitled to
reimbursement from the Executive for any and all severance payments previously made to the
Executive under this Agreement during the period of such violation and shall be entitled to enforce
the provisions of Section 4 or Section 5 by injunction or other equitable relief,
without having to prove irreparable harm or inadequacy of money damages.
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8. Dispute Resolution. Any dispute, controversy or claim arising out of or in
relation to or in connection with this Agreement, including without limitation any dispute as to
the construction, validity, interpretation, enforceability or breach of this Agreement, shall be
exclusively and finally settled by arbitration, and any party may submit such dispute, controversy
or claim, including a claim for indemnification under this Section 8, to arbitration.
Notwithstanding the provisions of this Section 8 to the contrary, the Company shall be
entitled to seek injunctive or other emergency relief in a court of law to enforce the provisions
of Section 4 or Section 5.
(a) Arbitrator. The arbitration shall be heard and determined by one arbitrator, who
shall be impartial and who shall be selected by mutual agreement of the parties. If the parties
cannot agree upon an arbitrator, then they shall submit the dispute to the American Arbitration
Association, which shall appoint an impartial arbitrator to preside over the arbitration.
(b) Proceedings. Unless otherwise expressly agreed in writing by the parties to the
arbitration proceedings:
(i) The arbitration proceedings shall be held in Dallas County, Texas, at a site chosen by
mutual agreement of the parties, or if the parties cannot reach agreement on a location within
thirty (30) days of the appointment of the arbitrator, then at a site chosen by the arbitrator;
(ii) The arbitrator shall be and remain at all times wholly independent and impartial;
(iii) The arbitration proceedings shall be conducted in accordance with the Employment Dispute
Rules of the American Arbitration Association, as amended from time to time;
(iv) Any procedural issues not determined under the arbitral rules selected pursuant to item
(iii) above shall be determined by the laws of the state of Texas, unless such laws would refer the
matter to another jurisdiction;
(v) The costs of the arbitration proceedings (including attorneys’ fees and costs) shall be
borne in the manner determined by the arbitrator;
(vi) The decision of the arbitrator shall be: reduced to writing; final and binding without
the right of appeal; the sole and exclusive remedy regarding any claims, counterclaims, issues or
accounting presented to the arbitrator; made and promptly paid in United States dollars free of any
deduction or offset; and any costs or fees incident to enforcing the award shall, to the maximum
extent permitted by law, be charged against the party resisting such enforcement;
(vii) The award shall include interest from the date of any breach or violation of this
Agreement, as determined by the arbitral award, and from the date of the award until paid in full,
at 6% per annum; and
(viii) Judgment upon the award may be entered in any court having jurisdiction over the person
or the assets of the party owing the judgment or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may be.
(c) Acknowledgment of Parties. Each party acknowledges that such party has
voluntarily and knowingly entered into an agreement to arbitrate under this Section 8 by
executing this Agreement.
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9. Miscellaneous Provisions.
(a) Successors of the Company. The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which executes and delivers the Agreement
provided for in this Section 9 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) No Assignment or Delegation by the Executive. The Executive may not assign his
rights or delegate his duties or obligations hereunder.
(c) Notice. For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
hand delivered or mailed by registered or certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth on the first page of this Agreement, or to
such other in writing in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
(d) Amendment; Waiver. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing signed by the
Executive and such individual as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth expressly in this
Agreement.
(e) Invalid Provisions. Should any portion of this Agreement be adjudged or held to
be invalid, unenforceable or void, such holding shall not have the effect of invalidating or
voiding the remainder of this Agreement and the parties hereby agree that the portion so held
invalid, unenforceable or void shall, if possible, be deemed amended or reduced in scope, or
otherwise be stricken from this Agreement to the extent required for the purposes of validity and
enforcement thereof.
(f) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.
(g) Governing Law. This Agreement shall be governed by and construed under the laws
of the State of Texas.
(h) Headings. The headings contained in this Agreement are for reference only and
shall not affect the meaning or interpretation of any provision of this Agreement.
(i) Prior Agreements. This Agreement supersedes in all respects all prior employment
agreements between the parties, whether written or oral.
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(j) Captions and Gender; Mutual Drafting. The use of captions and Section headings
herein is for purposes of convenience only and shall not affect the interpretation or substance of
any provisions contained herein. Similarly, the use of the masculine gender with respect to
pronouns in this Agreement is for purposes of convenience and includes either sex who may be a
signatory. Each party has substantially participated in the preparation and drafting of this
Agreement and there shall be no presumption against any party by virtue of any party’s preparation
of any provision of this Agreement.
(k) Survival. The covenants and provisions set forth in Sections 4, 5, 6, 7, 8 and 9
of this Agreement shall survive the termination of the Executive’s employment, and/or termination
of this Agreement, in accordance with their respective terms.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement effective as of the
15th day of February, 2007.
| TRIAD FINANCIAL CORPORATION, a California corporation |
||||
| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | President, Chief Executive Officer | |||
| /s/ Xxxxx X. Xxxxxxxxxxx | ||||
| Xxxxx X. Xxxxxxxxxxx | ||||
11
EXHIBIT A
FORM OF SEPARATION AGREEMENT AND RELEASE
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SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (“Agreement”) is entered into by Triad Financial
Corporation (“Triad”) and Xxxxx X. Xxxxxxxxxxx, (the “Executive”). Triad and
Executive are referred to as the “Parties.” Because the Parties desire to enter into an
agreement that amicably resolves the employment relationship between them and any disputes that now
or may exist between them concerning Executive’s hiring, employment and termination from Triad
including disputes regarding Executive’s compensation or benefits, the Parties are entering into
this Agreement. Defined terms in this Agreement have the same meaning as defined in the Employment
Agreement between Triad and Executive, dated as of February 15, 2007 (“Employment
Agreement”).
1. End of Executive’s Employment. Executive’s last day of employment with Triad will be
(which is designated the “Separation Date”). All benefits and severance to be
paid to Executive are set forth in Section 6(d) and (e) of the Employment
Agreement. Except as stated in this Agreement and the Employment Agreement, or as required by law,
all other benefits and pay which relate to Executive’s employment with Triad shall cease as of the
Separation Date.
2. Executive’s Participation in Company Benefit Plans. Following his termination of
employment, Executive shall not be entitled to any additional payments or future grants under any
benefit plan or bonus or incentive program established by Triad or any of its affiliates. Any
vested interest held by Executive in Triad’s 401(k) and any other plans in which Executive
participates shall be distributed in accordance with the terms of the plan and applicable law.
Executive’s right to exercise vested options or grants after his termination of employment will be
determined according to the provisions of his Employment Agreement and the applicable equity
incentive plans and agreements governing the options or grants for stock in Triad, Triad Holdings,
Inc. or their affiliates (the “Option Documents”). Executive agrees that the release in
Paragraph 4 below, except as provided therein, covers any claims he might have regarding his
bonuses, stock options or grants and any other benefits he may or may not have received during his
employment with Triad. In addition, after the Separation Date, Executive and his dependents shall
have the right to choose extension of applicable medical insurance coverage pursuant to COBRA.
Triad shall provide Executive under separate cover at his home address, information necessary and
as required by law to facilitate the transfer or rollover of his 401(k) account and information
regarding COBRA election.
3. Return of Triad Property. Executive shall promptly return all equipment and property in
his possession which belongs to Triad, including all computer software, computer access codes,
company laptops, personal data assistants, company credit cards, keys, access cards, and all
original and copies of notes, documents, files or programs stored electronically or otherwise, that
relate or refer to Triad, its customers, its financial statements, its business contacts, and
sales. By signing this Agreement, Executive warrants that he has not retained and has returned all
such equipment or property and that should he later discover additional Company equipment or
property, he will promptly notify the Company and return it to the Company.
4. Executive’s Release. In consideration of the benefits and severance pay described in
Section 6(e) of the Employment Agreement, and the promises, covenants and other valuable
consideration provided by Triad in this Agreement, and subject thereto, Executive releases Triad
and any of its direct or indirect parents, predecessors, successors, subsidiaries, affiliates or
related companies, and their respective officers, directors, shareholders, executives, attorneys,
agents successors and assigns, (collectively referred to as “Releasees,”) from any and all
claims, causes of action, losses, obligations, liabilities, damages, judgments, costs, expenses
(including attorney’s fees) of any kind whatsoever, including, but not limited to, disputes or
claims arising out of Executive’s hiring, employment or termination of such employment with Triad,
or arising out of any act committed or omitted during or after
the existence of such employment relationship, including any disputes regarding compensation.
This release includes, but is not limited to, all claims, whether arising in contract or
allegations of tort, common law or assertion of federal or state statutory rights, including, but
not limited to, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Executive Retirement Income Security Act,
claims for wrongful discharge, breach of express or implied contract or implied covenant of good
faith and fair dealing, as well as any expenses, costs or attorney’s fees. Furthermore, Executive
agrees and hereby relinquishes any right to re-employment with Triad. However, Executive does not
release his right to enforce the terms of this Agreement, or the obligations to him under the
Employment Agreement and Option Documents that by the terms thereof expressly continue after his
employment ends (the “Continuing Obligations”).
Executive hereby expressly agrees that this Agreement shall extend and apply to all
unknown, unsuspected and unanticipated injuries and damages as well as those that are now
disclosed.
In exchange for the Severance benefits described in Section 6(e) of the Employment
Agreement, Executive further agrees never to file a lawsuit asserting any claims that are released
in this Agreement and further agrees not to accept any recoveries or benefits which may be obtained
on his behalf by any other person or agency or in any class action; provided that nothing in this
Agreement shall be construed to prohibit Executive from challenging the validity of this Agreement,
enforcing the Continuing Obligations, filing a charge with the Equal Employment Opportunity
Commission, or participating in any investigation or proceeding conducted by the Equal Employment
Opportunity Commission.
5. Non-Solicitation Agreement. Executive reaffirms his non-solicitation obligations set forth
in Section 4 of his Employment Agreement; and agrees that nothing in this Agreement shall
cause such obligations to cease.
6. Not An Admission of Wrongdoing. This Agreement shall not in any way be construed as an
admission by either Party of any acts of wrongdoing, violation of any statute, law or legal or
contractual right.
7. Voluntary Execution of the Agreement. Executive and Triad represent and agree that they
have had an opportunity to review all aspects of this Agreement, and that they fully understand all
the provisions of the Agreement and are voluntarily entering into this Separation Agreement and the
General Release. Executive further represents that he has not transferred or assigned to any
person or entity any claim involving Triad or any portion thereof or interest therein. To the
extent that Executive has any remaining claims against Triad, such claims are hereby assigned to
Triad.
8. Binding Effect. This Agreement shall be binding upon Triad and upon Executive and his
heirs, administrators, representatives, executors, successors and assigns.
9. Enforceability. Should any provision of this Agreement be declared or determined to be
illegal or invalid by any government agency or court of competent jurisdiction, the validity of the
remaining parts, terms or provisions of this Agreement shall not be affected and such provisions
shall remain in full force and effect.
10. Entire Agreement. This Agreement and the Employment Agreement between Triad and Executive
set forth the entire agreement between the parties, and fully supersedes any and all prior
agreements (except the Employment Agreement and the Option Documents), understandings, or
representations between the parties pertaining to Executive’s employment with Triad, the subject
matter of this Agreement or any other term or condition of the relationship between Triad and
Executive.
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Executive represents and acknowledges that in executing this Agreement, he does not rely, and
has not relied, upon any representation(s) by Triad or its agents except as expressly contained in
this Agreement.
11. Time to Consider. Triad and Executive agree that Executive received this Agreement on
and has been told that he has twenty-one (21) days to consider this Agreement prior to
signing. Executive is not required, however, to wait 21 days to execute this Agreement and may
execute this Agreement at any time. Executive agrees that he has been given a sufficient period of
time to review and consider this Agreement before signing it and is encouraged to consult with an
attorney of his choosing before signing this Agreement. Executive understands that the decision to
consult with an attorney is in his sole discretion. Executive understands and agrees that if he
refuses to sign this Agreement, his employment will be immediately terminated and he will not be
entitled to receive any payment pursuant to this Agreement or the Employment Agreement.
12. Executive’s Right to Revoke the Agreement. Triad and Executive agree that Executive may
revoke this Agreement at any time up to seven (7) days after signing.
13. Governing Law. This Agreement shall be governed by the laws of the State of Texas without
reference to its choice of law rules.
14. Counterparts. This Agreement may be executed in counterparts, each of which when executed
and delivered (which deliveries may be by facsimile) shall be deemed an original and all of which
together shall constitute one and the same instrument.
* * * * *
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I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, THAT I UNDERSTAND ALL OF ITS
TERMS, AND THAT I AM ENTERING INTO IT VOLUNTARILY.
AGREED TO BY:
STATE OF TEXAS
COUNTY OF
Before me, a Notary Public, on this day personally appeared ,
known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledges
to me that he has executed this Agreement on behalf of himself and his heirs, for the purposes and
consideration therein expressed.
Given under my hand and seal of office this day of , .
(PERSONALIZED SEAL)
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TRIAD FINANCIAL CORPORATION
BY:
|
DATE: | |||||||||||
| TITLE: | ||||||||||||
STATE OF
COUNTY OF
Before me, a Notary Public, on this day personally appeared , known to me to be the person and officer whose name is subscribed to
the foregoing instrument and acknowledged to me that the same was the act of , and that he has executed the same on behalf of said corporation for
the purposes and consideration therein expressed, and in the capacity therein stated.
Given under my hand and seal of office this day of ,
the State of |
(PERSONALIZED SEAL)
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