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EXHIBIT 10.112
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") by and between MEGO FINANCIAL CORP., a New
York corporation (the "Company"), with its principal office located at 0000
Xxxxxxxx Xxxx, Xxx Xxxxx, XX 00000 and XXXXXX X. XXXXXXXXX (the "Employee")
shall become effective on the Effective Date, as hereinafter defined.
BACKGROUND OF THE AGREEMENT
The Company desires to employ the Employee as an executive officer and
the Employee desires to be employed by the Company under the terms of this
Agreement.
AGREEMENT
The Company and the Employee, in consideration of the promises and the
mutual covenants herein set forth, agree as follows:
1. Term. This Agreement shall commence as of the 1st day of
August, 1996 (the "Effective Date"). The "Primary Period" of this Agreement
shall mean that time period commencing on the Effective Date, and terminating
on December 31, 1997, unless sooner terminated as provided in this Agreement.
The "Second Period" of this Agreement shall mean that time period commencing on
January 1, 1998 (unless the Agreement has been terminated prior to that date,
in which case there will be no Second Period) and terminating on December 31,
2003, unless sooner terminated as provided in this Agreement.
2. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts such employment, to serve as an executive officer of
the Company during the Primary Period, and as an employee of the Company during
the Second Period, on the terms and conditions provided in this Agreement.
3. Duties and Performance. During the Primary Period, the
Employee shall serve as Vice President of the Company and, if requested by the
Company, as an officer of the Company's subsidiaries, and shall perform such
tax, accounting, executive and administrative services as are generally
expected of a Vice President with accounting and tax responsibilities, or as
may be assigned to him from time to time by the Chairman of the Board,
President, or the Chief Financial Officer of the Company, or by the board of
directors of the Company (the "Board"). The Employee agrees to devote his full
time, attention, energy and skill to the Company's business and good will
during the Primary Period. During the Second Period, Employee shall devote
such of his time, attention, energy and skill as shall be required to
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fulfill his reduced duties, set forth on Exhibit A attached hereto and made a
part hereof, or as agreed upon by the parties. During the Second Period,
Employee may accept such other employment as Employee reasonably deems will not
prevent Employee from fulfilling such reduced duties. During the Primary
Period, the Employee shall be headquartered in the offices of the Company in
Las Vegas, but shall be available to travel to other offices of the Corporation
or its subsidiaries, or elsewhere, in the performance of his duties; and during
the Second Period there shall be no restriction on the location where Employee
shall reside or perform his duties.
4. Compensation.
(a) The Company shall pay to the Employee, as
compensation for his services, a salary at the rate of $188,000 per year during
that portion of the Primary Period ending December 31, 1996, and at the rate of
$194,000 per year during the remaining portion of the Primary Period, and a
salary at the rate of $10,000 a year during the Second Period, which amounts
are hereinafter referred to as the "Base Compensation". The Base Compensation
shall be payable in equal installments, the frequency of which shall be
determined by the Company, but in no event less frequently than monthly. The
Company shall withhold and pay over to the appropriate governmental agency all
payroll taxes (including income, social security and unemployment compensation
taxes) required by the federal, state and local governments with jurisdiction
over the Company.
(b) The Base Compensation for the Second Period was
calculated on the assumption that the Employee would provide four hours of
service per month for an aggregate of forty-eight hours per year. Should the
Company fail to utilize Employee's services to that extent, or not at all, or
if Employee has other employment as contemplated in Paragraph 3, above,
Employee shall still be entitled to his Base Compensation and other benefits to
be received by Employee during the Second Period under this Agreement, unless
this Agreement has been terminated by the Company as permitted by Section Five
of this Agreement. Should the Employee perform additional hours of service
beyond four hours per month at the Company's request during the Second Period,
the Employee shall receive additional compensation for such additional hours at
the rate of $200.00 per hour for such additional services performed during
calendar year 1998, $225.00 per hour during calendar 1999, $250.00 per hour
during calendar 2000, $275.00 per hour during calendar 2001, $300.00 per hour
during calendar 2002 and $325.00 per hour during calendar 2003.
(c) The Employee shall be included in the group of
executives considered for an annual bonus under the Company's Executive
Incentive Compensation Plan for fiscal years 1996 and 1997 only.
(d) During the full term of this Agreement (including the
Second Period) the Employee shall be entitled to such health,
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dental, medical (Employee's medical insurance, but not that of his spouse,
shall be at the Company's expense), disability, life and other insurance and
401(k) benefits as are provided to other executives of the Company, provided
that with respect to any new benefits, or any existing benefits which are
modified to require additional or new qualifications from all affected
employees, all qualification requirements have been met. The Company will use
its best efforts to cause Employee to be included in such benefits.
(e) During the Primary Period, so long as the Employee is
performing his duties hereunder, the Employee shall receive a monthly
automobile allowance of $1,000 per month through December 1996, and $500 per
month during the remainder of the Primary Period. The Company shall continue
to pay the Employee's Country Club dues on the current basis, and the Employee
shall be reimbursed for reasonable continuing education costs.
(f) During the Primary Period, so long as the Employee is
performing his duties hereunder, the Employee shall be entitled to the accrual
of paid vacation time at the rate of one week on September 1, 1996, December 1,
1996, March 1, 1997, June 1, 1997, September 1, 1997, and December 1, 1997. It
is agreed that the Employee will not take more than two weeks of vacation
during the remaining portion of calendar 1996 and four weeks in calendar 1997,
notwithstanding any carryover unused and accrued vacation time to which the
Employee is entitled as of the date of this Agreement, for which the Employee
will be compensated in accordance with subparagraph 4(h) below.
(g) In addition to the foregoing, the Company shall
reimburse the Employee for all reasonable business expenses, including cost of
travel, meals and lodging while traveling.
(h) Provided that this Agreement has not been terminated
by the Company for Cause prior to January 1, 1998, on January 10, 1998, the
Company shall pay to the Employee as advance severance pay the sum of $100,000
plus the amount of any remaining unused accrued vacation and sick time due to
the Employee, at the Primary Period Base Salary rate in effect at that date.
Such amounts shall be in full satisfaction of any severance pay or severance
benefits due to the Employee in connection with this Agreement.
5. Termination of Employment
5.1 The Company may immediately terminate the Employee's
employment for (a) Cause (as hereinafter defined), and (b) upon the Employee's
death or total and permanent disability (as set forth below), and for no other
reason, upon giving written notice of such involuntary termination to the
Employee. "Cause" shall mean any one of the following acts of, or omissions by,
or actions of others relating to, the Employee, as set forth below:
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(i) The Employee's conviction of a felony,
whether or not such conviction is appealed.
(ii) Deliberate and premeditated acts by the
Employee which a reasonable person would realize would be against the best
interests of the Company;
(iii) Material breach of the terms of this
Agreement, except that if such breach is capable of being cured, such breach
shall have remained uncured ten days after written notice from the Company to
the Employee;
(iv) With respect to actions of the Employee
during the term of this Agreement, the Employee is found guilty of, or is
enjoined from, violation of any state or federal securities laws, state or
federal laws governing the business of the Company, or rules and regulations of
any state or federal agency regulating any of the business of the Company;
(v) Misappropriation of the Company's funds or
property; or
(vi) Habitual use of alcohol or drugs to a degree
that such use substantially interferes with Employee's performance of his
duties.
5.2 In the event the Employee's employment shall be
terminated for Cause prior to the expiration of the term of this Agreement, the
Employee shall be entitled only to his Base Compensation prorated to the
effective date of such termination.
5.3 This Agreement shall terminate immediately upon the
Employee's death or total and permanent disability. For the purposes of this
Agreement, total and permanent disability shall mean (i) during the Primary
Period, the Employee's inability to adequately perform his duties on behalf of
the Company, at the Company's offices in Las Vegas, Nevada, as reasonably
determined by the Board, for a period of ninety (90) consecutive days due to an
illness or injury, and (ii) during the Second Period, the Employee's inability
(as reasonably determined by the Board) to perform at least four hours of
services, which have been requested by the Company, for each of three
consecutive months. In the event of such termination, the Employee shall be
entitled to his Base Compensation prorated to the end of the month of his death
or the date of the determination of Employee's total and permanent disability
by the Board, together with the amount of any accrued and unpaid vacation and
sick time due the Employee. If this Agreement is terminated due to the
Employee's total and permanent disability, the health, dental and medical
insurance coverage for the Employee specified in Paragraph 4(d) shall continue
to be provided to the Employee until the end of the Second Period, provided
that (i) such coverage is obtainable by the Company under its plans, and (ii)
the cost of such coverage for the Employee does not exceed by more than $10,000
per annum the average cost per other employee for such coverage. The
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portion of any stock option granted by the Company to the Employee which has
vested pursuant to the terms of such option at the time of the termination of
this Agreement due to the Employee's death or total and permanent disability
shall remain exercisable as set forth in such option relating to such a
termination event.
6. Covenant Not to Solicit. The following provisions of
subparagraph 6(a) shall hereinafter be referred to as the "Covenant Not to
Solicit":
(a) The Employee agrees that during the term of this
Agreement, and for a period of one year after the expiration or termination of
this Agreement for Cause or Employee's total and permanent disability, the
Employee will not without authorization from the Company, in any capacity,
directly or indirectly solicit or encourage other employees or officers of the
Company to terminate their employment by the Company for any purpose
whatsoever.
(b) The Employee acknowledges and agrees that:
(i) the foregoing Covenant Not to Solicit is
reasonable for the protection of the goodwill and business of the Company
against irreparable injury.
(ii) the foregoing Covenant Not to Solicit does
not place an undue hardship on the Employee.
(c) The Employee agrees that the Company will be
irreparably damaged by a breach of the Covenant Not to Solicit and that damages
at law will be an insufficient remedy for the Company. The Employee also agrees
that the Company shall be entitled, upon application to a court of competent
jurisdiction, to obtain injunctive relief to enforce the provisions of the
Covenant Not to Solicit, which injunctive relief shall be in addition to any
other rights or remedies available to the Company.
7. Confidentiality. The Employee recognizes and acknowledges
that the services which he will perform for the Company and the knowledge which
he will obtain of the Company's proprietary information such as trade secrets,
processes, business practices, strategic plans and financial data through his
close relationship with the Company, are confidential, proprietary and valuable
in nature. The Employee therefore agrees that, other than in the regular and
proper course of the business of the Company, he will not divulge to others or
use for his own benefit, or the benefit of any person, firm, corporation or
other entity, other than the Company, at any time during or subsequent to this
employment, any information obtained in the course of his employment,
concerning such proprietary information, without first obtaining the Company's
written permission, unless such information has become public knowledge by a
means other than a breach of the provisions of this Agreement.
8. Modification. No change or modification of this Agree-
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ment shall be valid unless made in writing and signed by both of the parties
hereto.
9. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
10. Assignment Prohibited. This Agreement is personal to the
parties hereto and neither party may assign or transfer any rights or
obligations under this Agreement without the written consent of the other party.
11. Corporate Authority to Enter into Agreement. The Company
warrants and represents that all necessary approvals have been obtained to
authorize it to enter into this Agreement, and that this Agreement is valid,
binding and enforceable against the Company in accordance with its terms.
12. Other. The Company and the Employee each agree that such party
will not make oral or written disparaging statements about the other party at
any time during or after the term of this Agreement.
13. Entire Agreement. This Agreement incorporates the entire
agreement between the parties and supersedes all other prior or contemporaneous
agreements, negotiations or discussions between the Employee and the Company.
Notwithstanding the previous sentence, this Agreement does not affect any
indemnification obligation from the Company or its subsidiaries to the Employee
pursuant to their articles of incorporation, bylaws, general corporate policies
or existing written agreements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 1st day of August, 1996.
COMPANY:
MEGO FINANCIAL CORP.
BY: [SIG.]
---------------------------------
TITLE:
EMPLOYEE:
Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
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EXHIBIT A
During the Second Period, the Employee's reduced duties will be to provide tax
consulting, tax planning, financial planning, and historical review services,
as well as such other services as may be agreed upon between the Employee and
the Company.
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