EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT
(the
"Agreement")
is
made and entered into as of this December 29, 2006,
(the
"Effective
Date")
by and
between Manchester
Indiana Operations, Inc.
(the
"Corporation")
and
Xxxx X. Xxxxxxx (the "Employee").
Preliminary
Statement
Pursuant
to the terms of a Stock Purchase Agreement ("Stock
Purchase Agreement")
dated
December 2, 2006, as amended December 29, 2006, by and among Manchester
AcquisitionCo, Inc., a Delaware Corporation ("Purchaser"),
all
of the shareholders of the Corporation and all of the shareholders of GNAC,
Inc., (collectively, the "Sellers"),
Purchaser shall purchase from Sellers, and Sellers shall sell to Purchaser,
all
of the issued and outstanding capital stock of the Sellers upon and subject
to
the terms and conditions set forth in the Stock Purchase Agreement. The Employee
recognizes and agrees that the enforceability of this Agreement is essential
to
the transactions contemplated by the Stock Purchase Agreement. Capitalized
terms
used but not otherwise defined herein shall have the meanings ascribed to them
in the Stock Purchase Agreement.
The
Board
of the Corporation (the "Board")
has
determined that it is in the best interests of the Corporation to retain the
benefit of the Employee's services and experience, and the Employee desires
to
provide his services and experience to the Corporation upon the terms and
conditions set forth in this Agreement.
Terms
and Conditions
In
consideration of the mutual promises and covenants contained in this Agreement,
and intending to be legally bound, the parties agree as follows:
Section
1. Employment
and Duties.
(a) General.
The
Employee shall, upon the Closing of the Stock Purchase Agreement, serve as
an
employee and as Chief Executive Officer of the Corporation. The Employee agrees
to perform all duties for the Corporation as may be reasonably requested by
the
Board. The Employee's duties shall include those duties consistent with his
position with the Corporation as Chief Executive Officer as well as those
assigned to him from time to time, in good faith, by the Board.
The
Employee shall not be elected as an officer or director of Manchester
AcquisitionCo, Inc. or any of its affiliates.
(b) Employment
Duties.
Throughout the Term, the Employee shall: (i) devote his working hours, on a
full-time basis to his duties under this Agreement; (ii) comply in all respects
with the lawful and reasonable directions and instructions given to him by
the
Board and the COO; and (iii) use his best efforts to promote and serve the
interests of the Corporation.
Section
2. Term.
The
Employee's employment shall commence on the Effective Date and shall continue
on
an at-will basis until terminated with or without cause by either the
Corporation or the Employee.
Section
3. Compensation
and Other Benefits.
The
Corporation shall pay and provide the following compensation and other benefits
to the Employee as compensation for services rendered under this
Agreement:
(a) Annual
Salary.
The
Corporation shall pay to the Employee, in accordance with the then prevailing
payroll practices of the Corporation, a monthly base salary of Thirty Thousand
Dollars ($30,000) per month (the "Monthly
Base Salary"),
less
applicable payroll deductions, payable
on a monthly basis on or before the 1st day of each month (or as otherwise
agreed to by the Employee and the Corporation).
(b) Commissions.
In
addition to the Monthly Base Salary, the Corporation shall pay commissions
to
Employee as mutually agreed upon from time to time by the Employee and the
Corporation.
(c) Paid
Time Off.
The
Employee shall be entitled to a
minimum
of four (4) weeks of paid time off per year in accordance with the paid time
off
policies as may be established by
the
Corporation
from
time to time. The Employee shall accrue and receive full compensation and
benefits during his paid time off periods.
Section
4. Other
Compensation.
The
Employee shall be and remain eligible to participate in, in accordance with
their respective terms and conditions, all benefit plans or benefit plan
equivalents which
are
made
available from
time
to time by
the
Corporation to employees
having responsibilities similar to those of the Employee.
Section
5. Expenses.
The
Corporation shall reimburse the Employee for all reasonable business expenses
incurred by the Employee in connection with the conduct of the Corporation’s
business in accordance with the Corporation’s expense reimbursement policies as
disclosed to Employee in advance of the effectiveness of such
policies.
Section
6. Termination
of Employment.
The
Corporation or the Employee may, at any time and for any reason, terminate
the
employment of the Employee upon prior written notice to the other party. The
effective date stated in such notice of termination shall be the "Termination
Date."
(a) Termination
for Cause.
(i) If
the
Corporation terminates the Employee's employment for Cause (as defined below),
or the Employee resigns without Good Reason (as defined below), the Employee
shall be entitled to (i) payment of that portion of the Employee's Annual Salary
under Section 3(a)
earned
through and including the Termination Date at the rate of Annual Salary in
effect on the Termination Date plus (ii) any declared but unpaid, bonuses,
that
the Employee earned through and including the Termination Date. The Employee
shall not be eligible to receive any portion of the Annual Salary, any bonuses
which would have otherwise been awarded for the year in which the Termination
Date falls or compensation for the benefits described in Section
3
with
respect to any future periods beginning on the Termination Date.
-2-
(ii) Termination
for "Cause" shall mean termination of the Employee's employment with the
Corporation for any of the following reasons:
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(1)
|
Any
act of theft, fraud, embezzlement, dishonesty or other similar behavior
by
the Employee or any act resulting in a felony conviction or plea
of nolo
contendere of the Employee (other than non-material or insignificant
convictions or indictments, such as traffic
violations);
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(2)
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Any
gross neglect of duty, incompetence, willful insubordination or willful
misconduct of the Employee in discharging any of his duties and
responsibilities hereunder;
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(3)
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Any
occurrence of the Employee reporting to work under the influence
of
alcohol or illegal drugs, or the Employee being under the influence
of
alcohol or illegal drugs during working
hours;
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(4)
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Any
intentional and material failure or refusal by the Employee to comply
with
the policies, rules, and regulations of the Corporation, whether
now in
force or hereafter adopted; or
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(5)
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Any
intentional and material breach by the Employee of this
Agreement.
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The
Corporation may immediately terminate the Employee's employment with the
Corporation for Cause as set forth in subclause (1) above and may terminate
the
Employee’s employment with the Corporation for Cause as set forth in subclauses
(2) through (5) above by giving written notice identifying the reasons for
termination and providing (a) in the case of a termination for Cause arising
out
of events described in clauses (1) through (5) above, a fifteen (15) day period,
or (b) in the case of a termination for Cause arising out of events described
in
clause (6) above, a thirty (30) day period, in each case for Employee to cure
prior to the Termination Date.
(iii) "Good
Reason" shall mean resignation from Employee's employment with the Corporation
for any of the following reasons (each of the following without Employee's
consent):
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(1)
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Any
intentional and material breach by the Corporation of this
Agreement;
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(2)
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Any
material alteration or reduction of Employee's authority, responsibility
or duties unless such material alteration or reduction by the Corporation
is in response to conduct and behavior by Employee that would justify
termination of Employee for "Cause" as defined above; or
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(3)
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Any
requirement by the Corporation that Employee participate in any unlawful
act.
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| (4) |
Any
requirement that the Employee relocate to any location other than
the
three (3) dealerships currently operated by the Corporation in
Indianapolis, Terre Haute, Fort Xxxxx and Dallas,
Texas.
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If
the
Corporation terminates the Employee's employment without Cause or the Employee
terminates his employment with Good Reason, the Employee shall be entitled
to
(i) payment of that portion of the Employee's Annual Salary under Section 3(a)
earned
through and including the Termination Date at the rate of Annual Salary in
effect on the Termination Date plus (ii) payment of that portion of the
Employee's Annual Salary under Section 3(a)
for the
period commencing the day after the Termination Date through and including
the
180th day
following the Termination Date at the rate of Annual Salary in effect on the
Termination Date (the "Severance
Payment"),
plus
(iii) any declared but unpaid bonuses that the Employee earned through and
including the Termination Date.
Section
7. Non-Competition.
The
Employee acknowledges and agrees that he is subject to a covenant not to compete
with the Corporation as more particularly described in Section
8.6
of the
Stock Purchase Agreement. As provided in the Stock Purchase Agreement, if the
Employee's employment is terminated without Cause or the Employee resigns for
Good Reason, and the Corporation does not make the Severance Payment, the
Non-Competition Period (as defined in the Stock Purchase Agreement) shall expire
on the Termination Date.
Section
8. Nonassignability,
Binding Agreement.
(a) By
the
Employee.
The
Employee shall not assign or delegate this Agreement or any right, duty,
obligation, or interest under this Agreement without the Corporation's prior
written consent; provided,
however,
that
nothing shall preclude the Employee from designating beneficiaries to receive
benefits payable under this Agreement upon his death, and nothing shall preclude
the Employee's executors, administrators, or their legal representatives, from
assigning any rights under this Agreement to any person.
(b) By
the
Corporation.
The
Corporation may assign, delegate, or transfer this Agreement and all of the
Corporation's rights and obligations under this Agreement to any of its
subsidiaries
or to any business entity that by merger, consolidation, or otherwise acquires
all or substantially all of the assets of the Corporation or any subsidiary
or to which the Corporation or any
subsidiary transfers all or substantially all of its assets. Upon assignment,
delegation, or transfer, the transferee shall be deemed to be substituted for
the Corporation for all purposes of this Agreement.
(c) Binding
Effect.
Except
as limited under Sections
8(a),
and
(b),
this
Agreement shall be binding upon and inure to the benefit of the parties, any
successors to or assigns of the Corporation, and the Employee's heirs and the
personal representatives or executor of the Employee's estate.
Section
9. Severability.
If a
court of competent jurisdiction makes a final determination that any term or
provision of this Agreement is invalid or unenforceable, and all rights to
appeal the determination have been exhausted or the period of time during which
any appeal of the determination may be perfected has been exhausted, the
remaining terms and provisions shall be unimpaired and the invalid or
unenforceable term or provision shall be deemed replaced by a term or provision
that is valid and enforceable and that most closely approximates the intention
of the parties with respect to the invalid or unenforceable term or provision,
as evidenced by the remaining valid and enforceable terms and conditions of
this
Agreement.
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Section
10. Amendment.
This
Agreement may not be modified, amended, or waived in any manner except by an
instrument in writing signed by both parties to this Agreement.
Section
11. Waiver.
The
waiver by either party of compliance by the other party with any provision
of
this Agreement shall not operate or be construed as a waiver of any other
provision of this Agreement (whether or not similar), or a continuing waiver
or
a waiver of any subsequent breach by a party of a provision of this Agreement.
Performance by either of the parties of any act not required of it under the
terms and conditions of this Agreement shall not constitute a waiver of the
limitations on its obligations under this Agreement, and no performance shall
stop that party from asserting those limitations as to any further or future
performance of its obligations. The Employee acknowledges that each breach
of
this Agreement or any similar agreement entered into between the Corporation
and/or any of its affiliates or subsidiaries and a third party is unique.
Therefore, the failure of the Corporation and/or any of its affiliates or
subsidiaries to enforce the same, similar or different restriction in a similar
agreement or to seek a different remedy or any other act or omission by the
Corporation and/or its affiliates or subsidiaries shall not be construed as
a
waiver or estoppel to the enforcement of this Agreement against the
Employee.
Section
12. Governing
Law.
The
laws of the State of Indiana shall govern the validity, performance,
enforcement, interpretation, and any other aspect of this Agreement,
notwithstanding any state's choice of law provision to the contrary.
Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought solely in the federal and state
courts in Indiana, and each of the parties consent to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein.
Section
13. Notices.
All
notices required or desired to be given under this Agreement shall be in writing
and shall be deemed to have been given if delivered (i) in person and receipted
for by the party to whom the notice is directed; (ii) mailed by certified or
registered United States mail postage prepaid, not later than the day upon
which
the notice is required to be given pursuant to this Agreement; or (iii)
delivered by expedited courier, shipping prepaid or mailed to sender, on the
next business day, after the date on which it is so sent, and addressed as
follows:
If
to the
Corporation, to:
Manchester
Indiana Acceptance, Inc.
c/o
Manchester Inc.
000
Xxxxxxxx Xxxxx, 0xx
Xxxxx
Xxxxxx,
Xxxxx, 00000
Attention:
Xxxxxxx Xxxxxx
Telecopy
Number: (000) 000-0000
-5-
With
a
copy to:
Wuersch
& Xxxxxx LLP
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Telecopy
Number: (000) 000-0000
If
to the
Employee:
Xxxx
X.
Xxxxxxx
00000
Xxxxxx Xxx
XxXxxxxxxxxx,
Xxxxxxx 00000
Either
party may, by giving written notice to the other party, change the address
to
which notice shall then be sent.
Section
14. Prior
Agreements.
This
Agreement, including all agreements referenced in this Agreement, is a complete
and total integration of the understanding of the parties. This Agreement
supersedes all prior or contemporaneous negotiations, commitments, agreements,
writings, and discussions with respect to the subject matter of this Agreement,
and all prior negotiations, commitments, agreements, writings, and discussions
will have no force or effect. The parties to any other negotiation, commitment,
agreement, writing, or discussion will have no further rights or obligations
thereunder to the extent it relates to the subject matter of this
Agreement.
Section
15. Headings.
The
headings of the sections of this Agreement are inserted for convenience only
and
shall not be deemed to constitute part of this Agreement or to affect the
construction of this Agreement.
Section
16. Counterparts.
This
Agreement may be executed in two (2) or more counterparts, each of which for
all
purposes shall be deemed to be an original but all of which together shall
constitute one and the same Agreement. Only one (1) counterpart signed by the
party, against which enforceability is sought needs to be produced to evidence
the existence of this Agreement. Facsimile transmission of the executed version
of this Agreement or any counterpart thereof shall have the same force and
effect as the original.
Section
17. Joint
Drafting.
This
Agreement shall be deemed to have been drafted jointly by the parties, and
in
the event of an ambiguity in this Agreement, the same shall not be construed
against either party.
[SIGNATURE
PAGES TO FOLLOW]
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IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first written
above.
| "CORPORATION" | ||
| Manchester Indiana Operations, Inc. | ||
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| By: | ||
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Name: Xxxxxxx X. Xxxxxx |
||
| Title: President | ||
| "EMPLOYEE" | ||
| |
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| By: | ||
|
Xxxx X. Xxxxxxx |
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