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EXHIBIT 10.180
COMPENSATION AGREEMENT
THIS COMPENSATION AGREEMENT ("Agreement") is entered into by and between
S. Xxxx Xxxxxxxx, an individual residing at 0000 Xxx Xxx Xxxxx, Xxx Xxxxx,
Xxxxxx 00000, and 00000 000xx Xxxxxx, Xxxx, Xxxxxxxxxx 00000 ("Xxxxxxxx") and
Preferred Equities Corporation, a Nevada corporation with its principal address
being 0000 Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000 ("PEC").
RECITAL
Xxxxxxxx currently is employed as the Senior Vice President ("SVP") of
PEC's Marketing and Sales Division. In his role as SVP, Xxxxxxxx is responsible
for the supervision of all of the marketing and sales of PEC's timeshare and
land products. Xxxxxxxx reports to the Chairman of the Board and Chief Executive
Officer of PEC, Xxxxxx X. Xxxxx. Xxxxxxxx and PEC desire to enter into this
Agreement in order to reduce to writing Xxxxxxxx'x compensation arrangement with
PEC for such period of time as Xxxxxxxx is employed by PEC as SVP or until
modified by mutual agreement of the parties. In consideration of the foregoing,
the parties hereto agree as follows.
1. EMPLOYEE AT WILL. Xxxxxxxx recognizes and acknowledges that he is an
employee-at-will. PEC may terminate Xxxxxxxx at any time with or without Cause
as that term is hereinafter defined.
2. BASE SALARY. Xxxxxxxx shall be paid a base salary of one hundred twenty five
thousand dollars ($125,000.00) per annum payable bi-weekly as part of the
regular PEC payroll. Base salary payments shall be subject to ordinary
withholding for taxes and withholding for items designated by Xxxxxxxx such as
for 401(k) contributions.
3. SALES COMMISSIONS. In addition to his base salary Xxxxxxxx shall be paid a
sales commission of two tenths of one percent (0.2%) of Net Sales, as
hereinafter defined, occurring on and after June 12, 1998 and during the period
of Xxxxxxxx'x employment by PEC as SVP.
(a) "Net Sales" shall mean the Net Contract Amount, as hereinafter
defined, of all installment sales contracts, excluding sales contracts relating
to R.V. timeshare interests, ("Contracts"), entered into between PEC (and its
subsidiaries) and individual purchasers, in the ordinary course of business,
during the period or periods being calculated, relating to sales of lots,
parcels and timeshare interests, minus the aggregate sum of the following:
(1) The Net Contract Amount of such Contracts which are
rescinded by purchasers; and
(2) The Net Contract Amount of any Contract entered into after
June 12, 1998 which is canceled for any reason by PEC (or its subsidiaries)
during the period or periods being calculated, provided the obligor of such
Contract shall not have made a minimum of six regular
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monthly payments; and, in the case of the calculation of the final payment
following termination of Xxxxxxxx'x employment, any Contract that is canceled
within six months following such termination, provided such Contract shall not
have made a minimum of six regular monthly payments.
(b) The "Net Contract Amount" of any Contract shall mean the gross
contract price of such Contract minus:
(1) Any credits or discounts; and
(2) The balance of any note or contract canceled by PEC (or its
subsidiaries) in connection with such Contract in any upgrade, downgrade or
exchange transaction.
(c) Xxxxxxxx'x commission schedule shall be prepared quarterly by PEC's
Finance Department. Payment of sales commissions shall be made to Xxxxxxxx
pursuant to Section 4. of this Agreement.
4. ADVANCE AGAINST SALES COMMISSIONS.
(a) Xxxxxxxx shall be paid a biweekly advance of $2,885.00 against the
sales commissions described in Section 3. of this Agreement.
(b) As soon as practicable at the end of each quarter Xxxxxxxx will be
paid the amount by which the sales commission calculation exceeds the advance
against sales commission paid in each said quarter.
(c) All payments made pursuant to Section 4. (a) and (b) above shall be
subject to normal withholding.
5. PROFIT CONTRIBUTION BONUS. In addition to his Base Salary and Sales
Commissions due under this Agreement, Xxxxxxxx shall be paid a bonus (the
"Profit Contribution Bonus") for his success in reducing sales and marketing
costs for fiscal year 1999 ("Fiscal 1999"), ending on August 31, 1999 and for
the last quarter of fiscal year 1998 ("Fiscal 1998"), ending on August 31, 1998,
as follows:
(a) Provided that (i) Net Sales for Fiscal 1999 exceed the Net Sales for
Fiscal 1998, and (ii) the percentage of Net Sales represented by the Total
Selling Expenses (the "SE Percentage") for Fiscal 1999 is less than the SE
Percentage for Fiscal 1998, all as shown on the Selling Expense Recap report
prepared monthly by the PEC Finance Department (the "SE Report"), Xxxxxxxx shall
receive a Profit Contribution Bonus in an amount equal to two and one-half
percent (2.5%) of the product of (x) a percentage equal to the SE Percentage for
Fiscal 1999 subtracted from the SE Percentage for Fiscal 1998, multiplied by (y)
the Net Sales for Fiscal 1999, which Profit Contribution Bonus, less any
advances made thereon in accordance with the following subparagraphs (1), (2)
and (3), shall be paid as soon after the end of Fiscal 1999 as
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practicable;
(1) Xxxxxxxx shall receive an advance against such annual Profit
Contribution Bonus for the first fiscal quarter of Fiscal 1999, provided that
(i) Net Sales for such fiscal quarter exceed the Net Sales for the first fiscal
quarter of Fiscal 1998, and (ii) the SE Percentage for such fiscal quarter is
less than the SE Percentage for the first fiscal quarter of Fiscal 1998, as
shown on the SE Report. The amount of such advance shall be equal to one and
one-quarter per cent (1.25%) of the product of (x) a percentage equal to the SE
Percentage for such fiscal quarter subtracted from the SE Percentage for the
first quarter of Fiscal 1998, multiplied by (y) the Net Sales for Fiscal 1999's
first quarter, which advance shall be paid as soon after the end of such fiscal
quarter as practicable.
(2) Xxxxxxxx shall receive an advance against such annual Profit
Contribution Bonus for the second fiscal quarter of Fiscal 1999, provided that
(i) the aggregate Net Sales for the first two fiscal quarters of Fiscal 1999
exceed the aggregate Net Sales for the first two fiscal quarters of Fiscal 1998,
and (ii) the combined SE Percentage for such two fiscal quarters is less than
the combined SE Percentage for the same two fiscal quarters of Fiscal 1998, as
shown on the SE Report. The amount of such advance shall be equal to one and
one-quarter per cent (1.25%) of the product of (x) a percentage equal to the
combined SE Percentage for such two fiscal quarters subtracted from the combined
SE Percentage for the same two quarters of Fiscal 1998, multiplied by (y) the
aggregate Net Sales for Fiscal 1999's first two fiscal quarters, which amount,
less any advances made thereon for the first fiscal quarter of Fiscal 1999,
shall be paid as soon after the end of such second fiscal quarter as
practicable.
(3) Xxxxxxxx shall receive an advance against such annual Profit
Contribution Bonus for the third fiscal quarter of Fiscal 1999, provided that
(i) the aggregate Net Sales for the first three fiscal quarters of Fiscal 1999
exceed the aggregate Net Sales for the first three fiscal quarters of Fiscal
1998, and (ii) the combined SE Percentage for such three fiscal quarters is less
than the combined SE Percentage for the same three fiscal quarters of Fiscal
1998, as shown on the SE Report. The amount of such advance shall be equal to
one and one-quarter per cent (1.25%) of the product of (x) a percentage equal to
the combined SE Percentage for such three fiscal quarters subtracted from the
combined SE Percentage for the same three quarters of Fiscal 1998, multiplied by
(y) the aggregate Net Sales for Fiscal 1999's first three quarters, which
amount, less any advances made thereon for the first two fiscal quarters of
Fiscal 1999, shall be paid as soon after the end of such third fiscal quarter as
practicable.
(b) Provided that (i) Net Sales for the last fiscal quarter of Fiscal
1998 exceed the Net Sales for the last fiscal quarter of Fiscal year 1997
("Fiscal 1997"), and (ii) the SE Percentage for the last fiscal quarter of
Fiscal 1998 is less than the SE Percentage for the last fiscal quarter of Fiscal
1997, both as shown on the SE Report, Xxxxxxxx shall receive a Profit
Contribution Bonus for such fiscal quarter calculated in the same manner as set
forth above for Fiscal 1999, but relating only to the Net Sales during such
fiscal quarter, which, Profit Contribution Bonus shall be paid as soon after the
end of such fiscal quarter as practicable.
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(c) In the event, during Fiscal 1999, Xxxxxxxx'x employment is
terminated by PEC other than for Cause, as hereinafter defined, or in the event
of Xxxxxxxx'x death or permanent disability, Xxxxxxxx or his personal
representative shall be entitled to the portion of his Profit Contribution Bonus
for the part of Fiscal 1999 earned through the immediately preceding fiscal
quarter prior to such termination, death or permanent disability, calculated in
accordance with, and subject to, the above terms and conditions, at the 2-1/2%
rate set forth above, less any prior quarterly advances.
6. EXECUTIVE BONUS POOL. Xxxxxxxx shall be eligible to participate in the
Executive Incentive Compensation Plan of Mego Financial Corp. at the discretion
of the Board of Directors of Mego Financial Corp.
7. AUTOMOBILE ALLOWANCE. Xxxxxxxx shall receive a monthly automobile allowance
in the amount of seven hundred fifty dollars ($750.00).
8. STOCK OPTIONS. Xxxxxxxx shall receive stock options under the Stock Option
Plan of PEC's parent, Mego Financial Corp., at the discretion of the Board of
Directors of Mego Financial Corp.
9. TRAVEL AND BUSINESS EXPENSE. Xxxxxxxx shall be reimbursed for usual business
and travel expenses. Xxxxxxxx shall be entitled to fly first class on any flight
or combination of flights longer than two hours in scheduled duration.
10. BENEFITS. Xxxxxxxx shall be eligible for all benefits afforded to PEC
executives from time to time provided Xxxxxxxx meets any eligibility
requirements set forth for employees participating therein.
11. VACATION. Xxxxxxxx shall have three (3) weeks paid vacation during each PEC
fiscal year.
12. SEVERANCE.
(a) If Xxxxxxxx'x employment is terminated by PEC for any reason other
than for Cause, Xxxxxxxx shall receive base salary and sales commissions as set
forth in Sections 2. and 3. to the date of termination, the portion of his
Profit Contribution Bonus set forth in Section 5.(c), and if such termination
occurs after May 31, 1999, a severance payment in an amount equal to his then
current annual base salary. If Xxxxxxxx resigns or terminates his employment by
PEC (except as set forth in subparagraph (b) hereto) he will only be entitled to
his base salary and sales commissions through the date of such termination.
(b) It is contemplated by the parties that if Xxxxxxxx is still employed
by PEC after the end of Fiscal 1999, a new arrangement relating to profitability
to take the place of the Profit Contribution Bonus set forth in Section 5. of
this Agreement will be agreed upon by the parties and added to this Agreement by
amendment. Provided that (i) the parties have not executed such
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an amendment to this Agreement by November 30, 1999, and (ii) Xxxxxxxx has met
the conditions of Section 5. of this Agreement and is entitled to receive, or
has received, a Profit Contribution Bonus for Fiscal 1999, should Xxxxxxxx elect
to resign or terminate his employment by PEC during the thirty (30) day period
following November 30, 1999, he shall be entitled to a severance payment in an
amount equal to his then current annual base salary, in addition to his base
salary and sales commissions through the date of such termination.
13. DEFINITION OF CAUSE. "Cause" shall mean any one of the following acts of, or
omissions by, or actions of others relating to, Xxxxxxxx:
(a) Conviction of a felony, whether or not such conviction is appealed.
(b) Deliberate and premeditated acts against the best interests of PEC.
(c) Xxxxxxxx is found guilty of or is enjoined from violation of any
state or federal security laws, state or federal laws governing the business of
PEC, or rules or regulations of any state or federal agency regulating any of
the business of PEC.
(d) Misappropriation of PEC funds or property.
(e) Habitual use of alcohol or drugs to a degree that such use
interferes in any way with Xxxxxxxx'x performance of his duties.
13. COVENANT NOT TO SOLICIT. Xxxxxxxx agrees that so long as he is employed by
PEC and for a period of one year after termination of his employment by PEC with
or without Cause, or resignation or termination of his employment by Xxxxxxxx,
Xxxxxxxx will not solicit or encourage other employees or officers of PEC to
terminate their employment by PEC for any purpose whatsoever.
14. MISCELLANEOUS.
(a) This Agreement is personal to Xxxxxxxx and the duties and
responsibilities hereunder may not be assigned by Xxxxxxxx.
(b) This Agreement shall terminate except, to the extent applicable, for
the provisions of Sections 3., 5.(c), 12. and 14. hereof, on the date of
termination of Xxxxxxxx'x employment by PEC, or Xxxxxxxx'x resignation, his
termination of employment, death or permanent disability.
(c) This Agreement may only be modified by mutual written agreement of
the parties.
(d) The headings to this Agreement are for convenience of reference only
and are not to be considered in the interpretation of this Agreement.
(e) This Agreement shall be governed by the laws of the state of Nevada.
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Entered into in Las Vegas, Nevada, on July 27, 1998.
Preferred Equities Corporation
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Xxxxxxxxx X. Xxxxx S. Xxxx Xxxxxxxx
President
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